Trying to import GitLab repository to Azure repository but I am getting the below error

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Import request cannot be processed due to one of the following reasons:

Clone URL is incorrect.
Clone URL requires authorization.

NOTE: I am getting this error even though I am providing the correct username and password. And I am able to clone the repository locally with the same clone url.

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If you are using credentials (username/password) to clone the repository, that should mean its URL is an HTTPS one.

This answer suggests an issue with an empty repository or a wrong PAT.
The last suggestions reminds me you should try and use a token as your password, instead of your GitLab account password. See if you can create a PAT (Personal Access Token), and use that as a password.