As the new investment and business expansion were hit badly by the ongoing Covid-19 pandemic, imports of garment and textile machinery declined by 15.80 percent in the last fiscal year.
According to Bangladesh Bank data, in the fiscal year 2020-21, Bangladesh imported garment and textile machinery of $609 million, down by 15.80 percent, which was $723.56 million in the previous year.
Imports of textile machinery recorded a 6.72 percent decline to $177.24 million, which was $190 million. Garment machinery imports fell by 19.02 percent to $432 million, which was $533 million in the same period a year ago.
However, the overall imports of capital machinery in the fiscal year 2020-21 plunged by 12.39 percent to $3.74 billion, which was $4.27 billion in the last fiscal year.
Talking about the decline of capital machinery imports, industry people and economists opined that the ongoing Covid-19 pandemic put a bar on new investment. This is due to the slower demands of clothing products in the global market.
“With the outbreak of Covid-19 pandemic in March 2020, the global economic activities were halted and demands of apparel products fell sharply as people stayed at home to avert infection of the novel virus,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President Shahidullah Azim told the Textile Today.
Exporters faced order cancellation and slower work order inflows. Production capacity remained unutilized. That is why there was actually no new investment and expansion, said Azim.
As a result, imports of capital machinery declined. But we are hopeful to turnaround as the global economies are opening up and buyers are placing more work orders, he added.
“The present situation of the country’s private sector investment is very poor. The RMG sector is not out of that. As the sector is fully dependent on the global market and the demand fell, the sector did not make investment for expansion as well as new investment,” Dr. Khondaker Golam Moazzem, Research Director at Centre for Policy Dialogue (CPD) told the Textile Today.
On the other hand, ease of doing business is not in favor of the new investment, which is another reason for the downtrend in investment, said the economist.
However, the sector people also are very optimistic about the rise in capital machinery imports as the sector is recovering from the fallout of the Covid-19 pandemic.
In the textile sector, we are thinking of expanding our capacity as the work orders flow is increasing and the global economies are opening. So in the current fiscal, we are expecting a rise in imports,” Mohammad Ali Khokhon, President of Bangladesh Textile Mills Association (BTMA) told Textile Today.
But there is a problem regarding the connectivity of gas and electricity for new investment, which needs to get a quick response from the government, said Khokon.
He also urged the government to ensure an uninterrupted supply of gas in the textile industry so that the manufacturers can run the factory smoothly.
If these issues are addressed properly, there will be a huge inflow of investment from the investors both local and foreign, he added.