Industrialists are pressurising the government to request US Senator Dianne Feinstein (D-Calif) to reintroduce the customs and quota free bill for Nepali garments that she withdrew in May after 18 Tibetan refugees were deported back to China. "They want a guarantee from us that there will be no deportation in the future," says a senior Foreign Ministry official. "But how can we issue such a guarantee? We have accepted more than 150,000 refugees in the country but if someone arrives here illegally, we will have to deport them."

Nepali garment manufacturers say the government is not lobbying enough. "A high-level government team should have already been in the US for damage control, but they are not doing it," says Kiran Sakha of the Garment Association of Nepal.

The Nepali mission in Washington has been preoccupied with the payment row between Nepal Electricity Authority (NEA) and the Panda Energy International over the Bhote Kosi joint venture. Even before Feinstein withdrew the bill, the Texas-based Panda Energy had threatened to stall the customs and quota free bill if NEA did not clear its bill for electricity. NEA says all payments have been made, and instead faults Panda with not paying required royalty to the state on power.

Meanwhile, a Foreign Ministry official confirmed that even if the Tibetan and the Bhote Kosi issues are sorted out, something else will come up that will stall the garment quota bill since the US wants to protect its market. Garment exporters, insist that quota and customs-free Nepali exports would enable them to compete with other exporters after Nepal joins the WTO. Nepal's garment industry had registered exports worth $175 million in 2001, with more than 90 percent going to the US.