Garment makers yesterday welcomed the zero-tariff benefits that India extended to 46 Bangladeshi clothing items, saying exports would rise if there were no non-tariff barriers.
The reaction came after India agreed to give the facility to 46 apparel items out of the 47 items that Bangladesh sought, marking the visit of Indian Prime Minister Manmohan Singh.
Bangladesh had been lobbying the Indian government for the last two years to get duty waiver on 61 products. Of the products, 47 were apparel items including pants, shirts, blouses, skirts, kids wear, cotton nightwear, jeans, swimwear and tracksuits.
David Hasanat, chairman of leading clothes maker Viyellatex Group, said the duty-free benefit will help boost garment exports to India, a market with a population of more than 100 crore and a growing middle class.
“But a rise in exports will depend largely on the non-tariff barriers. If there are no non-tariff barriers, our exports will rise,” he said, adding that many Bangladeshi products already enjoy a duty free facility but they cannot take advantage of it as non-tariff barriers prevail.
“We will be able to understand the full benefits at the time of implementation. However, let’s hope for the best,” said Hasanat.
He said Bangladeshi clothes are better than those of India in terms of quality.
“We are ahead of India in terms of quality. Our benchmark is better than India’s,” he said.
Hasanat was, however, less hopeful about a decline in the trade imbalance between the nations.
The third biggest economy of Asia enjoys a trade surplus with Bangladesh, and the deficit between the neighbours more than doubled to $4,057 million in 2010-11 from $1,998.58 million in fiscal 2006-07, according to official data.
“Our exports will rise. But that may not help narrow the trade gap significantly,” said the Viyellatex chief.
Salim Osman, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladeshi apparel makers will do well in the Indian market.
“I am hopeful that our clothes will be competitive in terms of both quality and prices,” said the BKMEA president.
“Our export earnings will double in the years ahead due to an opening of market opportunities in India,” said Osman.
He also said the zero duty benefit will give a boost to the hosiery industry, which employs three lakh people, by widening the market opportunities for undergarments.
Based on knitwear wastage, the hosiery sub-sector makes undergarments for the domestic market as the wastage cannot be exported to Europe.
“In India, these undergarments are expensive,” said Osman. “If we can make undergarments for 20 crore users in India, it will be a great opportunity.”
The duty-free benefit will give rise to opportunities for contract manufacturing by Indian firms as well, he said.