Bangladesh’s apparel exports increased 9.77 per cent yearon- year to $28.12 bn in the first 11 months of the current Fiscal Year (FY) 2017-2018. Knitwear exports rose by 11.48 per cent to $13.94 bn and woven garments exports were up by 8.15 per cent to $14.18 bn. According to the data from the Export Promotion Bureau (EPB), overall, exports rose 6.66 per cent year-on-year to $33.72 bn in the July-May period. The earnings narrowly missed the periodic target of $33.87 bn.
In recent months, garment exports to the US has been declining as China, India and Vietnam are performing well to the US markets but the earning from garment export even crossed the 11 months’ target at 3.24 per cent to $27.24 bn.
The RMG export has done well in the new markets like in Japan, India, Russia, South Africa, and Australia and in Latin American markets but we need to modernize our machinery and production for more productivity to be more competitive in the global apparel markets. The garment factories are full of orders from international retailers and brands, thanks to the massive progress in workplace safety carried out by the Accord, the Alliance, and the government.
At the same time, the government’s recent budgetary proposals to increase both the corporate and source tax rates would bring a fresh blow to the readymade garment (RMG) industry. The budgetary measures if implemented would increase the cost of production while eat up its competitive edge in the global market and seriously affect the export earnings from the RMG sector. There are already impediments that need to be removed for speeding up the growth while the proposals would hinder it.
On the other hand, the proposal to increase VAT on the apparel items of local brands in the proposed budget would pose a serious threat to the local apparel industry as prices will increase and imported apparel products can occupy the market.