Garment shipments to Japan decline

Apparel exports to Japan, Bangladesh's most promising export destination in Asia, dipped 3.88 percent in fiscal 2016-17, which exporters blame mainly on the terrorist attack in Gulshan last year that killed seven Japanese nationals.

Exports of garment products to the far-eastern nation -- whose apparel market is worth about $40 billion a year -- raked in $744.47 million last fiscal year, according to data from the Export Promotion Bureau.

“The slowdown in shipment growth to Japan is temporary,” said Tareq Rafi Bhuiyan, secretary general of Japan Bangladesh Chamber of Commerce and Industry, adding that Japanese retailers have once again started coming to the country to place orders.

Not only clothing retailers, but Japanese multinationals that have operations in Bangladesh for many years have expanded their operations and some are on their way to investing more after the Holey Artisan Bakery attack, he said.

Bhuiyan went on to cite the recent survey by the Japan External Trade Organisation in which Bangladesh was the top investment destination for Japanese entrepreneurs out of 20 Asia and Pacific countries.

Japanese retailers are more thorough than others: they physically survey the production units to verify the compliance standards.

“This was one of the major reasons for slowdown in garment export to Japan last fiscal year. Many Japanese retailers either deferred their trips to Dhaka or cancelled them altogether after the attack,” Bhuiyan said.

Garment shipments to Japan from Bangladesh began after the adoption of 'China Plus One' policy by the Japanese government in 2008 to reduce overdependence on China for goods like apparel, electronic gadgets and home appliances.

The 'China Plus One' policy was supplemented by the relaxation of the Rules of Origin by Japanese government for least-developed countries, which worked in Bangladesh's favour.

Bangladeshi garment manufacturers have been enjoying zero-duty benefit on apparel exports to Japan even if the raw materials were imported.

The fiscal stimulus package introduced by the government for new markets in 2009 has also helped in boosting exports to Japan.

The government has been handing out cash incentives upon export to destinations other than the US, the EU and Canada.

“We have to work a lot to grab more market share in Japan,” said Syed Mohammad Tanvir, director of Pacific Jeans, a leading garment exporter.

Pacific Jeans' shipments to Japan are increasing but slowly, he said, while declining to share any figure.

Until now, Japan imported 95 percent of its annual requirement for garment items from China, he said.

Overall exports to Japan also declined 5.6 percent to $1.01 billion in fiscal 2016-17.

Japan is the only destination in Asia where Bangladesh's overall exports crossed the $1 billion mark in each of the previous two years.