Accessories Exporters Give Clarion Call For Bangladesh To Shed Over-Dependency on RMG

Trade & Policy

Accessories Exporters Give Clarion Call For Bangladesh To Shed Over-Dependency on RMG

The Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) gave a clarion call to the government to put an end to over-dependency on a particular sector for purpose of development.

The office bearers of BGAPMEA have asked the government to come out with a vision that envisaged long term policy support. This included cash incentives and equal corporate tax for the allied industries so that the country could enlarge its basket of direct exports.

The association has also called on the government to declare garment accessories and packaging products as the product of the year for 2019.

The interaction between the leaders of garment and accessories and packaging manufacturers and the government authorities, where these demands were placed took place at the ninth edition of Garment Accessories and Packaging Exposition (GAPEXPO-2018) in the capital city of Dhaka. The leaders came up with these issues during the course of the inaugural address at the Expo.

The four-day function which will conclude on January 27, 2018 was inaugurated by finance minister AMA Muhith of Bangladesh who happened to be the chief guest. Also present was Siddiqur Rahman, President BGMEA as a special guest. The function has been organized by BGAPMEA, at the International Convention City, Bashundhara (ICCB) at Dhaka.

According to the BGAPMEA president Abdul Kader Khan, in the course of time, Bangladesh has turned into a sourcing hub for garments products. These days, garment accessories and packaging manufacturers have also started to export directly.”

Highlighting the nature of their grievance and the country’s ailing economy Kader said, “Despite having a large contribution to the total export of the country, we are deprived of cash incentives, while the manufacturers have to pay 35% corporate tax even though the RMG exporters pay only 12%.”

Kader urged the government to provide cash incentives and slash down the rate of corporate taxation, saying, “If the government provides equal facilities and policy support, we will be able to contribute $12 billion to export earnings by 2021.” Currently, the industry is well able to meet over 95% of local demand besides exporting to other countries.

There was an Y-o-Y improvement on export earnings from garments, accessories and packaging when contrasting 2017 with 2016 for Bangladesh. In the previous fiscal year, the earnings totaled USD 6.7 billion. This was a 9.47% improvement for Y-on-Y. Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy termed accessories and packaging goods as the heart of the apparel industry.

Subsequently, the question of implementation of already granted permissions was also raised as the Bangladesh government has granted Utilization permission (UP) to the BGAPMEA. “If it is implemented and the sub sector gets policy support, the capacity of the sector will increase manifold and it will help the manufacturers to export more directly,” emphasized Salam.

The finance minister who also spoke at the inaugural session traced the history of the garment export business stating, “When the sector began business, it was dependent on imports. Currently however, the sector produces 50% to 60% and the credit is retained within the people in the sector. It’s a healthy sign that manufacturers create markets and export.”

The minister also responded to the call from the business sector and stated that the government has created a business friendly environment and is ready to provide all the required support.

The gala event has attracted representations from 278 companies hailing form 17 countries including Bangladesh India, Sri Lanka, China, Taiwan, Malaysia, Vietnam, Singapore, Hong Kong, Thailand, Japan, South Korea, Germany, Italy, France, USA and Turkey. On display are the garments accessories and packaging items with machinery, and all kinds of garments machinery with boiler and spare parts.