RMG exporters wary of Indian retailers' non-payment
Indian Lilliput Kidswear's non-payment to 22 Bangladeshi garment exporters in 2012 posed a major trade barrier between the two countries, said a top business leader yesterday.
“The non-payment issue had an instant impact on the confidence of our exporters,” said BGMEA President Siddiqur Rahman.
The chief of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the comment while addressing an Indian trade delegation at the BGMEA headquarters in Dhaka.
Some 22 small garment exporters are yet to receive payments amounting to $5 million from Lilliput, the largest childrenswear brand in India. The payments were supposed to be cleared by November 2011.
“We need to work on these issues in both the countries to build a relationship of trust among our business people,” said Rahman.
He also mentioned non-recognition of testing certificates of the Bangladesh Standards and Testing Institution by the Indian authority as an example of non-tariff barrier put up by the neighbouring country.
“Our authorities are aware of these issues and they need to seriously work on these.” India is already a major source for cotton, fabrics and yarns for Bangladesh as the local spinners and weavers cannot meet the demand, Rahman said.
“Around 45 percent of our cotton yarns are coming from India. We also import woven fabrics from India.”
India is the second largest producer of manmade fibre and filament. “So, there is a huge potential for bilateral trade,” said the BGMEA chief. Though trade between the two countries is growing every year, Bangladesh has a high trade deficit with India. It was $5.47 billion last year.
In 2011, India allowed duty-free access to all Bangladeshi goods, including garment. But after a year New Delhi imposed a 12.5 percent countervailing duty on garment items.
As a result, the garment export to India from Bangladesh started declining. Last year, Bangladesh exported garment items worth $279 million to India. “I think textile and apparel is a promising sector to strengthen the trade relations between the two countries,” Rahman added.
Even though India is the major supplier of yarns to Bangladesh, there is a long way to go in increasing the market share in the supply of fabrics, said Ujwal R Lahoti, chairman of the Cotton Textiles Export Promotion Council of India. Lahoti is leading a 25-member Indian trade delegation. Price and nominated business are the two major factors in deciding the source of fabric supply.
However, awareness about the fabric supply capability of Indian textile companies needs to be created among the fabric importers in Bangladesh, Lahoti said.
Of the total world trade in textile and clothing, about 60 percent is traded within Asia and it is bound to increase in the coming years thanks to expansion in installed capacities and requirement for fibre amongst the Asian countries, Lahoti added.
Tseten Nordon Cargyal, head of chancery of the Indian high commission to Bangladesh, also spoke.
Comments