Non-traditional markets show great promise for garments
Garment exports to non-traditional markets are rising at a faster rate than to the traditional markets owing to the stimulus package and duty benefits by emerging markets for Bangladesh.
In fiscal 2012-13, garment exports to non-traditional markets such as Australia, Brazil, Chile, China, India, Japan, South Korea, Mexico, Russia, South Africa, Turkey and so on rose 29 percent year-on-year to $2.98 billion, according to data from Export Promotion Bureau.
In contrast, exports to traditional markets of the US, Canada and European Union stood at $18.54 billion last fiscal year, up 10.93 percent year-on-year.
Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh, credited the higher growth to stimulus package from the government and duty benefits from emerging markets such as China, Japan and India.
In a bid to offset any significant drop in garment export figures, the government in 2009 introduced a financial package to encourage garment manufacturers to explore new destinations.
Under the scheme, the government gave 5 percent cash incentive to garment exporters in fiscal 2009-10, 4 percent in fiscal 2010-11 and 2 percent in fiscal 2011-12. The exporters are still receiving 2 percent cash incentive for exporting to the new destinations.
Subsequently, exports to the new destinations took off. Moreover, some countries have also given duty-benefits to Bangladesh during this period.
For example, the Japanese government relaxed the Rules of Origin (RoO) from April 1, 2011, which boosted exports to the country.
Similarly, India extended zero-duty benefit to all products except 25 alcoholic and drug items from November 2011. In 2011, the China government also gave duty benefits to Bangladesh on export of 4,721 products which include garment items.
And more recently, the Chilean government announced duty-free benefits for all Bangladeshi products from January next year. South Korea has also given duty-benefits to some Bangladeshi garment items.
“Besides the financial assistance, the other reasons for higher growth to emerging markets are higher prices and massive campaigns by the garment entrepreneurs,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, the garment makers' platform.
“In the last few years, we campaigned massively to some Latin American countries. This is why our export is also increasing to those countries. Our next focused market is Russia. Russia recently became the member of the WTO, so we have good opportunity to this bigger market.”
