As Nepal’s garment sector was recovering from years of downturns, the virus pandemic has emerged as a big setback for the sector after foreign buyers cancelled orders to the tune of Rs 1.25 billion. This was disclosed by a frontline news website, The Kathmandu Post recently.
The report quoted the the Garment Association of Nepal as saying that foreign buyers have so far cancelled or held up orders worth Rs 1.25 billion of readymade garments from Nepal in the wake of the Covid-19 pandemic.
According to the Trade and Export Promotion Centre, an export promotion and facilitating agency under the Commerce Ministry of Nepal, the cancelled or held up orders are equivalent to around 28 percent of Nepal’s total garment exports in the first 11 months of the last fiscal year 2019-20 which ended in mid-July.
In the first 11 months of the last fiscal year, readymade garments worth Rs4.54 billion were exported.
In the previous fiscal year 2018-19, Nepal had exported readymade garments worth Rs6.34 billion, a 13-year high in terms of value. As the garment sector was recovering from years of downturns, the virus pandemic has emerged as a big setback for the sector.
The readymade garment industry is one of the sectors worst affected by the pandemic as demand from the international market plunged as the global economy faces the worst ever recession, only comparable to the Great Depression of the 1930s.
Global supply chain disruption caused by the pandemic has also affected the smooth supply of goods in the international market, the report added.