Category Archives: Economic Growth/GDP/Exports and Foreign Trade

Dhaka, Washington to ink trade, investment deal soon

Dhaka, Washington to ink trade, investment deal soon
Nizam Ahmed

Bangladesh and the United States are likely to sign soon a trade and investment cooperation deal to facilitate increased US investment in this South Asian country, especially in its energy sector, officials said on Friday.

Furthermore, the deal, for which terms and conditions are being worked out by both sides, is expected to help Bangladesh to export more of its products to the US.

If everything goes ahead unhindered and the terms and conditions are agreed upon by both parties, the deal under the title of ‘trade and investment cooperation forum’ will be signed during an expected visit by a high-level functionary of the US administration, a senior official of the ministry of commerce (MoC) said.

Officials of the ministry of foreign affairs in Dhaka are expecting that the US Secretary of State Hillary Clinton will visit Bangladesh in the near future to sign the deal between the two countries.

Sources in the US embassy in Dhaka said the deal is likely to be signed soon, but they, however, could not confirm whether Ms Clinton would visit Bangladesh on the occasion of signing any such deal.

“The deal, upon its signing, will pave the way for a substantial increase of US investment in Bangladesh mainly in its energy sector and also boost opportunities to help expand bilateral trade,” a senior official of the MoC said.

Foreign ministry officials said mutual cooperation in areas of food security, climate change mitigation and fight against terrorism, would also be included in the deal.

The new US Ambassador to Bangladesh, Dan W Mozena, at his first news conference in Dhaka last Thursday, also reiterated that signing of the ‘strategic deal’ for the forum would be his first priority.

The forum will be a platform for stakeholders of both the countries to discuss and sort out trade- and investment-related issues and settle them, Mozena told the reporters.

“The annual trade between the two countries stands now, in value terms, at $5.0 billion and the bilateral trade balance has mostly been in favour of Bangladesh that exports some $4.0 billion worth of goods, mainly the ready-made garment (RMG) to north America, mainly the US,” a source in the Dhaka embassy of the US told the FE.

Bangladesh is also lobbying to get duty- and quota-free access for RMG products to the US, despite a strong resistance from US textile manufacturers who fear such a concession to Bangladesh might hurt their own business interest.

The US imports around 40 per cent of Bangladesh’s annual garment exports worth $18 billion, while more than 50 per cent are imported by European Union (EU) and the rest by Japan, Australia, New Zealand, South Africa and India, exporters said.

As of now, Bangladesh garments enjoy already duty-free access to the EU and now in India which recently announced such a facility.

Officials at the Board of Investment (BoI) said so far the US was one of the largest source of foreign direct investment (FDI) in Bangladesh but owing to weekend, they could not give an exact figure.

But they said among the US hydrocarbon explorers, Chevron alone had so far invested more than $1.0 billion and ConocoPhilip, around $200 million.

They said the US energy firms were in the process of making more investments in Bangladesh as they had own deals for further exploration of natural gas in their respective onshore and offshore blocks, officials of the ministry of power, energy and mineral resources said.

The US investment initiatives have taken a new turn after Robert O Blake, US assistant secretary for the central and the South Asia told the US Bangladesh Advisory Council Congressional Reception in Washington in September last that Bangladesh was a destination for the US investment and a market for its products.

Bangladesh attracted $913.32 million as FDI in 2010 against $700.16 million in the previous year.

The FDI in 2011 is expected to be bigger as, besides the US energy firms, Chinese, Indian and South Korean firms have registered a good number of proposals for making investment in apparel and tourism sectors in Bangladesh.


Indian cos start placing orders for Bangladeshi apparels

Indian cos start placing orders for Bangladeshi apparels
Author / Source : BSS

DHAKA, Dec 2: Indian apparel companies and retailers are placing orders here to buy Bangladeshi garments in large volume taking advantage of the duty-free access and low prices, exporters said Friday. Many apparel companies of India’s famous brands including Arvind, Aditya Birla, Madura Garments,Provogue Zodiac Clothing, Raymonds, Vimal, Lews Philips, Van Heusen, Arrow,Lee, Levis, Wrangler and Dockers and others are intensely communicating with the Bangladeshi apparel manufacturers.

During the historic trip to Dhaka in September, Indian Prime Minister Manmohan Singh announced the duty free access of Bangladeshi apparels to Indian market in an effort to address the long-standing multi-billion-dollar trade imbalance that goes in India’s favour.

Talking to BSS, Abdus Salam Murshedy, president of the Exporters Association of Bangladesh (EAB), said his company received export orders of two lakh pieces of shirts worth two million US dollars from an Indian reputed brand “Pantaloons.”

“We have already sent the consignments to India,” said Murshedy, also former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

He said Indian top apparel brands and retailers are even ready to shift their manufacturing units to Bangladesh to route garments back to India encouraged by the Delhi’s zero tariff facilities to Dhaka.

Bangladeshi apparel entrepreneurs could give competitive price and ensure timely supply to Indian retailers, he said and favoured organising single country fair in India to give fillip to Bangladesh and Indian apparel makers. M Shafiul Islam Mohiuddin, president of BGMEA, said Bangladesh can easily penetrate the US$30b Indian apparel market. Mohiuddin, who led a business delegation of apparel exporters to India last week, said the BGMEA leaders discussed with Indian apparel associations, manufacturers, entrepreneurs and leaders of the Confederation of Indian Industry.

On providing zero tariff facilities to the Bangladeshi apparels in the Indian market he said, “Some Indian businessmen consider the tariff treatment as risky and others as opportunities.but Indian government stance on the market access is firm.”

Dhaka’s exports are valued just one-ninth of the $4.5 billion worth of goods India shipped to Bangladesh in the 2010-11 fiscal.

The garment deal is the best Dhaka secured for the sector from India since the 1990s, when similar duty-free access to the EU transformed Bangladesh’s apparel trade into a multi-billion dollar industry, say insiders.

Bangladesh is the world’s third largest garment manufacturer , exporting apparels worth 19 billion US dollars last fiscal.

The garment industry, which accounts for 80 per cent of the country’s total exports, relies heavily on orders from European and North America retailers such as Sweden’s H&M, America’s Gap and British supermarket Tesco, industry insiders say.    BSS

Trade concession boosts RMG export to India

Trade concession boosts RMG export to India
Nizam Ahmed

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.

More German investment on cards

More German investment on cards
Author / Source : Staff Reporter

Dhaka, Nov 29: A visiting German business delegation has offered to invest $100 million in Bangladesh if provided with land and suitable infrastructure, president of the apex trade organisation of Bangladesh said. “We had a long discussion with the delegation and they offered investment of $100 million instantly with more investment in coming days,” AK Azad, president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said. However, the delegation requested to ensure land facilities and proper infrastructure before making the investment, Azad said.

“German investment in Bangladesh was about $80 million in fiscal year 2010-11 and Germany is eager to expand investment in Bangladesh’s infrastructure, urban development and eco-friendly energy,” he added.

Azad said that during 2010-11 Bangladesh’s export to Germany was $3.43 billion against its import of $692.21 million and laid emphasis on enhancing the bilateral trade and investment.

To continue Bangladesh’s current growth it needs $28 billion more investment under the Public Private Partnership (PPP), Azad said.

Germany is the second largest export destination of Bangladesh after the USA where Bangladesh enjoys a huge trade surplus.

Main exports to Germany from Bangladesh are knitwear, woven garments, home textiles, frozen food, agro-products, jute goods, leather goods and medicines.

The FBCCI president was speaking at a luncheon meet organised by FBCCI in honour of German business delegation and entourage of visiting German President Christian Wulff at Hotel Ruposhi Bangla on Tuesday.

The leader of the delegation Karl-Ernst Brauner said that the business delegation is different from any business delegation and they were not here to make “quick bucks”.

Referring to the huge trade surplus that Bangladesh enjoys in bilateral trade with Germany, Brauner said, “We are not concerned about that.

We want Bangladesh to move up in the value chain and then you will need to buy German machinery to do business. It’s a win-win situation.”

“We also have a proposal of investing €27 million in thread industry in Bangladesh. But it depends on getting land and other infrastructural support,” he said.

Brauner, also the director of the department of foreign trade policy, ministry of economics and technology of Germany, said the German president’s visit is not the ending point rather it is the start of a long-term relationship.

Saiful Islam, president of Bangladesh German Chamber of Commerce and Industry (BGCCI), said the bilateral trade between Germany and Bangladesh has seen a growth of 50 per cent this year where Bangladesh enjoyed a growth of 50 per cent and Germany 36 per cent.

Islam said that during Prime Minister Sheikh Hasina’s Germany visit this year in October 70 German company expressed their interest to invest in Bangladesh,
Islam said the government has to realise the policy of setting up Special Economic Zone (SEZ), which was approved in August 2010, in a bid to provide suitable environment for investment.

New RMG markets under exploration

New RMG markets under exploration
Author / Source : STAFF REPORTER

DHAKA, NOV 29: Apparel makers have started diversifying their markets in view of alarming recession in Europe and America.

“We’re firm to fight off the looming crisis eventually,” Md Shafiul Islam Mohiuddin, president of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) said on Tuesday while speaking to members of the Overseas Correspondents Association of Bangladesh (OCAB), a group of stringers of overseas media. The news briefing was attended by Md Siddiqur Rahman and SM Mannan Kochi — vice presidents — and all BGMEA directors.

The apparel sector trade body chief said Bangladeshi readymade garment (RMG) entrepreneurs are resilient and have overcome all obstacles, thanks to the positive taken by the government.

“We’re determined to surpass even the last year’s earnings of $18 billion,“ Mohiuddin said, adding that the target is achievable, given the present hectic moves by the BGMEA in exploring new markets. BGMEA has found huge markets in India and Latin American countries.

The BGMEA chief, who has just returned from a trip to India, said the neighbouring country holds out great promise for Bangladeshi garments. He said all the Indian stakeholders, including the central textiles ministry officials, have assured the BGMEA of all-out cooperation in facilitating duty- and quota-free access of 46 apparel items from Bangladesh to the huge Indian market.

Mohiuddin further said his organisation will organise  four big exhibitions in four major cities of India soon.

He also pointed out that Latin America too has a very big market for Bangladeshi garments. “Initiatives are being made to explore it,” he added.

The BGMEA president announced the holding of the 22nd three-day BATEXPO in Dhaka from December 10 which both Prime Minister Sheikh Hasina and opposition leader Khaleda Zia will attend.

Last year, the BATEXPO found spot orders to the tune of $65 million.    There will be 142 stalls in this year’s exhibition while 25 have been allotted as foreign stalls. Arrangements have been made by the BGMEA at the Hazrat Shahjalal Airport to receive foreign participants in the 22nd BATEXPO. Shafiul Islam Mohiuddin said the recession in Europe and America has its severe effects on Bangladesh. “Orders have been squeezed with prices being offered are cut. Against this, we have to move forward with the help of all.”

He said that he is happy over the progress being made in the field of electricity as the present government has added 2,000 megawatts to the national grid. “But I am worried over the gas situation,” he said. Moreover, infrastructures have to be improved for quick movement of garments up to the port, he suggested.

“The thrust of this year’s BATEXPO will be on Branding Bangladesh,” he said, laying emphasis on projection of Bangladesh potentials.

“We’re not involved in exploring our markets alone; we care for our workers who toil day and night for what we achieved and what we aim to attain. They’re our heroes”, the BGMEA president said.  The BGMEA has set up 12 clinics in Dhaka, Narayanganj and Chittagong to ensure RMG workers’ healthcare. Each of the BGMEA member-factories has its own doctors to address the health needs.

Two full-fledged hospitals in Chittagong and Dhaka will provide round the clock healthcare facilities to RMG workers.

Germany wants to invest in energy, shipbuilding

Germany wants to invest in energy, shipbuilding

German entrepreneurs expressed interest to invest in solar energy, shipbuilding and infrastructure in Bangladesh ensuring a win-win situation for both sides, visiting German business delegation leader Dr Karl Ernst Brauner said in the city on Tuesday UNB.

“We’ve been here for a long-term trade relationship. We want to deepen our relationship,” he told a luncheon meeting at Ruposhi Bangla Hotel in the city.
He, however, wants Bangladesh to overcome the shortcomings in its physical infrastructure.

Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) hosted the meeting chaired by its president AK Azad.

German Bangladesh Chamber of Commerce Industry president Saiful Islam, FBCCI senior vice president M Jashim Uddin and FBCCI directors, including delegation members and Country Manager of DHL Global Forwarding M Nooruddin Chowdhury, were present.

Addressing the function, Brauner, also Director of the Department of Foreign Trade Policy, Germany said, “This visit is not an ending point, it’s rather a beginning of the long process of further cooperation…the visit is not a coincidence.”

He said Bangladesh has a unique society and it is a Muslim, secular and democratic country, and they want to strengthen bilateral relations with Bangladesh.

Speaking on the occasion, FBCCI president AK Azad said, “We had a long discussion with the German trade delegation and we’ve cleared many things.”

He said the visiting delegation has offered investment of US$ 100 million instantly with more investment in the coming days.

Referring to German President’s recent interview with the Bangladesh media, Azad said Germany is eager to expand its investment in Bangladesh’s infrastructure, urban development and eco-friendly energy.

“Dhaka and Berlin can enhance cooperation in mitigating the impact of climate change, an area in which Bangladesh plays a very important and constructive role,” he said quoting the German President.

He mentioned that Bangladesh exported commodities worth US$ 11.648 billion to European Union countries in 2010-2011 which was 50.82 per cent of the total export earnings.

“During the period, Bangladesh’s export to Germany was US$ 3438.70 million against its import of US$ 692.21 million,” he said laying emphasis on enhancing bilateral trade.

To continue Bangladesh’s current growth, Azad said, it needs US$ 28 billion more investment under the Public Private Partnership (PPP).

“Germany’s investment in Bangladesh was about US$ 80 million in 2010-2011 fiscal. We hope to see increasing investment in the future,” he said.

BGCCI president Saiful Islam said some 70 German companies have shown interest to do business and make investment in Bangladesh.

He urged the government to ensure one or two special economic zones in the country where German companies can invest.

Saiful also underscored the importance of finalising the proposed Economic Zone Act soon.

Myanmar to import potato from Bangladesh

Myanmar to import potato from Bangladesh
Star Business Report

Myanmar has shown interest to import potato from Bangladesh because of the low price of the item here, said the commerce minister yesterday.

Faruk Khan said Bangladesh will export a total of one lakh tonnes of potato to that country primarily.

The minister spoke at a press briefing at his office in the capital after returning from a three-day visit to Myanmar.

Bangladesh may get higher export prices for potato from Myanmar due to the low price facility, he said.

He said investors from Myanmar can now invest in Bangladesh as the cabinet approved a bill regarding that yesterday.

During the visit, he urged the leaders of both the countries to remove the banking problems, barriers in direct shipping for trade, and to lease lands in Myanmar for farming agricultural products by Bangladeshi entrepreneurs.

Khan said Bangladesh imported goods worth $180 million from Myanmar in last fiscal year and exported goods worth $20 million.

The imported goods include rice, lentil and gram while cement, pharmaceuticals, condensed milk and electric cables were in the export list, he said.

He said Prime Minister Sheikh Hasina is scheduled to visit Myanmar from December 5-6 to discus different bilateral trade issues.

“Myanmar wants to establish connectivity with Bangladesh in roads, air, waterways and railway.”