Apparel exports to promising Asian markets take a tumble

The fallouts from the coronavirus pandemic caused a dip in apparel shipments from Bangladesh to three promising Asian markets -- India, Japan and China -- in the last fiscal year, official figures showed.

In the years before the pandemic, garment exports to India had registered steady growth because of increased demands for the semi-high-end and basic apparel items from the neighbouring country's burgeoning middle class.

Besides, many international brands such as Walmart and H&M have opened retail outlets in India. As a result, garment shipments to the country have risen over the past few years.

However, apparel exports to India declined 15.70 per cent to $420.73 million in the fiscal year 2019-20 from $499.09 million the year before, according to data from the Export Promotion Bureau (EPB).

In FY18, Bangladesh had shipped $278.68 million in garment items to India, indicating that exports to the neighbouring nation were on the rise despite various non-tariff and para-tariff barriers.

Of the three Asian nations, Japan is the most promising market thanks to its duty benefits.

Garment shipments to the world's third-largest economy crossed the $1-billion mark a year ago but the Covid-19 has forced this value to move below Bangladesh's previous earnings.

Apparel exports to Japan fell 11.86 per cent to $961.94 million in fiscal 2019-20 from $1.09 billion a year ago. In 2017-18, Bangladesh exported garment items worth $846.74 million, EPB data showed.

Garment exports to Japan were growing mainly due to the high demand for woven formal shirts and some knitwear items. Some major Japanese retailers also directly source garment items from Bangladesh through their offices in the country.

Although China itself is the largest supplier of garments worldwide, apparels shipments to the world's second-largest economy from Bangladesh have been rising because of the high demand for the semi-high-end and basic garment items.

Since the rising middle-income groups in China can't afford the high-end garment items manufactured locally, they mostly rely on the garment items produced by Bangladesh.

Besides, the Chinese government has allowed duty-free access to 97 per cent of Bangladesh's products, including garment items.

Still, garment shipments to China slumped 34.86 per cent to $329.96 million in FY20 from $506.51 million in FY19. In FY18, Bangladesh exported apparel items worth $391.64 million to China, according to the EPB.

Exporters think that China, Japan and India could be the next major export destinations for Bangladesh's garment items. They are also interested to explore the markets as the government has been providing cash incentives on garment items under the non-traditional markets scheme since fiscal 2009-10.

Thanks to the incentives, the apparel shipment to the Association of South-East Asian Nations (Asean) is growing.

Bangladesh imported 87.66 per cent of its textile from Asian markets to make garments in 2018, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.

That year, Bangladesh imported textile and other items worth $12.5 billion, of which $514.50 million was sourced from the Asean countries, she said citing a study.

Expenditure on clothing and footwear in the Asean nations was $51.2 billion in 2017. In FY18, Bangladesh exported garment items worth $314.50 million to the Asean region, she added.

In 2016, the combined size of the GDP of the Asean nations rose to $4,034 billion from $2,373 billion in 2007. The trade bloc is set to become the world's fourth-largest by 2030.