Trade concession boosts RMG export to India
Bangladesh garment manufacturers received export orders worth over $90 million from India in nearly two months since the big neighbour granted duty-free and quota-free access for 46 Bangladeshi ready-made garment (RMG) products to its market in early September, traders said on Wednesday.
The export orders received in two months until the end of October last was a quarter of some $360 million worth of RMG products Bangladesh exported to India in the fiscal year (FY) 2011, garment exporters said.
“We are in interaction with the Indian buyers and hope we will continue to get more and more orders,” Shafiul Islam Mohiuddin, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told the FE.
The RMG exports to India may cross the $2.0 billion mark in the next three years as per the estimation of the traders concerned following their recent tour of India aimed at reassessing business opportunities there.
Indian Prime Minister Manmohan Singh announced duty-free access for 46 garment products from Bangladesh, during his visit to Dhaka on September 6 and 7 last.
“It (garment exports to India) may be bigger, we expect to get a real scenario within the next three years,” BGMEA president Mohiuddin said.
If the trend continues, most Bangladeshi traders and officials are hopeful about Bangladesh’s trade deficit with India to come down to a tolerable level within next five years.
Currently Bangladesh imports goods worth more than $4.6 billion from India while it exports goods valued at about $600 million.
The trade gap is highly tilted towards the neighbouring country ever since the independence of Bangladesh, the officials of the ministry of commerce (MoC) in Dhaka said.
With the increase in exports of garment and some other items to India, which announced cut its sensitive list to 25 from 480, the trade gap is expected to narrow at a quicker pace, MoC officials said.
Indian Prime Minister Manmohan Singh announced the trimming of his country’s sensitive list for the least developing countries of the region at the recently held Summit of the South Asian Association for Regional Cooperation (SAARC) in Addu city of the Maldives.
Mohiuddin spoke to the FE as he was a member of a Bangladesh business team that visited New Delhi on November 24 and 25 under the aegis of the India-Bangladesh Chamber of Commerce and Industry (IBCCI).
The 46 garment products which obtained duty free access to India include pants, shirts, blouses, skirts, kids wear, cotton nightwear, jeans, swimwear and tracksuits.
Bangladesh garment manufacturers have become more competitive than their Indian counterparts over the past years though they lack an internal base of raw materials.
In some specialised items in both woven and knitwear, Bangladesh garment industry enjoys edge over Chinese apparel industry.
Bangladesh supplies its products regularly to international brands such as JC Penny, Wal-Mart, H&B, Marks and Sperncer, Carrefour, Addidas, Nike and Zara.
“It (getting orders from reputed brands) is possible because of our expertise attained through hard work over the past decades and if no untoward situation occurs Bangladesh garments will have more inroads in world export market,” Mohiuddin said.
However frequent enhancement of petroleum price, and gas and electricity tariff is a major concern which the members of the BGMEA are needed to address, some garment manufacturers said.
“Despite all this problems including some local and external conspiracies the Bangladeshi garments will continue to maintain its edge,” Mohiuddin added without giving details.
The total annual exports of Bangladeshi garments including woven and knitwear rose by 43.35 per cent to nearly $18 billion in the FY 2011. The export target for garments has been set at $20.29 billion for the FY 2012.