Indian apparel manufactures have expressed worry over the duty free import trade of readymade garments from Bangladesh. Under the South Asian Free Trade Area (SAFTA) agreement, Bangladesh was allowed to export more than 60 products including RMG to India without any duty. The Bangladesh’s share in international RMG market is next only to China. The value of RMG imports from Bangladesh was $104.25 mn in 2014-15. It touched $499.09 mn in 2018-19. Though Bangladesh earlier did not take advantage of SAFTA agreement, its RMG exports to India grew up to 480 percent in the last five years.
The imports from Bangladesh were considered as one of the main factors that caused stagnation in the domestic textile business. Being one of least developed countries, the country enjoys various trade advantages. Besides that, the neighbour has an edge in cheap labour. Many big players in the Indian apparel industry have established manufacturing units in Bangladesh and involve in exports to countries including India.
Indian Government imposes GST on the textile goods sold in the domestic market. But without any duty, the same products from Bangladesh reach our domestic market. The cost difference would be 10-15 percent between both the products. In case of transportation cost from Bangladesh, it is not much higher compared to transporting from West Bengal.
But the biggest threat is from China because many Chinese companies took undue advantage of the duty-free exports from Bangladesh to India. The textile companies from China provide fibre and fabrics to the units in Bangladesh and get them exported as finished goods to India.
Despite industry’s various representations, the Central Government has not taken any steps to solve this issue. The government should imply restrictions and ensure that fibre and fabric utilised for goods imported from Bangladesh is produced and manufactured in that country itself.