Nepal: Clothing brands express interest in Nepal as potential production hub following 50% US tariff on Indian exports
"Hit by Trumpโs steep tariffs, garment giants in India turn to Nepal", 31 August 2025
International readymade garment brands operating in India, including Indian labels exporting to the United States, have begun exploring Nepal as a potential investment and production hub, according to multiple sources...Nepali garment manufacturers also confirm that Bangladeshi investors have been visiting Nepal with similar interests.
The sudden wave of interest follows US President Donald Trumpโs decision to impose steep tariffsโ50 percent on Indian exports and 20 percent on Bangladeshi exports to the US. However, a US appeals court on Friday termed Trumpโs blanket tariffs illegal.
In contrast, goods imported from Nepal face only a 10 percent tariff...
โSeveral Indian garment companies are actively exploring the possibility of establishing factories in Nepal, while others are looking into partnerships with local producers to enhance capacity for exporting to the US,โ Pashupati Dev Pandey, president of Garment Association Nepal, told the Post.
International brands that have traditionally manufactured in Indiaโsuch as GAP, Puma, Nike, and Zaraโare among those showing interest in relocating part of their production chain to Nepal, said Pandey.
โIf possible, Indian readymade garment companies want to begin investing within six months. Some may collaborate with Nepali firms, while others could operate independently. They are currently reviewing the legal procedures, and we are ready to support them,โ Pandey added...
However, officials in Kathmandu say there have been no formal inquiries. โThe Department of Industry has not received any inquiries or foreign direct investment proposals from Indian garment companies,โ said Prashant Bohara, director of the departmentโs Foreign Investment and Technology Transfer Section...
With Indian exporters already sitting on huge stockpiles of garments meant for the US market before the tariff hike, some reportedly eye Nepal as a potential backdoor. โThere are concerns they may try to ship goods via Nepal using counterfeit โMade in Nepalโ labels to disguise the country of origin,โ one source said...