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KATHMANDU: Following Washington’s decision to allow duty free import of readymade garments from Nepal, Prime Minister KP Sharma Oli has urged entrepreneurs to increase the production of such textiles.
The Prime Minister who met representatives of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI), the Confederation of Nepalese Industries (CNI) and the Nepal Chambers of Commerce (NCC), also welcomed the American decision to eliminate duty on Nepalese clothes.
Nepal has been enjoying zero-tariff facility from many other developed countries like Canada, Australia, Japan, Turkey and the European Union, but it has not been able to capitalise on the facility extended by those countries except the EU because of a larger volume of orders.
Nepal is also hamstrung by the high cost of production and transportation to seriously challenge major apparel exporters like Bangladesh and Cambodia. Which is why the duty-free access to the US market could turn out to be a level playing field for apparel entrepreneurs of Nepal because it is the only LDC (except African countries under AGOA) to receive this facility.
Apparels produced in landlocked Nepal are relatively more expensive than those manufactured in Bangladesh and Cambodia because of higher transportation cost.
The US currently levies about 17 per cent tariff on apparels, and the duty-free facility will extend an opportunity to Nepal compete with products of other exporting countries.
When the duty-free facility extended by the US comes into effect, Nepali apparels will be cheaper than apparels from other LDCs.
That could be the boost the Nepal’s tottering readymade garment sector needs to revive itself and make its mark. (SH)
