The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has requested for duty free access to the Russian market.
“Since Bangladesh has graduated to a middle-income country, there will be certain changes in market access after 2026, we need to diversify our exports to markets where we have clear potential. For us, the topmost priority is to get preferential market access to Russia,” said its president Faruque Hassan recently in a letter to Alexander Vikentyevich Mantytskiy, Russian ambassador to Bangladesh.
“If we can get duty-free access to the Russian market, it will not only open a great opportunity for us to deepen our trade relationship, but also Russian consumers can benefit themselves by availing quality goods at competitive prices.”
The BGMEA president mentioned, “You are aware of the fact that the clothing made in Bangladesh faces high tariffs in Russia. Our products face 5% to 20% (mostly 10%) customs duty while being exported to Russia.”
Besides, there are some banking related difficulties in trade between Bangladesh and Russia, he also said, adding, “We are interested in working together to identify the barriers within the trade and commerce between two countries and resolve them.”
Talking to TBS, Habib Ullah Dawn, president at Commonwealth of Independent States-Bangladesh Chamber of Industry, said Bangladesh has already signed a memorandum of understanding with the Eurasian Economic Union, aiming to make a free trade agreement.
“If Russia gives duty-free market access, it will create a big opportunity for Bangladeshi exporters to explore markets of the Russian-led Eastern European economic union comprising Belarus, Kazakhstan, Armenia and Kyrgyzstan.”
At the same time, it will also open markets of the Commonwealth of Independent States as well, he added.
At present, CIS unites are Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.
The BGMEA president in his letter acknowledged the people of the Russian Federation’s support to Bangladesh during the War of Liberation in 1971. Russia was one of the first few countries that officially recognised Bangladesh as an independent nation.
Throughout the journey of Bangladesh toward a developing nation, Russia has always remained as a trusted development partner and a source of investment. The relations between Bangladesh and Russia have grown in depth and dimension, but the bilateral trade is yet to reach its prospects. In fact, economic ties and cooperation are crucial for enhanced bilateral relations.
Russia is one of the major development partners for Bangladesh. “Given the contribution of Russia through development initiatives and infrastructure projects, our bilateral trade remains very insignificant,” he noted.
In the fiscal year 2020-21, Bangladesh’s total export to Russia was $665.32 million and import from Russia amounted to $481.88 million. So, bilateral trade was worth only $1.1 billion.
“We have a huge opportunity to improve trade. In 2020, Russia’s apparel imports from the world stood at $6.91 billion, while the share of Bangladesh was only 11.72%, despite the fact that we are the second biggest source of apparel for Russia,” said Faruque Hassan.
“Readymade garments constitute around 90% of our total exports to Russia,” he also said.
In FY21, Bangladesh export of apparels to Russia was $593.66 million, which can be increased further, he added.
“From a neutral point of view, Russia can benefit by sourcing from Bangladesh since we produce quality apparels at a very competitive price,” Faruque Hassan added.
The BGMEA letter also mentioned, “In the past decade, we have built tremendous capacities in the textile and garment sector in the area of sustainability, especially environmental sustainability, workers’ well-being, and industrial relations.” Bangladesh is the home to the highest number of green garment factories in the world. “We have already made a huge investment in technology up-gradation, innovation, and value addition to make the industry more competitive. So Bangladesh is an ideal location for Russia to meet its fashion needs,” the BGMEA president noted.
