It may be too early to gauge Nepal’s potential as a sourcing destination for Indian apparel exporters in its totality, but it should come as no surprise that some Indian companies have already started exploring this market, looking for prospects here.
Taking a closer look at the recent developments in Nepal, which currently exports garments worth US$50 million, would reveal several changes that goes in the favour of traders looking for business with this Himalayan country.
The Nepal Government is planning to develop a Garment Processing Zone (GPZ) within the Simara SEZ of Bara district, aiming to lure foreign direct investment. The US House of Representatives recently passed a Bill, allowing duty-free access to Nepalese readymade garments until 2025. Moreover, the country’s Ministry of Commerce is also pushing all agencies to work collectively for the promotion of exports, and for the setting up of an ‘export promotion cell’ to better streamline export activities in the county as well as deal with supply constraints.
Meanwhile, a few Indian companies are also exploring Nepal, looking at it as a low-cost manufacturing destination.
Ludhiana-based Aadit Apparel is one of such company, whose Director Prabhat Gupta told Apparel Resources, “We had meetings with Nepal-based garment manufacturers, and discussions are underway. In the coming months, we expect to start a joint venture with them.”
Apart from Aadit Apparel, Apparel Resources are in the know of two more Indian companies being in talks with their Nepalese counterparts. However, they have refused to be named, given that their plans are still at a very early stage.
Speaking on what attracted Prabhat Gupta towards Nepal, he says, “Being from Bihar, very close from the Nepal border, we are familiar with the country as well as the industry there. Political stability is also an important aspect here. Also, garments made in Nepal is almost 20 per cent cheaper those made in India. Overheads are much less there; labour is easily available there, with plenty of workers from Bihar migrating to Nepal to find work.
“Import of fabric from China is also comparatively easy in Nepal. Compared to Ludhiana or even Bihar, Nepal seems to be a good option,” he adds, while expressing his firm belief that Nepal will be an important sourcing destination in the future.
With a capacity of 1 lakh pieces a month, his company basically deals with menswear. It caters mainly to the US and South Africa, as well as domestic brands too.
