Duty-free export apparels to India

Local apparel exporters have signed a memorandum of understanding (MoU) on duty-free entry of eight million pieces of Bangladeshi apparels into India a year. The garment exporters see the move as a step forward to enter an alternative market, which will ease dependence on the traditional US and European markets for readymade garments.

Anwar-ul-Alam Chowdhury Parvez, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said although the quantity of export is very negligible in terms of total export of the country, in the long run India may emerge as a major export destination for Bangladesh.

Fazlul Haq, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said India holds potential to become a major readymade apparel market for Bangladeshi exporters.

Although India made the offer two years ago under the South Asian Free Trade Agreement (SAFTA) framework, the authorities took time to reach a consensus on modalities for export. As per the final decisions, Bangladeshi exporters are now free to export the RMG products made of either Bangladeshi or any other country's fabrics. According to the proposals by India, a portion of RMG products from Bangladesh should have been made by Bangladeshi fabrics and the rest ones by Indian fabrics.

Bangladesh's exports hit over US$ 12 billion last fiscal year (2006-07) with around 75% of the earning coming from the readymade garment sector. The major export destinations for the $10 billion industry are the US and Europe.