Earnings soar 26.37pc in first 10 months of FY19
The export of garments to non-traditional markets has grown by 26.37 per cent in the first 10 months (July-April) of FY2018-19 on a year-on-year basis thanks to an incentive package and duty-free market access. The shipments recorded earnings of USD 3.15 billion during this period, up from the USD 2.73 billion recorded for the same period in FY2017–18. Markets in the US, Canada, and Europe are considered traditional. Any market other than these are known as non-traditional markets. This type of markets can be found in Chile, China, Japan, India, Australia, Brazil, Mexico, Turkey, South Africa, and Russia, where Bangladeshi apparel exports are vastly growing. Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA), told The Independent the government had announced a cash incentive to non-traditional market back in 2010, which was 5 per cent at that time. Earlier, apparel-makers did not want to go to those markets because it took a lot trouble and time to enter a new market, as businesspersons needed to talk to different people, do their own research and gradually make their way, he explained. Moreover, when a manufacturer entered a new market, he/she needed to lower the product price. These two reasons dissuaded garments manufacturers from exploring markets. But with the government giving cash incentives for a long period, garments owners started exploring new destinations and markets, said Rahman. “These two prime reasons have inspired exporters to explore new markets that have grown over the past four to five years,” he added. Another reason, said Siddiqur, was that most of the non-traditional markets offered duty-free access to Bangladeshi apparel exporters. He also said that a cash incentive of 4 per cent was set last year (2018). “Presently, non-traditional markets are contributing 15–16 per cent of total export earnings,” he added. In the July–April period of FY2018–19, Bangladesh had earned USD 420.13 million from China, registering a 37.48 per cent growth from the USD 305.59 million recorded during the same period of FY2017-18, according to the Export Promotion Bureau (EPB). Siddiqur said China, the world’s biggest apparel supplier, started importing products from Bangladesh because the Chinese government had allowed duty-free access to over 5,000 Bangladeshi products. About 40-50 crore people in China belong to the high middle income group, said Siddiqur. The inspection by Accord and Alliance has helped to remediate the factories and prompted factory owners to emphasise workplace safety, which eventually lifted the country’s image before the foreign buyers, he observed. Around 105 LEED-certified green garments factories are in operation and another 300 are in the process of getting the certification. Among the top 10 green garment factories in the world, the first seven are located in Bangladesh, said Rahman. Bangladesh earned USD 403.05 million from India in the July-April period in FY 2018-19, up from the USD 225.57 million earned in the same period of FY2017-18. Former senior vice president of the Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA) Faruque Hassan said: “Famous international retail brands like Zara and H and M have established their business in India. We are the biggest supplier for these companies.” “Another reason is that the Indian domestic market has grown and the numbers of fashion-conscious consumers have increased. It is a win-win situatio for the two countries,” he added.
