Of all the markets we serve, Canada has the single largest duty gap: knit apparel pays 18% MFN duty — but Nepal-made garments enter at 0% under Canada’s Least Developed Country Tariff. On a CA$60,000 order, that’s roughly CA$10,000 that either goes to the CBSA or stays in your margin, depending on where the garment was sewn. Here’s how it works, what changed in 2025, and what a Canadian buyer actually has to do.
The duty table, by origin
| Origin | Duty on knit apparel into Canada | Condition |
|---|---|---|
| Nepal | 0% (LDCT) | Cut & sew in Nepal — fabric from anywhere |
| Bangladesh | 0% (LDCT) | Same |
| China | 18% (MFN) | No preference |
| India | 18% (MFN) | No preference (a trade deal is under negotiation, not in force) |
| Vietnam | 0% only under CPTPP yarn-forward | Yarn and fabric must originate in CPTPP countries — much Vietnamese apparel fails this and pays 18% |
The Vietnam row deserves a second look: Nepal’s preferential rules are now easier than Vietnam’s. CPTPP demands yarn-forward origin, and Vietnam imports most of its fabric from outside the bloc — so plenty of “Vietnam” apparel lands in Canada at full 18%. Nepal’s rule has no such trap.
What changed in January 2025
Canada overhauled its preference programs (CBSA Customs Notice 24-41, effective 1 January 2025): for apparel, cutting and sewing in an LDC now confers origin regardless of where the yarn and fabric came from. Chinese or Indian fabric, sewn in Nepal, is a Nepali garment at 0%. The old transshipment restrictions were relaxed at the same time, and the program framework is legislated through to the end of 2034. It is, honestly, one of the most generous apparel-origin rules in any major market — here’s how these origin rules work in general.
One thing we’ll flag plainly, because buyers should hear it from suppliers first: Nepal is scheduled to graduate from UN LDC status, and Canada will eventually adjust its list. Removal isn’t automatic on graduation day — it happens through Canadian orders, historically with transition runway — but if Canada matters to your sourcing plan, it’s a reason to build the relationship now, not later. Our full LDC-graduation explainer.
The paperwork, without mystery
- We complete <strong>Form B255</strong> — the exporter’s Certificate of Origin for textile goods from an LDC — which is what CBSA wants to see behind an LDCT claim.
- You (the importer) register once on CBSA’s CARM portal, pay 5% GST at import (recoverable as an input tax credit for registered businesses), and a customs broker typically charges around CA$75–150 per entry.
- That’s it. No quota, no licence, no special permit for knit apparel from Nepal.
Labels done right for Canada — before the goods ship
Canadian textile labelling has specifics: fibre content must appear in English and French, garments must carry the Canadian dealer’s name and address or their CA Identification Number, and imported apparel needs country-of-origin marking. We sew all of that in at the factory — bilingual fibre labels, your CA number, “Made in Nepal” — so goods arrive retail-ready instead of becoming a relabelling chore in your warehouse.
Who this fits
Canada’s promotional-products industry alone turned over about CA$1.35 billion in 2024, and its blank-apparel supply has consolidated into two mega-distributors — which is exactly when a direct factory relationship starts earning its keep for decorators and brands with repeat styles. And Canadian buyers already import from South Asia at enormous scale: Bangladesh ships over a billion dollars of apparel to Canada each year under the very same 0% tariff — even Canada’s own biggest blank brand manufactures there. Nepal offers the same duty treatment with something the mega-hubs won’t give you: minimums from about 1,000 pieces per style and a factory that answers. How low-MOQ production works.
Logistics, honestly
Nepal is landlocked: sea cargo routes via Indian ports, then roughly 30–40 days to Vancouver or 35–45 days to Toronto/Montréal including the inland leg. Samples and urgent top-ups fly ex-Kathmandu in about a week. Plan it like any South Asia programme — on a buying calendar — and the duty saving pays for a lot of patience.
An 18-point duty gap doesn’t make a bad garment good. But between two good garments, it decides which supplier’s quote wins — and it isn’t close.
See our knit range, or send us a style you currently buy with your landed cost, and we’ll quote it delivered to Canada — duty at zero, labels done, B255 included.