Source: NEW AGE
Experts and exporters noted that Bangladesh’s imports from India decreased due to the central bank adopting an import contraction policy in response to the dollar crisis.
However, they expressed concern over the decline in export earnings from the country.
‘We all know that the Bangladesh Bank has adopted an import contraction policy due to the dollar crisis, and the overall imports of the country have decreased. But it is a concerning matter that export earnings are decreasing amid the devaluation of taka,’ Centre for Policy Dialogue distinguished fellow Mustafizur Rahman told New Age on Monday.
He said that the devaluation of the taka increased the competitiveness of the export sector, but it was unusual for the exports of Bangladesh’s ready-made garments to see a fall in India.
The Indian data showed that the country’s knitwear imports from Bangladesh in FY24 fell by 34.05 per cent to $204.11 million compared with those of $309.48 million in FY23.
Woven garment imports by India from Bangladesh in FY24 also declined by 11.79 per cent to $391.42 million from $443.71 million in FY23. Moreover, available data from the Export Promotion Bureau, Bangladesh also showed that the country’s apparel exports to India in July-Match of FY24 decreased by 22.31 per cent to $645.18 million compared with those of $830.51 million in the same period of FY23.
Mustafizur Rahman said that the decline in RMG exports to the Indian market could be due to India focusing on developing its own capacity in the sector.
Although the government allowed trade settlement between Bangladesh and India in rupees in July 2023 to reduce pressure on the depleting foreign currency reserves and boost bilateral trade, Mustafizur Rahman stated that it had brought hardly any benefit.
The economist noted that it would be difficult for Bangladesh to sustain export growth in India with only RMG exports in the future.
‘The country needs to diversify its export products,’ he said.
Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, stated that global retailers had been sourcing large quantities of ready-made garments from Bangladesh for their stores in India.
However, recently, these orders have decreased.
He noted that Indian businesses have embarked on an ambitious plan to enhance their RMG production capacity with comprehensive support from the government.
The Indian government has already introduced various incentives for businesses investing in the RMG sector, including benefits on investment, interest rates, and utility bills, Hatem added.
Indian data showed that Bangladesh’s rice imports in FY24 decreased by 94.94 per cent to $15.87 million from $313.36 million in FY23.
Maize imports from India in FY24 declined by 86.82 per cent to $72.72 million from $551.76 million in FY23. Data also showed that Bangladesh’s sugar imports from India in FY24 decreased by 74.82 per cent to $118.84 million from $464.53 million in the previous financial year.
