- World textiles and clothing industry was worth USD 527 billion in 2009 while Bangladesh exported USD 12.75 billion making up 79.33% of its total exports.
- Bangladesh Export Promotion Bureau forecasts more than USD 16 billion export in this fiscal year and USD 25 billion by 2013.
- The revised Rules of Origin (RoO) adopted by the European Commission, effective since 1 January 2011, allows Bangladesh to continue enjoying GSP advantages even for the imported primary materials like fabrics.
- Germany imported more than 11% of total textiles and clothing export from Bangladesh for the period of April – September 2010 and is the largest importer of woven items.
- Knitwear is the leading export-earner at USD 6.41 billion, followed by woven wear of USD 5.92 billion and textiles and other products of USD 0.42 billion.
- It is estimated that the RMG sector contributes 11-15% to GDP of Bangladesh adding 38% of value to the industrial sector.
- Around 4.5 million workers are employed in the textiles and clothing industry of which 80% are women.
- The success of the export-oriented clothing industry can be attributed to four key factors: (a) quality, (b) price, (c) lead-time and (d) reliability.
- Key investment opportunities in the sector lie in the Primary Textile Sector to strengthen backward linkages in the garment accessory industry and in exporting Bangladeshi branded apparel.
- Investments in textile and fashion design training institutes and diversification into manufacture of niche clothing items would provide positive impacts on the sector.
New EU GSP Rules of Origin for Bangladesh and other LDCs
The European Commission Regulation (EU) No. 1063/2010 of 18 November 2010 has been published in the Official Journal of the European Union amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No. 2913/92 establishing the Community Customs Code. Subsequently the European Union (EU) has notified about the changes in the Rules of Origin (RoO) from certain LDC countries which will simplify the procedure of granting the GSP benefits to the exporting countries and will also benefit other countries involved in supplying raw materials to the country exporting the final product. Thus ensure a better integration of developing countries into the world economy, in particular through improved access to the markets of developed countries. The EU provides three types of GSP benefits to the exporting countries : The standard GSP provides with preferences to 176 Developing Countries and Territories on over 6,200 tariff lines; The GSP+ is the special incentive arrangement for sustainable development and good governance, which offers additional tariff reductions to support vulnerable developing countries (currently 16) in their ratification and implementation of 27 international conventions in these areas; Everything But Arms (EBA) arrangement provides with Duty-Free, Quota-Free access for all products for the 49 […]
NO extra costs applicable for issuance of GSP form A
Since 1st January 2011 GSP Certificate of Origin Form A may be issued for imported primary materials in a single-stage processing in the least developed countries, according to the new EU GSP rules. In this case also fabrics from third countries may be used to produce ready-made-garments in Bangladesh and enjoy EU GSP. The concerned officer at the relevant authority in Bangladesh told us that “NO extra cost is involved except the official fees of BDT 300 as earlier”.
EU vs US Market Access for Bangladesh
The revised Rules of Origin (RoO) adopted by the European Commission, effective since 1 January 2011, allows Bangladesh to continue enjoying EU’s Generalised System of Preferences or GSP advantages even for the imported primary materials like fabrics. According to the new rules at least one production process must be completed in Bangladesh to be accepted in the EU as product of Bangladesh. These rules apply not only to the textile products but also for any product but arms for export to the EU market. In contrast to the EU, the USA does not provide duty-free access for Bangladesh although they enjoy most influence on Bangladesh, almost in every matter. Most recently the USA is using its power to pressurise Bangladesh threatening “an effect on bilateral relations” in matters such as who should remain chief of the Grameen Bank even when the case is pending at the highest court of Bangladesh. Mr. Gowher Rizvi, international affairs adviser to the prime minister of Bangladesh made some unusual but clear comments at a luncheon meeting on 22nd March 2011 while the President of American Chamber of Commerce in Bangladesh threatened US-Bangladesh ‘tension’ (about the same matter) to hurt trade. Mr. Gowher Rizvi said that there were some pending […]
Structure of the Textiles & Clothing Industry in Bangladesh
The textiles and clothing industry is segmented into the Textiles Sector (locally known as Primary Textiles Sector or PTS) and the export oriented clothing or Ready Made Garments (RMG) Sector. The textiles sector spans everything from the conversion of raw cotton to yarn through spinning yarn to weaving gray fabrics as well as finishing, dyeing and printing of gray fabrics. The final manufacturing stage of apparels subsector is called the clothing or Ready Made Garments (RMG) sector. The textiles sector or PTS is the backbone of the clothing or RMG sector because it provides the backward linkage for both the knit and woven sectors. Textile mills setup in the 1990s and later have the latest equipment and machinery and are thus able to provide top-quality yarn and fabrics. The textile mills produce the inputs needed by the RMG sector saving substantial costs on fabrics and logistics for imported fabrics. The domestically produced inputs hence play a significant role in reducing lead time and costs. The four key competitive advantages of the RMG sector in Bangladesh are considered as (a) quality, (b) price, (c) lead-time and (d) reliability. More: RMG Sector of Bangladesh – Emerging from Shadows into the Sunlight The […]