CVD Hurts Nepali Garment Exports to India.

The levy of countervailing duty (CVD) of four percent on Nepali garments entering India is hurting Nepal’s garment exports, in spite of the removal of the additional customs duty on Nepali garments by the Indian Government.

CVD on Nepali garments was reintroduced by the Indian Government through the 2011 Budget, after a gap of nearly two years.

However, Nepal’s garment exports to India are expected to rise by 20 percent after India waived off the additional customs duty on 162 Nepali export items, including garments, in November 2011.

“The removal of additional customs duty is definitely benefiting Nepal’s textile and garment sector. Earlier we were paying duty of around 10 percent comprising of additional duty and CVD. But now, we just have to pay 4 percent CVD,” Mr. Uday Raj Pandey, President of Garment Association – Nepal (GAN), told fibre2fashion.

“But, to make Nepali garments more competitive in Indian markets, we are also asking for the removal of CVD, which is imposed on those types of products that are under excise in India. The relations between India and Nepal are very cordial and India also wants to develop our industry. Hence, we are hopeful that the Indian Government will waive this duty for us,” he reasons.

An optimist GAN President says, “Nepal is a small market compared to India, and hence the Indian Government may consider our case positively and remove CVD. It may take time, but we are hopeful that it will happen. We are in talks with our Government as well and we hope they will arrive at a decision soon.”

During Nepali fiscal year 2010-11, the country exported readymade garments worth NPR 4 billion, of which exports to India accounted for NPR 500 million.

Source : fibre2fashion.com