Garments shipments to non-traditional markets grew by 55.63 per cent to USD 403.14 million in the first month (July) of the current fiscal year (FY2019–20) compared to the same period of the previous year (2018–19).
The previous year's figure was USD 259.03 million. This growth was largely due to an incentive package and access to duty-free markets.
Other than traditional markets, such as the US, Canada and Europe, the rest are considered non-traditional markets. Among them, Chile, China, Japan, India, Australia, Brazil, Mexico, Turkey, South-Africa, Russia are markets where Bangladeshi apparel exports are vastly growing.
Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers' and Exporters' Association (BGMEA), told The Independent that the government had announced a cash incentive of 5 per cent for non-traditional markets way back in 2010.
Explaining the reason, Rahman said apparel-makers earlier did not want to go into those markets because it involved a lot of trouble and time to enter a new market. Also, when a manufacturer enters a new market, they need to lower the product price below the average price.
For these two reasons, garment manufacturers did not want to explore new markets, eh added.
But now, the cash incentive being provided by the government over a considerable period of time has encouraged garments owners to explore new destinations and markets, he noted.
“This has inspired exporters to explore new markets, which have grown tremendously over the past four to five years,” he added.
Another reason is that most of the non-traditional markets provide duty-free entry to Bangladeshi apparel exports, said Rahman.
The present cash incentive is 4 per cent. It was fixed last year (2018) at this time. “Presently, non-traditional markets are contributing 15–16 per cent of the total export earnings,” said Rahman.
In the first month of FY2019–20, Bangladesh earned USD 53.64 million from China, recording a growth of 25.83 per cent from USD42.63 million during the same period of FY2018–19, according to the Export Promotion Bureau (EPB).
Rahman said China, the world’s largest apparel supplier, had started importing products from Bangladsh because the government of that country allowed duty-free access to over 5,000 Bangladeshi products.
According to Siddiqur, China’s middle- and high-income groups comprised 40–50 crore people.
Moreover, the inspection of Accord and Alliance has helped remediate the factories and prompted factory owners to emphasise workplace safety, which eventually lifted the country’s image before foreign buyers.
Around 105 green garment factories in operation are completely LEED (Leadership in Energy and Environment Design)-certified and another 300 are in the process of getting the certification. Of the top 10 green garment factories in the world, the first seven are located in Bangladesh, said Rahman.
In the first month of FY2019-20, Bangladesh earned USD 68.68 million from India, registering a growth of 53.06 per cent from USD44.87 million earned in the same period of FY2018–19, according to the EPB.
Former senior vice-president of the Bangladesh Garment Manufacturers' and Exporters' Association (BGMEA), Faruque Hassan, cited a couple of reasons for the growth in the Indian market. “Famous international retail brands, such as Zara and H and M, have established their businesses in India. We are the biggest supplier for them,” he said.
“Another reason is that Indian domestic market has grown considerably and the number of fashion-conscious consumers has increased over there. We import raw materials for readymade garments like cotton and machinery from India. So, its export is also increasing. It is a win-win situation for both countries,” he added.
Published On : 06-09-2019
Source : The Independent bd
