Nepal to lobby for duty free access for RMG in US

Nepal would lobby the US government to gain duty-free, quota-free access to the American market for all types of readymade garments, Nepali Prime Minister KP Sharma Oli has said. He also urged garment makers to expand their production capacity to ensure regular supplies to one of the main export destinations.

Oli's comment during his address at the 65th annual general meeting of the Nepal Chamber of Commerce (NCC). The Prime Minister said manufacturers should focus on improving their production capacity.

After US President Barack Obama signed legislation authorising special trade preferences for Nepal on February 24, Nepali garment exporters have been able to utilise duty-free tariff benefits for up to 66 types of garment items like carpets, headgear, shawls, scarves and travel goods.

However, garment producers were disappointed after finding out that they do not currently manufacture the products in the duty-free list. The duty-free facility which lasts until 2025 is applicable to only 40 per cent of the Nepali garments being exported to the US.

There were over 400 apparel factories across the country that provided employment to 450,000 individuals when garment export was at its peak in 2001. Investment in this sector reportedly exceeded Rs six billion at that time.

Nepal's garment industry went into a nosedive after the Multi Fibre Agreement (MFA) with the US was phased out in 2005. Till that time, about 90 per cent of readymade garments produced in Nepal, amounting to about Rs 10 billion, were exported to the US. Readymade garments then had 20 per cent share in total export. Its ranking slipped to fifth position in overall exports of 2014-15, amounting to Rs 5.29 billion.