Bangladesh has made gradual progress in reducing some investment-related constraints and offered opportunities for investment, especially in energy and power, pharmaceutical, information technology, telecommunications, and infrastructure sectors. The US Department of State made the observation in its “Investment Climate Statements 2015,” which provide country-specific information and assessments on investment-related laws and other important factors for doing business abroad. Investment Climate Statements include examples of countries’ expanding openness to foreign investment and investor protections, as well as relevant market barriers that may deter investment. Topics include host countries’ legal and regulatory systems, dispute resolution, transparency, intellectual property rights, state-owned enterprises, and labor-related issues. “With over 6% annual growth sustained over the past two and a half decades, a large, young and hard-working workforce, and vibrant private sector, Bangladesh offers opportunities for investment, especially in the energy, power, pharmaceutical, information technology, telecommunications, and infrastructure sectors as well as in labor- intensive industries such as readymade garments, household textiles, and leather processing,” said the investment climate statement dated on May 29. The statement, which was made available online yesterday, said: “Sustained economic growth, a demographic dividend, and increased reforms of the RMG sector are resulting in substantial interest in investing in Bangladesh.” There was significant political violence and uncertainty during the first quarter of 2015 following the one-year anniversary of controversial national elections held in January 2014. While this raised concerns of a short-term, adverse impact on business and investment, growth forecasts for 2015 remain above 6%, it added. Government policies are generally in favor of increased economic growth, but are hampered by slow and incomplete implementation issues involving the regulatory and rule of law environment, said the statement. Besides, commenting on the a 16-point action plan outlining next steps as part of a longstanding effort to address in a meaningful way worker rights and safety problems in Bangladesh, the statement said: “If implemented, the plan would provide a basis for the President to consider reinstating Generalized System of Preferences (GSP) trade benefits”. On June 27, 2013, US President Barak Obama suspended trade facilities for Bangladesh under the GSP scheme over workers rights issue. At the time of the announcement, the US government outlined a 16-point action plan for Bangladesh for the restoration of GSP trade facilities. Bangladesh actively seeks foreign investment offering a range of investment incentives under its industrial policy and export-oriented growth strategy, with few formal distinctions between foreign and domestic private investors, the investment statement said. According to Bangladesh Bank, the country received $1.5bn as foreign direct investment (FDI) in the FY 2013-14, up from $990m in the previous year. Commenting on Bangladesh climate, the US state department said it has made gradual progress in reducing some constraints on investment, but inadequate infrastructure, financial constraints, bureaucratic delays, and corruption continue to hinder foreign investment. The lack of effective alternative dispute resolution mechanisms and slow judicial processes impede the enforcement of contracts and the resolution of business disputes, it added.

Source: https://www.dhakatribune.com/business/2015/jun/08/investment-climate-improves-bangladesh

Exports of woven garment to the European Union (EU) are increasing in recent times, helping exporters compensate the loss from the US market, industry insiders said. Despite a weakening euro, they said shipment of woven items to the market of 27-nation regional bloc is on the rise, driven by relaxed rules of origin made effective in 2011. Shipment of woven apparel to the US market edged down by 1.6 per cent, but export of woven products to the EU posted a 7.0 per cent growth in July-April of the outgoing fiscal year, compared with the same period a year ago, according to Export Promotion Bureau (EPB) data. The country’s shipment of woven and knit products to the EU market amounted to $5.29 billion and $7.13 billion respectively during the same period, the data showed. Exporters blamed the tragic industrial accidents including the Rana Plaza building collapse and Tazreen fire as well as 2013 political turmoil for the downtrend in apparel exports to the US last year. Overall apparel exports to the US market are, however, witnessing a continuous upward trend this year following a declining trend in 2014. Bangladeshi made woven items fetched $ 3.18 billion and knit $ 1.03 billion during July-April of FY 2014-15 from the US market. In FY 2012-13, woven export growth to the US was recorded more than 7.0 per cent, the EPB data showed. Though Bangladesh apparel exports to the US are increasing this year, other competing countries like India and Vietnam are doing better, president of Exporters Association of Bangladesh (EAB) Abdus Salam Murshedy told the FE. Apparel exports to the US by Vietnam, one of main competitors of Bangladesh, and India grew by 13 per cent and 9.0 per cent respectively during January to April period of 2015, he added. “Their currencies are depreciating while local currency is appreciating against US dollar and it is eroding our competitive edge,” he noted. He said cost of production is also going up by nearly 10 per cent in recent times due to wage hike and ongoing safety measures prescribed by Accord and Alliance. Euro is also weakening against the US dollar, but local exporters are still maintaining competitiveness in the EU market as it allows GSP (generalised system of preferences) facility to Bangladeshi made products, he added. Moreover, India and Vietnam are grabbing orders shifted from China as they are more competitive than Bangladesh, Aslam Sunny, vice president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, adding Bangladesh Taka is appreciating against US dollar while currencies of Vietnam and India are depreciating, making imports from Bangladesh costlier. “And the GSP facility is one of main reasons why (our) woven exports are increasing in the EU market, despite woes in the US,” said Mr Murshedy, also former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Since the relaxation of the rules of origin requirement in the GSP of the EU in 2011, exports of woven products have been on the rise to the EU market, Centre for Policy Dialogue (CPD) said in its recent ‘State of the Bangladesh Economy in FY2015 and the Closure of Sixth Five Year Plan’ report. The US levies high customs duty on the imports of woven garments from Bangladesh, realising $392 million last year, the think-tank said.

Source: https://www.thefinancialexpress-bd.com/2015/06/08/95715

Bangladeshi garment makers yesterday demanded 50 acres of land in Gujarat to build warehouses to supply apparel items directly to retail shops across India.Warehousing is necessary as Bangladesh seeks to boost its annual garment exports to the Indian market to $1 billion in three years from about $100 million now, Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association or BGMEA.So, we need direct marketing and warehousing will facilitate it,” Islam said after a meeting with Indian Prime Minister Narendra Modi at Sonargaon Hotel in Dhaka yesterday.Garment makers have readied a $25 million fund to build the warehouses, according to Islam.“India is a very big market for us. The annual retail market size of India is set to cross $40 billion with the growing middle-class consumers,” Islam said.“It’s an opportunity for us as the Indian government has started widening connectivity by liberalising trade policy,” he said.India has already allowed almost all globally renowned clothing retailers to operate in its market.If we are allowed to build warehouses in Gujarat, we will also be able to supply garment items to those retailers,” the BGMEA chief added.Islam said they also demanded removal of India’s 12.5 percent countervailing duty (CVD) so that Bangladeshi garment makers can export more.Although India provided duty-free and quota-free market access for all Bangladeshi goods, except 25 alcoholic and drug items, in November 2012, it levied the CVD the following year, which started hampering garment exports to India.“I also demanded withdrawal of India’s 4 percent state level special duty on apparel exports to India,” Islam said.Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry, who led the 11-member team at the meeting, said Bangladeshi businessmen also demanded that both Benapole and Petrapole ports remain open every day for smooth export and import activities.On average, the two ports remain closed for three days a week, as it is a holiday in Bangladesh on Fridays, while Saturdays and Sundays are holidays in India. “We want the ports to remain open round the clock,” Ahmad told The Daily Star by phone.“Our target is to develop the South Asian region just like the European Union. We thanked Modi for his announcement of regional connectivity initiatives through signing the trade deal,” Ahmad said. “Modi was very positive in the meeting. We want Indian investment here. We want Indian partnership in constructing the deep seaport in Bangladesh. Modi agreed to our proposals.”In fiscal 2013-14, Bangladesh exported garment items worth $96.26 million, rising from $75.21 million in the previous fiscal year.Bangladesh’s overall exports to India were worth $456.63 million in 2013-14, compared to $563.97 million in the previous year.Bangladesh’s imports from India were recorded at $6.03 billion in fiscal 2013-14 and $4.78 billion in the previous year, according to data from the commerce ministry.It is believed that India exports goods worth more than $6 billion to Bangladesh a year through informal channels.

Source: https://www.thedailystar.net/business/garment-makers-seek-build-warehouses-india-93610

Bangladesh Bank (BB) Governor Dr. Atiur Rahman has urged Indian businesses to utilise Bangladesh’s investment scope like low cost manufacturing base to produce goods for local, Indian, and global markets, and also exploring market access for exports from the country. “India, our closest large neighbor is partnering with us in promoting trade and investment linkages, with much needed investments in railway and other communication infrastructure,” the central bank chief said while addressing a seminar as the principal discussant. The seminar titled ‘India-Bangladesh Relation: Regional Prosperity and Amity,’ was organised by the Rastrabiggan Samity on Friday, according to a BB press release. BB governor also said cooperation in this area has much further to expand and deepen, including in developing new Special Economic Zones (SEZs). “With demographic dividend of large pool of low cost labor force, Bangladesh is now a fertile base for massive volumes of new investments in the areas of manufacturing, infrastructure, education and technology,” the governor explained. He also said: “Under the dynamic leadership of Prime Minister Sheikh Hasina, Bangladesh is already a robustly growing developing economy steadily gaining in macroeconomic stability and external sector strength on transition path to a higher growth trajectory.” Held at Senate Bhaban in Dhaka University, the seminar was attended by a large audience that included academics, experts and policy makers from various government and non-governmental organizations.

Source: https://www.daily-sun.com/printversion/details/48950/Indian-businesses-urged-to-utilise-investment-scopes

Textile millers have urged the central bank for raising its Export Development Fund (EDF) loan limit and extend repayment period to help primary textile sector grow further. Bangladesh Bank should raise the EDF loan limit to $20 million from present $15 million and extend repayment period to 270 days from 180 days now, president of Bangladesh Textile Mills Association (BTMA) Tapan Chowdhury demanded Saturday. The demand came at a seminar titled: ‘Export Development Fund (EDF)- Towards the Growth of Textile Industry,’ organised by BTMA in the capital. Tapan also demanded extension of EDF facilities to weaving, dyeing and printing-finishing sub-sectors of primary textile sector (PTS) for raising the sector’s value addition and competitiveness. “Apart from uninterrupted and reliable supply of energy and power, we need more financial support in the form of credit facilities at low interest rate to import cotton, other man-made fibres, dyes and chemicals in large volume,” Tapan said, adding: “Here EDF can play a significant role.” Established in 1989, EDF is an incentive to the exporters and is intended to facilitate access to financing in foreign exchange for input procurements by manufacturer-exporters. The main objective of EDF is to promote export of non-traditional items manufactured in the country and to meet up the liquidity shortages of export oriented business for import of raw materials. The size of EDF is now $1,500 million. Authorised Dealer (AD) banks can borrow funds in US dollar from the EDF against their foreign currency loans to manufacturer-exporters for input procurements. BB charges LIBOR+1.5% interests on six-month EDF loan disbursements to ADs, while ADs charge LIBOR+2.50% interests from their clients. BTMA president said though the EDF facility is available to spinning mills but because of lack of awareness and knowledge many mills can not avail this facility. Besides, the BTMA member mills using EDF facilities find the existing limit insufficient to meet their actual needs, he added. Because of global cotton price volatility, millers sometimes find it hard to meet their fund demands with low EDF limit, which compels them to take loans from banks at very high interests, the sector leader pointed out. If the issues are addressed properly, Tapan thinks that the country’s whole apparel industry is ready to earn the targeted $50 billion from exports by 2021. At present, Bangladesh is in second position importing around 5.5 million bales of cotton in 20104 valued at $2.56 billion. The industry’s growth rate is 83 percent in a decade.

Source: https://www.daily-sun.com/printversion/details/48948/Textile-makers-seek-extension-of-EDF-loan-repayment-time

Prime Minister Sheikh Hasina on Saturday said a greater connectivity is very vital for the development of the two countries and the region saying that the signing of a slew of deals on that front are examples of two countries commitment to seamless connectivity, reports UNB. “We understand each other’s concerns and priorities. Prime Minister Modi (Narendra Modi) and I agree that a greater connectivity is vital for the development of the two countries and for the region,” said Prime Minister Sheikh Hasina mentioning that connectivity across the region will reduce inequalities maximising welfare gains. She made the remark in her statement at a joint press statement issued on Saturday mentioning that the new trade facilitation measures incorporated in signed agreements would create new opportunities for more trade, investment and business. “We’ve very good cooperation in power and energy sectors.” The Prime Minister mentioned the signing of the Coastal Shipping Agreement, the renewal of the Trade Agreement and the Protocol on Inland Water Transit and Trade, as well as the flagging off new bus services are examples of their commitment to seamless connectivity across the region. Describing the moment as truly a historic moment, Hasina said, “We’re transforming our relationship to a greater” On LBA issue, Hasina said with the exchange of the letters of ratification of the 1974 Land Boundary Agreement, a 68-year-old humanitarian issue comes to a peaceful end. “We’re extremely happy that the land boundary issue has finally been resolved. I appreciate Prime Minister Modi’s leadership in achieving it. It has been possible for his bold leadership” Hasina thanked the people of India and all the political parties in India for their unequivocal support to the agreement. “In this context, I recall with gratitude the historic role of our Father of the Nation Bangabandhu Sheikh Mujibur Rahman and then Indian Prime Minister Srimati Indira Gandhi.” The Prime Minister recognised the contribution of Indian President of India Pranab Mukherjee. “We recall with deep gratitude the enormous contribution of India in our glorious War of Liberation.” She said Bangabandhu Sheikh Mujibur Rahman, in a speech delivered in Kolkata on 06 February 1972 had said, “As for us, we’ll be wanting to cooperate with all concerned for creating an area of peace in South Asia, where we could live side by side as good neighbors and pursue constructive policies for the benefit of our people….” “This visionary statement encapsulates how we look at South Asia. I believe we could collectively achieve greater peace, stability, progress and prosperity for the people in the region which was the dream of our Father of the Nation,” she added. The Prime Minister mentioned that India is certainly Bangladesh’s most important neighbour and one of key development partners. “India made invaluable contribution during our War of Liberation for which we are deeply grateful.” To bring balance in trade between the two countries she said both countries agreed to establish Special Economic Zones in Mongla and Bheramara for India. “We hope this would increase Indian investment in Bangladesh substantially. Today, we have signed a number of bilateral documents, covering diverse areas of cooperation,” she said. These include economic cooperation, trade and investment, security, infrastructure development, education, science and technology, IT and culture. The Bangladesh Prime Minister said cooperation in such a vast area shows the depth, breadth and maturity of partnership for development. “We also discussed the issues of sharing of water of 54 common rivers. We both reiterated our strong commitment to make our borders peaceful and prosperous. We also pledged ‘zero tolerance’ against terrorism and extremism,” she added. The PM said people-to-people contact is the strongest of links. “Together, we decided to open Bangladesh Mission in Guwahati, Indian Missions in Khulna and Sylhet. This again reflects our growing mutual confidence and shared commitment to expand our relationship. We have to translate the Declaration into concrete deliverables. I assure you, Prime Minister, that we are committed to extend full support and cooperation in this journey,” Hasina said adding that her Indian counterpart’s visit has infused a new dynamism and confidence in relationship between the two countries.

Source: https://www.newstoday.com.bd/index.php?option=details&news_id=2413254&date=2015-06-07

Chittagong Metropolitan Chamber of Commerce and Industry in its budget reaction said 1 per cent tax at source proposed in the budget for FY 2015-16 would have a negative impact on exports. Vice-president of the CMCCI AM Mahbub Chowdhury made the comment on the budget proposals. He said the lion’s share of the export earnings comes from the RMG (ready-made garment) sector. So, imposition of source tax on RMG is illogical, he added. RMG owners have shouldered wage enhancement of the workers while garment owners are facing problems adjusting with compliances enforced by foreign buyers, Mr Mahbub said. Huge interest incurred on bank loan, factories run on diesel-run generators due to lack of adequate electricity and political instability have pushed the industry people at their back because foreign buyers offer orders at reduced prices. On the other hand, the ports have enhanced charges threefold, he added. Many factories will face closure if the existing source tax is further increased, he said, adding that this would force many garment manufacturers to cut their workforce. The CMCCI vice-president, however, thanked the government for placing a robust budget with the target of ADP (annual development programme) at Tk 970.00 billion and GDP (gross domestic product) at 7.1 per cent. Former CCCI president Farid Ahmed said this budget is not appropriate for changing lot of 160 million people of the country.  “It is the budget that would make the rich people richer and the poor people poorer. It is the budget from which looters of the society would gain most,” he said in an instant reaction. There is no step in the budget to encourage the rural economy and generate employment for millions of people in rural areas.  “I cannot understand the justification of such a huge budget with a deficit of Tk 890 billion,” he said.

Source: https://www.thefinancialexpress-bd.com/2015/06/07/95602

Primary textile millers sought on Saturday facilities including raising the limit of Export Development Fund (EDF) to $25 million from $15 million and repayment period to 270 days from 180 days. They also demanded extension of the facilities to their other sub-sectors like weaving, dyeing and printing-finishing. Their demands were placed at a seminar on ‘Export Development Fund (EDF) Towards the Growth of Textile Industry’ organised by Bangladesh Textile Mills Association (BTMA) in the city. The seminar was organised to apprise the BTMA member mills of some issues and increase their awareness and knowledge about EDF through interactive discussion. Due to lack of awareness and knowledge many of the member mills cannot avail the facility while many of them find the existing limit insufficient to meet their actual need. Executive Director of Bangladesh Bank was present as the chief guest at the seminar presided over by the BTMA President Tapan Chowdhury. The BB introduced EDF to facilitate import of raw materials of the export-oriented industries at a low rate. And considering the importance of the bulk use of raw cotton by the spinning mills, the central bank has extended the limit to $15 million. Bangladesh is fully dependent on imported cotton to run its spinning mills to produce yarn and with the increasing demand for more imported cotton and cotton price being volatile, many mills find the EDF limit inadequate. Moreover, spinning mills fail to get their export proceeds from the RMG factories in due time because of their reluctance or negligence in giving timely acceptance and subsequent maturity date, causing serious dislocation in the supply value chain, they added. This ultimately affects the member mills adversely in running their production at high cost thereby eroding their competitive edge over other competing countries, they observed. Considering the difficulties faced by the millers, Managing Director of Badsha Textiles Ltd Badsha Mia requested the central bank for raising the EDF limit to $25 million and also the repayment period to 270 days. He also demanded increasing the repayment period to 180 days from existing 120 days for Export Processing Zones (EPZs). Millers also demanded inclusion of C category factories in the EPZs in the EDF as they are local ones. General Manager of the central bank Kazi Sayedur Rahman described different aspects of the fund while presenting his key-note paper. Responding to the demands of the textile millers, he suggested the businesses to apply to the department concerned of the central bank requesting extension of repayment limit. “We can’t open the 270 days repayment limit for all as it will have some adverse impact on some others,” he said adding that the central bank has already allowed such facility on case to case basis. Majority of the fund is being disbursed among the garment makers, he said while presenting his paper. Some 56 per cent of the fund is availed by BGMEA, 21 per cent by BTMA, 11 per cent by BKMEA, 7.0 per cent by accessories makers and 1.0 per cent by leather sector, he added.

Source: https://www.thefinancialexpress-bd.com/2015/06/07/95589

Bangladesh yesterday signed a deal with India to develop two economic zones to bring in more Indian investments and reduce the rising trade imbalance with the neighbour.The industrial enclaves will be set up in Mongla, the country’s second seaport, and Bheramara, Kushtia in five years, Paban Chowdhury, executive chairman of Bangladesh Economic Zones Authority, told The Daily Star by phone.He shared the development after signing an agreement with Indian Foreign Secretary Subrahmanyam Jaishankar, marking the two-day visit of Indian Prime Minister Narendra Modi in Dhaka.The Indian Economic Zone will promote Indian investments in Bangladesh, said Modi in his written speech.India becomes the third country after Japan and China to have shown interest in developing economic zones in Bangladesh. Once set up, they will create jobs and give a boost to the economy as it aims to break the 6 percent growth trap.Chowdhury said India will develop the economic zone near the government-sponsored one in Mongla, which is now under construction.India wants over 200 acres of land in Mongla and 477 acres at Bheramara to establish the zones, he added.The zones will be developed with funds obtained from the $2 billion line of credit from India, according to the BEZA executive chairman. “As there will be no uncertainty regarding funds, we expect the zones can be developed in three years.”The government will provide land to establish the zones, which can be set up by leasing it out or through equity participation, he said, adding the details will be finalised based on discussion.“I will prefer equity participation of BEZA in the management of the zones. However, I will have no objection if Indian developers want to develop the zones themselves.”Chowdhury expects the majority of investors in the two economic zones to be from India.Bilateral trade between Bangladesh and India currently stands upwards of $6 billion, with the balance heavily in favour of New Delhi.The government has so far approved 30 public and private economic zones in different parts of the country. Of them, the implementation of Sirajganj, Mongla, Mirsarai, Anwara and Srihatta economic zones is progressing well.

Source: https://www.thedailystar.net/business/two-economic-zones-india-93220