The government has also provided a percentage discount to the apparel manufacturing industry. However, the government’s minor quantity discount for the huge garment business has not made things any simpler.
Nepal was self-sufficient in textile production about thirty years ago. Across the country, there were between 1,200 to 1,500 garment industries. These industries provided both employment and economic revenue.
While some countries in the world market had a quota for exporting ready-made garments to the world market, Nepal had no quota at the time. In the past, ready-made garment production and export (garment industry) provided a good potential for economic growth in Nepal.
However, as a result of recent political changes in the country, the country’s industry, company, and manufacturing have progressively begun to decrease.
Manufacturing and processing industries, in particular, began to decline. Shakti Golyan, the director of Golyan Group, voiced his opinion in his own words during a conversation with Makalu Khabar.
“There are currently 15 to 20 garment industries operating in Nepal.” According to my experience of conducting business in this industry for over 20 years, the fundamental reason for the shrinking of the garment industry in Nepal is the supply system of ‘raw materials’.
Importing raw materials for the garment industry from other countries costs both time and money. As a result, the cost of producing ready-made clothing from imported raw materials is greater.
As prices rise, Nepali ready-made apparel is unable to compete in the global market with items from other nations. Consumption of Nepali products in the global market has dropped due to the inability to maintain competitive rates.
The government has also provided a percentage discount to the apparel manufacturing industry. However, the government’s minor quantity discount for the huge garment business has not made things any simpler. However, it has been seen that the reduction can be beneficial to tiny garment businesses.
Similarly, while there is a considerable market demand for high-quality pashmina in Nepal, there is no demand for bulk manufacture. As a result, there is no atmosphere for new investors to enter.
The garment sector, in particular, has not been able to flourish since the country has not been able to become self-sufficient in the raw materials needed to produce ready-made clothes and pashmina.
Aside from that, the ready-made garment and pashmina business in Nepal has been unable to thrive due to government policy issues, a shortage of manpower, and a lack of resources.
Government policy is now simpler than before. But not to the extent that it should have been. It can be much simplified. Even now, transporting items necessitates a significant amount of documentation. ‘The government emphasized the importance of producing raw materials locally, and if quality fiber yarn is accessible here, the clothing industry will thrive.’
In Nepal, there is a scarcity of technology, manpower, and resources to support the development of manufacturing and processing businesses. To become a manufacturing nation, good manpower, government policies, and technology must be available.
For example, in neighboring China, the government has implemented a number of measures to encourage investment and access to innovative technologies. Such policies should be implemented by the Nepali government.
Garment industry does not need foreign investment
Foreign investment is not required for the garment industry if the government prioritizes security. Nepal is the source of sufficient investment for garment. As the garment business does not necessitate a significant investment. 2 to 4 crores is sufficient.
High risk in startups and new investments
Youths are more interested in startups that can generate novel and innovative ideas than in existing industries and businesses. Making fresh investments in the country, on the other hand, appears to be a highly perilous scenario right now.
The government’s revenue collection has now declined. Current expenses exceed income. The government is in a situation where it needs to borrow money to cover its present expenses. There is no environment conducive to fresh investment. The stakes are high. It appears that resources are being organized for investment, and that investment will done when the moment is appropriate.
It is impossible to build an investment climate in Nepal until the government provides business-friendly facilities such as new technology, manpower, tax breaks, and subsidies. Similarly, the government should make greater facilities and privileges available to the manufacturing, processing, and export industries.
Large businessmen and manufacturers in Nepal have now diversified their investments in a variety of areas. If there is an issue in one area, it is feasible to recover in another. However, because of this, medium and small investors that have invested in the same field face no difficulties.
As even large investors are not permitted to conduct business with the bank in which they have invested. There is a firm policy in place. If I have a bank investment, I cannot borrow money from that bank for other purposes. However, it does not appear to be a major issue.
Another point is that it is not the government’s responsibility to conduct business and enterprise. The government will establish a policy. To make things easier. The majority of the government-invested industries in Nepal have failed financially.
Investments have been lost. Because the output of other domestic and foreign industries began to be available in Nepal at a lower cost than the production of government-run industries and corporations, the production and trade of government-run industries dropped. Government industries were unable to develop competitive capability and competence.
Preparing for market expansion
I have studied textile management. I feel at ease in this industry as both my academics and experience are in this subject. Our family already had a business. I didn’t want to do business at first. My family business, on the other hand, was about the same subject I was studying.
The family made an investment in the garment sector and began operating it. My family advised me to go in the clothing industry. Later, after completing a family business course in Mumbai, I joined my family’s garment business.
Various ups and downs occurred while this business was under my direction. There was a major difficulty in the business in 2008. Then, in 2011, during the American twin tower attack, the purchasing company for our items in the same tower was damaged. As a result, we lost half of the market.
Following that, the COVID-19, which debuted in 2019, caused a dramatic drop in business. Our business has finally begun to settle down after COVID.
Last year, our industry’s production increased by 40%. This year has also seen a 40 to 50 percent increase.
In the coming year, we predict that the total yearly turnover of our clothes will be 600 million. We intend to launch a new global brand of ready-to-wear and pashmina, particularly in the United States and India.”