Bangladesh team in Gujarat for garment warehousing

A business team is now on a visit to the Indian state of Gujarat to select a garment warehousing site that will be constructed by Bangladeshi entrepreneurs to boost exports to India.

“We visited public and private sites in Gujarat in the last two days. We sat with government high-ups and top businessmen in Gujarat,” Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry, told The Daily Star by phone.

Ahmad is leading the team comprising representatives from Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Cotton Association.

“We have discussed ways to establish a warehouse to market clothing items across India and set up garment and yarn factories.”

The Indian government has accepted Bangladesh's proposals and agreed to allocate lands to establish the business hub in Gujarat, he said.

Bangladesh looks to establish the hub as the country seeks to boost its annual garment exports to the Indian market to $1 billion in three years from about $100 million now.

Bangladesh has been trying to sign a deal with India for many years now to maintain a steady supply of cotton to Bangladesh as India sometimes stops the supply of the fibre without prior notice. As a result, Bangladesh's textile and garment sectors face troubles. “So, we have proposed to establish some yarn manufacturing units in India so that we can spin yarn from cotton and send it back to Bangladesh for a steady supply of the raw material.”

The warehouse, garment factories and spinning mills would be constructed and operated by Bangladeshi entrepreneurs, he said. India will only allocate the lands.

It is also an opportunity for India to receive foreign direct investment and create jobs, Ahmad said.

On the restriction by Bangladesh Bank on investing abroad, Ahmad said the government is now much more liberal as its foreign currency reserves are close to $27 billion.

The BGMEA had demanded the 50 acres of land in India to establish the warehouse during Indian Prime Minister Narendra Modi's visit to Dhaka in June.

Demand for Bangladeshi garments is high among the growing middle class in India thanks to lower prices.

Although India provided a duty and quota-free market access for all Bangladeshi goods, except 25 alcoholic and drug items, in 2012, it levied a 12.5 percent countervailing duty on garment items in the following year that hampered apparel exports to India.

“India is a big market for us, with an annual retail size of over $40 billion for the growing middle-class consumers,” said Reaz-Bin-Mahmood, vice-president of BGMEA.

Bangladesh exported garment items worth $104.25 million in fiscal 2014-15, rising from $96.26 million in the previous 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 a year ago, 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.


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