Duty-free access boosts RMG exports to India
Author / Source : Jasim Uddin Khan
Dhaka, Nov 17: Exports of ready-made garments (RMG) to India recorded a rapid growth during September and October following the neighbouring country lifting duty on 46 new RMG products. According to the Export Promotion Bureau (EPB) statistics, woven products worth US $18 million and knit products worth $7 million were exported to India during the first four months of the current fiscal, as against $8 million and $2 million, respectively, during the corresponding period of the previous fiscal. EPB statistics also show that RMG exports to India went up significantly during September and October. Indian Prime Minister Manmohan Singh announced the duty free facility for RMG exports to India during his visit to Dhaka on September 6 and 7.
The best thing that could happen to the RMG sector is that its products do not face any kind of non-tariff barriers as other Bangladeshi products do in the Indian market, the president of Bangladesh Garments Manufacturers and Exporters Association (BGMEA), Shafiul Islam Mohiuddin told The Independent. “Large global retailers that have branches in India are placing queries with leading Bangladeshi exporters, which is encouraging,” Mohiuddin added.
The volume of exports will rise significantly in the coming years as Indian retailers have started shifting orders to Bangladesh from China, he pointed out.
Knit products, especially T-shirts, knitted trousers, jerseys, pullovers, cardigans, hand socks, undergarments and singlets, have huge demand in India and the export of these products will increase the market share of these Bangladeshi products significantly, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Salim Osman said.
Immediate past BGMEA president Abdus Salam Murshedy said India’s decision to extend duty-free access to 46 Bangladeshi products could accelerate Bangladeshi RMG exports by $5 billion a year.
The RMG sector still needs more than two years to put up required infrastructure, improve the manufacturing environment, create a good business-to-business understanding and find out potential Indian buyers, BGMEA director Khondoker Jamil Uddin said. However, he added with a hint of pessimism: “A number of agreements were signed with India during the past regimes, but their implementation rate is very frustrating.”
Indian customs administration has a negative attitude towards Bangladeshi goods entering India, BGMEA vice-president Nasir Uddin Chowdhury said adding, they make unnecessary delays in clearing export cargoes, and this proves costly to both Indian importers and Bangladeshi exporters. “In India, there are many bureaucratic complexities.
It is very tough to develop a business-to-business relationship by overcoming those problems,” Chowdhury further added. Before India allowed duty-free access to the 46 products, Bangladesh enjoyed duty-free facility for the export of 10 million pieces of RMG products to India a year. Initially, India allowed access to eight million pieces of apparel.
According to the EPB statistics, Bangladesh apparel shipments to India amounted to $35 million in the fiscal 2010-11, out of the country’s total export volume of $19 billion.
Bangladesh grabbed only 0.0013 per cent of India’s $28-billion clothing market. Bangladeshi RMG products enjoy high demand in India, but the products could not be exported in larger volumes due to the quota system.