Garment processing zone planned in Bara district

Kathmandu: A garment processing zone (GPZ) that will be a part of the Export Promotion Zone (EPZ) is to be established in Simra of Bara district for the promotion of Nepali readymade garments (RMG).

Talking about EPZ, Garment Association Nepal (GAN) first vice-president Uday Raj Pandey said the GPZ being a part of it would soon be established at Birgunj Sugar Factory in Simara and the decision regarding the land meant for it had been taken by the Ministry of Industries.

Pandey said everything, from the plant layout to the boundary wall, was ready but the Constituent Assembly (CA) needs to formulate the rules and regulations for the EPZ. The bill regarding EPZ is hanging fire in the CA. He added that if the bill was passed GPZ could be started at Simara and that the cost factor would be minimised.

The export of Nepali RMG to the US in August saw a slight rise by 14 per cent over that in July where it witnessed a whopping drop of 76 per cent. Nepali RMG worth $692,883.27 was exported to the US in August. In July, the export volume was worth $519,524.84.

Nepali RMG exports to the US kept fluctuating the whole past fiscal year, said Pandey adding that the visit of GAN representatives to the USA was very fruitful and the US government had also expressed interest while pointing out that there was no lobbying by GAN for Nepali RMG. Pandey said the US governmet had promised to forward the bill regarding making Nepali RMG duty free.

Pandey said decisions were required on the issue of India’s high duty charge on Nepali RMG. He said that GAN was hopeful regarding the proposed visit of Prime Minister Pushpa Kamal Dahal ‘Prachanda’ to New Delhi. “We are optimistic that the PM’s visit to India will bring us excellent news related to counter value duty, which according to the Trade and Transit Treaty should not be charged on Nepali RMG. Yet it is being charged and this is raising the price of Nepali RMG in the market,” he said.

Recent data provided by the Trade and Export Promotion Centre shows Nepali RMG export has decreased by 28.1 per cent and the market has got limited to Rs 283 million. Talking about the decline in the export volume of Nepali RMG, Pandey said, “Tireless lobbying is needed to help Nepali RMG get duty free access to the market.”

Pandey said that American scenario was staddled with election fever and GAN would have to wait until January when the new US government is formed.
“It’s not easy to go the US frequently and I think that the government must appoint someone at the Nepali embassy there to do the lobbying for Nepali RMG. If this is done, hopefully Nepali RMG will become duty free by 2009,” he said.

The US alone absorbs 80 per cent of the Nepali RMG. In 2004, RMG export suffered a loss of 30 per cent. In 2005, losses were 41 per cent, in 2006 six per cent and in 2007 losses were 48 per cent.