Nepal’s readymade garment sector has shown a sharp increase in exports as peace and political stability have convinced foreign buyers to return. Demand from abroad has instilled confidence in garment entrepreneurs. The country’s readymade garment sector is one of the largest export sectors in terms of foreign exchange earnings. It provides significant employment opportunities but was almost on the verge of collapse. That has changed in recent months.
Readymade garment exports from Nepal have increased by 52.8 per cent in the first eight months of the financial year. Yarn exports, especially cotton, polyester and other yarns for the eight month period, improved by 6.1 per cent and fabric exports increased by 5.9 per cent. Woolen and pashmina shawls exports increased by only 0.6 per cent.The major countries Nepal exports garments to US, Canada, Europe, Australia and India. Within Europe, the key garment importing countries are Germany, France, Netherlands, UK, Spain and Switzerland.
The US was the main buyer of Nepali garment products until 2005. But after the end of quota system, Nepali garment products lost their competitive edge, eventually losing the US market. Although India was emerging as the next growth market for Nepali garments, the countervailing duty imposed on the product by India resulted in a drop in garment exports to India.
Europe has now emerged as the major market for Nepali garments.
