KATHMANDU, Aug. 30 (Xinhua): The proposed Indo- Bangladesh textile pact that will grant duty-free entry of Bangladeshi garment products into the lucrative Indian market, has posed a new challenge to the Nepali garment industry, which has been rapidly expanding its market in India in the recent period.
According to a leading website, eKantipur.com Thursday's report, as per the deal, which the Bangladeshi government recently approved, India will annually import eight million pieces of ready-made garments free of customs duty.
"Once the deal is sealed, Bangladesh will enjoy facilities almost similar to the one Nepali products have been enjoying. This might put the Nepali manufacturers, who have a lower competitive edge over the Bangladeshis, in a difficult position in the fast growing Indian market," said Kiran Saakha, president of Garment Association of Nepal.
So far, Nepali manufacturers have been exporting their products to India under a duty-free market access facility provisioned by a bilateral trade treaty. Similar Bangladeshi exports to India, on the other hand, are subjected to customs and other duties, which totals to about 24 per cent.
"The agreement will reduce the advantage that Nepali manufacturers are enjoying at present," said Saakha, adding that domestic producers will have to be more competitive in order to sustain business in the southern market.
Worriedness of the Nepali manufacturers is founded on the fact that Bangladesh is the larger producer, enjoys far more competitive edge than Nepal and has been a leading competitor that siphoned away its major orders from the US and European importers after the quota system phased out in the global apparels trading.
Besides, India has been a new market for Nepali ready-made garment industry, which was a US-focused industry. Entrepreneurs had diversified exports to India only after rise in global competition and other factors that caused them to lose a substantial market in the United States.
Statistics of Nepal Rastra Bank, central bank of the country, shows that the country's ready-made garment export to India had jumped over two-fold to more than 1.20 billion Nepali rupees (some 18.4 million U.S. dollars in the fiscal year of 2005/06. Although a 4.0 per cent countervailing duty slowed the exports in the past one year, its export for the first 11 months of 2006/07 fiscal year ended in mid-July stood at about 700 million rupees (some 10.7 million dollars).
Indo-Bangladesh pact to affect Nepali garments
FE Team | Published: August 31, 2007 00:00:00 | Updated: February 01, 2018 00:00:00
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