The promising growth in export earnings seen at three Asian markets during the previous fiscal year has come to a halt following the coronavirus outbreak.
Exports to China, India and Japan, three economic giants, were growing steadily over the last five years.
During fiscal 2019-20 as well, exports from Bangladesh were expected to increase significantly. However, the unprecedented pandemic slowed the shipments to those three destinations.
The consumer market size of the three Asian economic giants is worth trillions of dollars thanks to their strong consumer base and economic foothold.
In the immediate past fiscal year, shipments to China declined by 27.79 per cent year-on-year to $600 million and to India by 12.09 per cent to $1.09 billion while exports to Japan fell by 11.76 per cent to $1.20 billion, according to data from the Export Promotion Bureau (EPB).
As a least developed country (LDC), Bangladesh enjoys duty-free benefits to all three markets.
For instance, Bangladesh enjoys zero-duty benefits to India under the SAARC Free Trade Agreement (SAFTA), zero-duty benefit to Japan under the LDC category and the same for 97 per cent of Bangladesh-origin products shipped to China under the same criteria and Asia Pacific Trade Agreement (APTA).
Exports from Bangladesh to India crossed the $1 billion mark in fiscal to 2018-19. In the last fiscal year too, exports to India valued at more than $1 billion.
Exports to India have increased mainly for three reasons, including duty-free market access, operations of multinational clothing companies in India and a rising number of middle-income consumers in India.
For instance, the multinational clothing retailer H&M and Walmart have been operating retail outlets in the country.
As a result, garment exports to India have risen each year even though local exporters have to face a 12 per cent countervailing duty in Indian markets.
Japan has been turning into a major market for Bangladesh as well.
Garment exports from Bangladesh to Japan have grown at a fast pace due to the duty-free facility and for the reliance of a few Japanese brands on Bangladeshi apparel items.
"Now we are not planning about the expansion as coronavirus impacted our business. There is uncertainty for at least the next one year. So, we are just serving our existing customers and work orders," said Anwar Ul Alam Chowdhury Parvez, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
However, he is very hopeful about the potentials of these Asian markets as exports to all three destinations have increased gradually. However, Bangladesh should not depend only on apparel shipments.
Bangladesh should shift its industrial base to the production of heavy equipment like construction and hospital equipment and light engineering to grab the opportunities at Japanese, Chinese and Indian markets, Parvez told The Daily Star over the phone.
Tareque Rafi Bhuiyan Jun, general secretary to the Japan-Bangladesh Chamber of Commerce and Industry, said he believes the following is required and should be considered seriously: the signing of free trade agreements (FTA) between Japan and Bangladesh.
"Signing an FTA between Bangladesh and Japan will definitely enhance exports from Bangladesh to Japan and also increase Japanese investments in Bangladesh," Jun told The Daily Star in response to a WhatsApp message yesterday.
"The Araihazar economic zone development should happen on time so that it can attract Japanese companies soon," Jun added.
The government allocated special economic zones to all three of the Asian economic tigers -- Japan, India and China -- as investment proposals are coming from those countries.
Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, in an interview with The Daily Star earlier this week, also called for seizing the opportunities the Asian giants provide amid this pandemic.
Apart from the EU and US markets, Bangladesh should focus more on the Asian markets to revive the country's earnings from export amid the Covid-19 outbreak, said Rahman.
Some 80 per cent of the country's exports are destined for European and American markets and little focus is given to the Asian markets even though those destinations have a lot of promise for Bangladesh.
Asian markets, especially the Indian and Chinese ones, are very important for the country. For instance, China has allowed duty-free facility for 97 per cent of products.
"This is a big opportunity for our country. We need to grab this opportunity in Chinese markets," Rahman said.
Bangladeshi exports to Chinese markets are growing as the demand for Bangladeshi products, especially garment items, is growing among the middle-income people in China.
Although China has a big consumer base, not all Chinese consumers can afford the high-end garment items made in their country.
As a result, many Chinese clothing brands source garment items from Bangladesh at competitive prices for their domestic customers even though China is the world's largest apparel supplier with a 34 per cent global market share.