Bangladeshi RMG makers may have to set up manufacturing units if they want to establish any warehouse in India.
The India auhority hinted at setting up of manufacturing units by the RMG business leaders during a meeting held in Gujarat between the two parites.
“The Indian government hinted us at establishing manufacturing units for the sake of its interest, creating employment, if we want to open our warehouse there,” BGMEA Vice-President Shahidullah Azim told the Dhaka Tribune.
Azim said, “We’ve to move forward with the policy of building some warehouses as well as some manufacturing units as the Indian counterpart wants us to establish manufacturing units there first.”
Azim, who has returned home after a two-day visit in India’s westernmost state of Gujarat to see the prospect of setting up a warehouse for grabbing the local market there, was talking to the Dhaka Tribune.
During the trip, a five-member delegation visited three economic zones including Sanand Industrial Estate under Gujarat Industrial Development Corporation, Amitar Green Hi-Tech Textiles Park Private Limited and Viraj Integrated Textile Park to see whether it is fitting to set up a warehouse in India.
“Based on the facilities offered by the zones’ management, we’ve selected Sanand Industrial Estate for setting up a warehouse,” said Azim.
He also disclosed that the estate offered uninterrupted power connection and other facilities while there is no obligation of allowing trade union there.
According to the offer, Bangladesh can get land at a cost of Rs3,500 per square metre while per unit electricity price will be Rs6.5.
Regarding the high land prices, Azim stated that though the offered land price is much higher, we have to get it at a reasonable price through bargaining at the high level G2G meetings.
There is a domestic market of US$32b in India, which offers duty-free access and if we can establish a warehouse and distribution center there, it will help us to grab more market there, said Azim.
On the restriction by Bangladesh Bank on investing abroad, Azim also said, “As we’ve recently talked to Bangladesh Bank (BB) governor about this issue, he has shown a positive attitude as the government is now much more liberal in this regard.”
In response to the invitation of Indian Prime Minister, a team of Bangladesh’s RMG manufacturers and FBCCI President Matlub Ahmad visited Gujarat to know about the possible challenges and prospects of setting up a warehouse and distribution center there on August 22.
During a meeting with Indian Prime Minister Narendra Modi’s visit on June 7, the BGMEA President informally sought a 50-acre land in India for a warehouse and a distribution centre.
On June 14, the BGMEA submitted a formal proposal to the Indian High Commissioner in Dhaka Pankaj Saran to convey the message to the Indian authorities concerned.
According to the proposal, the land will be procured in the name of the company to be formed by BGMEA, BKMEA and others.
The trade bodies will make an investment of approximately $25m to set up the warehouse and distribution centre.
The apparel makers will open 1,000 retail stores in different Indian cities to display and sell their products to earn a sum of $1b in the next few years, reads the BGMEA proposal.
In FY2014-15, Bangladesh exported apparel products of $104.25m to India, which was $96.26m in the previous fiscal year. While, Bangladesh’s overall exports to India risen by 15.45% to $527m compared to$456.63m in FY2012-13.
