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Dhaka Tribune

‘Increased RMG exports by neighbouring countries will not affect Bangladesh’

Apparel manufacturers said that the largest trade volume in all these destinations is still exported from Bangladesh

Update : 15 Oct 2023, 10:00 AM

Increasing apparel exports by India and Pakistan to the US and European markets will not affect the export earnings of Bangladesh, apparel manufacturers said.  

Both India and Pakistan are neighbouring competitors of Bangladesh when it comes to apparel export. 

They also said that the largest trade volume in all these destinations is still exported from Bangladesh.

Moreover, the exports to Europe and the US from India and Pakistan have increased as per their own statistics, and Bangladesh has nothing to worry about.

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According to Eurostat Trade, the export of apparel products from Bangladesh recorded a growth of 18.3% year-on-year in the first seven months (January-July) of 2021 than the same time of 2020 in the European market from $7,756 million to $9,176 million. 

In the meantime, two neighbouring countries — India and Pakistan — marked a rise of 22.23% and 27.89% respectively, by exporting apparel products worth from $2,032 million to $2,483 million, and from $1,304 million to $1,661 million respectively, according to Eurostat.

The Office of Textiles and Apparel (Otexa) of the US has also published the data of sourcing of the apparel products from South Asian countries in the same timeframe.

According to the Otexa data, Bangladesh exported apparel worth $3,701 million in the first seven months of 2021, fetching a rise of 28%, from $2,891 million in the same period of 2020.

Meanwhile, India exported apparel worth $2,318 million, which was $1,742 million in 2020, and Pakistan exported worth $1,163 million, which was $688 million in 2020, securing the growth of 33.1% and 69.1% respectively, Otexa data shows.

But apparel manufacturers of Bangladesh said that it is a temporary scenario and the country should not worry about it since it is a matter of their own export statistics. 

In this regard, Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told Dhaka Tribune that Europe and the US are the main export destinations of Bangladesh. 

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“The large volume of apparel products that are exported to these two destinations from Bangladesh every year is much higher than India and Pakistan,” he added. 

He also said that the exports from India and Pakistan have increased in these destinations compared to the exports of previous years. 

“It is not related to Bangladesh's exports. They are increasing sourcing from those countries, and also increasing sourcing from Bangladesh significantly.”

Moreover, he called it a temporary issue, adding that there are a lot of purchase orders from these two destinations in Bangladesh. 

“So, I hope that our exports will increase further to the EU and the US in the next few months,” he added.

Some apparel manufacturers also said that the recent visit by BGMEA leaders to the US and some successful discussions with European buyers will further boost exports to these destinations. 

They are also hopeful that Bangladesh may attract more purchase orders from the US and the EU if the apparel diplomacy works effectively.

However, apparel makers also said that exports of India and Pakistan may have increased due to the differences in the yarn prices. 

The price of yarn in these two countries is comparatively lower than what it is in Bangladesh, they said.

According to industry insiders, the current price of cotton in the global market is around 95 cents per pound. 

Bangladesh is the second highest importer of cotton to produce 30-count yarn, the main raw materials of knitwear garment items. 

The price of per kilogram (kg) 30-count yarn in the local market is $4.10-$4.15, which is higher than most of the other apparel producing countries, they said. 

They also said that the price of yarn in India is $3.60 per kg, which is much lower than what it is in Bangladesh. 

A general manager of Savar based AKH Fashions Limited said that India and Pakistan might get the advantages due to the difference between the price of raw materials.

“But we are confident that the export of Bangladesh to the prime destinations will increase soon,” he added.

He also said they should have proper strategies to attract more buyers from the destination countries. 

“In this regard, Bangladesh needs to develop its own fashion designing studios, diversify products basket and to emphasize synthetic or man-made fibre to execute a sustainable apparel industry,” he added.

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Bangladesh is the second-largest exporter of the apparel items in the global market after China. The apparel sector earns more than 83% of the country’s export earnings. 

Bangladesh exported apparel items worth $31.45 billion in the last fiscal year. 

According to the BGMEA, there are more than 4,000 garment factories which employ nearly 4 million workers. 

The number will be higher if the backwards-linkage industries and their workers are included.

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