This year has been painful for Nepali importers as they failed to get their summer, autumn and winter shipments of readymade garments from the northern neighbour due to the Covid-19 lockdowns. And with a significant reduction of new imported clothes in the market, domestic apparel makers were quick to pounce on the opportunity to fill the void.

Chandi Prasad Aryal, president of the Garment Association of Nepal, said that sales of domestically-made apparels have taken a good market share this year due to the huge supply gap following the obstruction in the border trade, particularly in the northern border points.

The Nepal Trans-Himalayan Border Commerce Association, a grouping of importers, said that nearly 1,800 cargo trucks full of imports are stranded at Kerung and Tatopani borders points. The import of summer, autumn and now winter clothing — have also been affected.

“There has been a shortfall of raw materials which are imported. But Nepali garment manufacturers operated with the available raw materials and human resources to plug the supply gap,” Aryal said.

“The Covid-19 pandemic has been a lesson to Nepali manufacturers that market demand can be satisfied to some extent by domestically produced goods.”

The demand for apparel jumps during the Dashain festival as almost all people buy new clothes to celebrate the festival. The Covid-19 pandemic this year, however, dented consumer confidence.

Aryal said that the domestic garment sector is equipped with modern technologies and equipment for production but lacks raw materials.

According to the Trade and Export Promotion Center, the import of readymade garment declined by 31 percent in the first four months of the current fiscal year compared to the same period in the last fiscal year.

That’s mainly due to the goods carriers heading for Nepal being stranded at the Chinese border for almost a year with only a few containers allowed to cross the border.

The country imported apparel and clothing accessories worth Rs10.32 billion in the review period against Rs15 billion during the same period last year. The import of readymade garments stood at Rs24 billion in the last fiscal year.

Suraj Raj Pandey, CEO of Fibro, a domestic apparel brand, said that the drop in import of readymade garments has given makers of local products an opportunity. “As the import of foreign apparels was almost halted, homemade brands fulfilled the supply gap,” he said. “We observed a surge in sales and the number of inquiries is also high. While most of the sector suffered, we were able to make some profit,” he said.

Pandey said they made an average of Rs25,000 in daily sales which is impressive for a small local clothing brand like his. “And with fewer finished goods arriving from overseas, we have an opportunity to shine in the Nepali apparel market,” he added.

Despite high demand, Pandey has not been able to fulfil the supply due to the short supply of raw material.

Naresh Katuwal, president of the Nepal National Traders' Federation, said that demand for domestically produced readymade garments has increased in the market. “They are of good quality and affordable as well. There is a huge demand for garments in the market but domestic garment has not been able to fulfil it,” he said.

According to the Nepal Trans-Himalayan Border Commerce Association, imported clothes account for around 70 percent of market share in Nepal.

Nearly 80 percent of the readymade garments sold in the Kathmandu Valley are imported from China. The rest come from India, Bangladesh, Thailand, Vietnam and Indonesia.

Meanwhile, the country exported garments worth Rs2.21 billion in the first four months of the current fiscal year, a decline of 9 percent compared to the same period in the last fiscal year.

The country exported 4.98 million pieces of readymade garments during the review period. The total export of readymade garments was Rs4.87 billion in the last fiscal year.

According to Aryal, only 35 percent of factories producing readymade garments, particularly for export, have been operating due to the lack of raw material and shortage of workers.

The major markets for Nepali readymade garments are Canada, Europe, Australia and India which accounts for 90 percent of all shipments.