The export of readymade garments witnessed a decline of a staggering 47 percent in the month of March as compared to the same period of previous year.

According to data released by the Garment Association of Nepal (GAN), readymade garments worth US$ 2.89 million were exported to US, the largest market of Nepali readymade garments, in March 2007.

The Nepali readymade garments export is on a free fall following termination of the quota system owing to a WTO provision since January, 2005.

Nepal Readymade Garments Industry Association informed that this January alone witnessed a 54 percent decline in export. Similarly, February saw a 64 percent decline.

GAN officials attributed the decline to quickening loss of orders in recent months mainly due to internal problems related to labor and also due to eroding price competitiveness.

Entrepreneurs said most of the manufacturing units remained closed during the period due to labor problems, and those who managed to overcome the problem also had received meager orders to operate.

The export during the first three months of 2007 plunged by a whopping 55 percent to US$ 7.82 million. In the same period of 2006, the export had totaled US$ 17.56 million.

GAN officials said that the lack of government support on issues such as labor stir, bank draft and favorable industrial policy has also impacted the industry adversely.

Even though the government has long committed to developing a garment processing zone in order to develop a composite garment manufacturing site with all ancillary industries and logistics services, that has not been implemented so far.