Kathmandu – Global garment brands operating in India, along with Indian exporters, are increasingly eyeing Nepal as a production hub after steep new tariffs imposed by the United States disrupted their business models. Nepali manufacturers also report growing interest from Bangladeshi investors, who face similar challenges.
The sudden shift comes after US President Donald Trump slapped 50% tariffs on Indian exports and 20% on Bangladeshi goods headed to the US. Though a US appeals court has called Trump’s blanket tariff measures illegal, the new duties have already shaken supply chains. By contrast, imports from Nepal are subject to just a 10% tariff, making the country an attractive alternative for international apparel companies.
Indian exporters are now in talks with Nepali stakeholders to explore joint ventures and factory setups. Industry insiders warn that the 50% duty on Indian garments, jewelry, footwear, furniture, chemicals, and sporting goods could be devastating, forcing many to consider relocation. Washington justified the levies as retaliation for India’s heavy purchases of Russian oil, part of Trump’s strategy to pressure Moscow over the war in Ukraine. The US remains India’s largest export destination, with $87.3
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