Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA) received the prime minister’s assurance of cutting freight on board (FOB) duty on the RMG capital machinery import and banks’ lending rates.
While speaking at the inauguration of Batexpo in Dhaka On Thursday, BGMEA president demanded the government reduce the FOB duty to 0.25% from 0.80% and the lending rates to a “rational level.”
The FOB cut was also sought for the capital machinery imports for the proposed Industrial Park at Bausia in Munshigangj. The park will be developed on a 531-acre of land.
Prime Minister Sheikh Hasina said her government would consider the demands and try to cut interest rates to some extent, if not possible to the extent of BGMEA’s desire.
The premier said: “We won’t be able to meet your demands but we will try to reduce FOB duty and lending rates.”
“It’s true that after the removal of the cap, the lending rates have become high. But Bangladesh Bank is working to ease the [lending] rates.”
While placing demands, BGMEA chief sought the premier’s intervention to bring down the rates to a tolerable and rational level.
He said the rate is holding back the growth in the country’s manufacturing sectors and alleged the commercial banks are charging irrationally high rates.
“The sector is passing a crucial time now. Production costs in the RMG sector have gone up while the banks’ lending rates are so high,” said Atiqul Islam.
He detailed that the RMG production costs soared by 13% while the local currency taka has been depreciated by 8.6% against dollar, reducing the sector’s competitiveness on the global market.
Besides, BGMEA chief came up with another demand to establish a separate dollar exchange rate to retain apparel export growth.
In her speech, the premier suggested the apparel manufacturers can borrow money from the government fund to build dormitories for the workers.
Further, she assured of supplying gas and power to the new factories and cited that the present government has increased generation of power remarkably.
Sheikh Hasina continued that her government has approved BGMEA University of Fashion and Technology to enhance skills in the sector and maintain international standard.
She said the present government has also set up RMG training institutes at the upazila level to create skilled manpower to meet the demand and increase export.
Sheikh Hasina said the government has amended building code and is going to introduce guideline so that “no one can construct building here and there.”
To ensure factory compliance, more inspectors have been appointed.
