Nepal’s garment exports could exceed one billion US dollar, resulting in the direct employment of 100,000 people even if the industry can tap 0.05 per cent of the potential 200 billion dollar US market, according to a recent study.

Nepal’s ministry of industry, in collaboration with the UK Aid funded Samarth, had commissioned an assessment on country’s garment industry after the introduction of duty-free, quota-free access to some 66 items to the market in the US, which was the largest market for Nepal’s garment industry in the past.

A firm based in Bangladesh, which has carried out similar studies in Bangladesh and Ethiopia, was assigned to assess the current situation and competitive scenario of Nepal’s garment industry through discussions with all relevant stakeholders in the garment industry.

A comparative study with Bangladesh (an established market) and Ethiopia (an emerging market) showed that Nepal had a much higher minimum wage and transport lead time, and the government policies were much more export-friendly in those countries compared to Nepal.

“However, the findings pointed out that Nepal can compete in the global market by diversifying away from USA and producing small quantities of customised and specialised products with higher profit margins to cover higher costs.”