PUSHPAMAN SHRESTHA is the president of Nepal Pashmina Industries Association. Also the managing director of Nepal
Pashmina Industry, Shrestha has a rich experience in pashmina trade and industry. He spoke with THT Perspectives about
the opportunities and challenges facing the industry. Excerpts:
What is the current status of Nepali pashmina industry?
In its heydays, that is in 1999-2000, Nepal used to export pashmina worth around Rs 10 billion. The export had dwindled to just Rs one billion by 2009. After a long slump, pashmina sector seems to be on the path of recovery. The latest record of exports for the current fiscal year shows that Nepal has already traded pashmina worth around Rs two billion and we hope that by the end this fiscal year, it would amount to Rs three billion. One factor contributing to the rise in export is the increase in the value of dollar.
However, effective marketing mechanism through the registration of Nepali trademark ‘Chyangra’ in the international market is the
key behind the recent success. The trademark is registered in 40 countries and we are in the pocess of registering it in six more countries.
Yet another important factor behind the growing trade of pashmina is the development of professionalism and entrepreneurs becoming more aware of the trade values. To tap the potential customers, our entrepreneurs are concentrating on newer designs and product diversifications.
How is silk related to pashmina?
Silk and pashmina products share an intimate relationship. Initially, Nepali pashmina products only used cotton and yarn from Chyangra goat. Later, Nepali entrepreneurs invented the idea of employing silk in pashmina products instead of cotton. And that had a tremendous impact in the international market. The blend actually created the brand image of pashmina as it is known today. Today in the international market, the general understanding is that pashmina means a product with a blend of 70 per cent pashmina yarn and 30 per cent silk. It is hard to say whether Nepali pashmina would assume the same reputation in the international market if the pashmina products were not based on silk.
How has the silk produced within the country aided in manufacturing pashmina?
We hear that silk is being produced in different districts of the country. But I don’t think pashmina industries are able to use Nepali silk because the production, if any, is inadequate to support pashmina industries as of now. Therefore, we have to depend on imports,
mostly from China.
We do have reports saying Nepal can produce adequate high quality silk to meet the requirement of the pashmina industries. Not just silk, reports also say that Nepal can produce 40 per cent of pashmina yarn for its industries. But unfortunately, we are not able to
directly use the raw pashmina wool of our country. The wool is exported to China at a cheaper price and then refined fibres are bought back at a much higher rate.
What are the major constraints facing the pashmina export?
Although Nepal created the pashmina brand in the international market by including silk in pashmina products, China exploited the lush market through mass production of silk based pashminas. So we have been focusing on value added pashmina products by
catering to and targeting specific group of clients.
Internationally, we face specific constraints regarding the government announced incentives and the soft loan declared by Nepal Rastra Bank (NRB). Though the government says it grants two to four per cent cash incentives on exports, we are unable to claim it thanks to a complicated procedure. Similarly, procedural constraint has prevented us from benefiting from the soft loan policy of NRB.
Moreover, if the government prioritised silk industry, we wouldn’t have to depend on silk imports for manufacturing pashmina. Optimum utilisation of processing plants of Chyangra wool in the country would ease pashmina industry. If we could utilise quality domestic raw materials, it would enhance our capacity to compete in the international market as the cost of production would go down.
However, at present, just the easy procedures regarding incentives and soft loans would do the needful to boost our competitiveness.
What is the impact of the fluid political environment on pashmina industry? How optimistic are you about the future of the industry?
Pashmina industry shares the hurdles faced by the entire industrial and trade sector, such as power crisis, labour problems and strikes that directly impact productivity.
Obviously, the situation following the dissolution of the constituent assembly has resulted in suspicions and doubts about the smooth
functioning of industries and trading activities. Our clients are concerned about timely delivery of every order they place. Confidence of suppliers of raw materials has been wavering. In fact, the political situation of confusion and uncertainty has brought on a change in the outlook of our trading partners.
But I think that the dark clouds rising from the political turmoil will clear soon because I believe that political leaders will forge a
consensus to figure a way out. There is no alternate to it. Once done, the economic prosperity will follow.