Textile News, Apparel News, RMG News, Fashion Trends
Editorial Trade & Business

Rise in import duty on Chinese goods opens opportunity for Bangladesh in Indian market

Indian government’s initiative to protect local apparel manufacturers has opened a new opportunity for Bangladesh readymade garment exporters in the neighboring country. Thanks to the Indian government for raising import duty on clothing items from China.

Rise in import duty on Chinese goods opens opportunity for Bangladesh in Indian market
Figure: India has doubled import duty on about 328 textile products aiming to reduce its imports of apparel goods from China.

In July this year, the Indian government has doubled import duty on about 328 textile products to 20%. The move is aimed at reducing its imports of apparel goods from China.

Since Bangladesh enjoys duty and quota-free market access to Indian markets, the rise in import duty of apparel goods from China would open an enormous opportunity for Bangladesh, sector people and trade analysts opined.

However, the government has to take steps in tapping the opportunity, while manufacturers have to move for identifying the products to be added to the list of new tariff rate.

“India’s decision of doubling import tax on more than 300 textile goods will be a boon for Bangladeshi apparel makers as they enjoy duty-free market access to the country,” Mohammed Hatim, Former Vice President of Bangladesh Knitwear Manufacturers and Exporter Association (BKMEA) said to the Textile Today.

India has the largest population and a growing middle-income group. Grabbing a small share of the market, definitely, our export to the Indian markets would see a sharp rise in the current year, said Hatem.

In fiscal 2017-18, Bangladesh’s RMG exports to India stood at $279.19 million, up by 115% compared to $129.81 million in the FY17, according to the Export Promotion Bureau (EPB) data.

Of the total amount, Knitwear products earned $71.05 million, which is 89.75% higher than the $37.44 in the same period a year ago. Woven products earned $207.62 million, up by 124.79%, compared to $92.35 million a year ago.

How to tap the opportunity

As a non-traditional export destination, India is a very potential market for Bangladesh. It is logical that if India’s textile products import from China decreases, Bangladesh can grab the space. But it is not confirmed whether India would meet their demand through import or local production.

However, Bangladesh government is providing cash incentives against the export to a new market. So, in order to diversify the export markets, the government should come up with policy support to take the advantage.

“Bangladesh’s apparel exports to India is not much higher but it is growing very fast. Imposing a new tax rate on Chinese product will increase the cost of products. And thus, Indian importer will move to Bangladesh for sourcing as it offers less price than Chinese manufacturers,” Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy said the Textile Today.

In tapping the opportunity, the government has to put emphasis on improvement of transportation of goods to the Indian market as well as devise new policy support for the exporters, said Salam, a Former President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

“Non-tariff barriers are a great challenge for Bangladesh in penetrating Indian markets. So, the government should highly focus on removing the non-tariff barriers,” Former Caretaker Advisor AB Mirza Azizul Islam said.

On the other hand, Bangladeshi manufacturers have to develop good relation with the global retailers, who are opting to open outlets in India, said Islam.

He also urged the manufacturers to identify the exportable items, which has prospects to grow.

In the last fiscal year, exports earnings from the apparel sector stood at $30.61 billion, which is 8.76% higher compared to previous year earnings. As per the latest data, non-traditional export markets, also called new markets, contributed $4.76 billion or 15.26% to total apparel exports of $30.61 billion in the last fiscal year.

The European Union (EU) contributed $19.62 billion or 64.12%, the US market, $5.35 billion or 17.48%, and Canada $963.15 million, or 3.15% in the same period.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

Latest Publications

View All