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NEPAL: Garment industry faces difficult adjustment problems

KATHMANDU: Since the abolition of MFA quotas in the global textiles and clothing trade, beginning this year, Nepalese garment sector is in despair; Garment Association of Nepal reported here on March 20.

The impact of end of MFA regime looks more pronounced in the case of Nepal as has already been marginalized its position by the drastic change in the competitive environment for the trade in this sector.

The quasi-guaranteed market access as enjoyed by Nepalese apparels, particularly in the American market, has gone with a complete phase out of quotas.

The loss of protected market has prompted garment manufacturers to stop their production en masse, bringing down the number of operating industries to less than twenty from over 100 just a year before.

Nepal is the only country in the region whose export to the United States has nose-dived: minus 50 percent in the first two months of 2005, compared to the same period last year.

In contrary, Bangladesh, Cambodia and Sri Lanka - the countries without textile base like Nepal – saw their exports increased, ranging from 10-20% each, despite they were also cited likely victims of the quota free trade.

Source: Agencies • News Courtesy: BharatTextile.com