Garment exports to non-traditional markets posted a robust growth of 27.02 percent during the first nine months of the current fiscal year (2018-19), thanks to preferential trade benefit and fiscal incentives.
Insiders told the Daily Sun that Bangladeshi apparel exporters have succeeded to enter China, which is the largest apparel exporter worldwide.China was also turning into a major export destination for Bangladesh. RMG exports to China also increased by 43.68 percent to $386.48 million during the 9-month period as against $268.98 during the same period in last fiscal. The Chinese government also allowed duty-free access to over 5,000 Bangladeshi products, most of which are garment items.
According to Export Promotion Bureau (EPB), apparel shipments to new export destinations fetched US$ 4.39 billion during the July-March period of current fiscal year as against $3.45 billion during the same period in the last fiscal year.
In the last fiscal (2017-18), the new export markets, also called non-traditional markets, contributed $4.76 billion or 15.26 percent to the total apparel exports of $30.61 billion.
In 2008, readymade garment (RMG) exports to the emerging markets stood at only $800 million. But RMG exports to non-traditional markets has started growing since 2010-11 when the government announced a 5 percent cash incentive as a stimulus package to offset fallouts of financial recessions that affected the global economy in 2007 and 2008.
Later the rate was reduced gradually to 2 percent. However, the government has recently raised the cash incentives to 4 percent, for markets other than the US, Canada, and the European Union in an effort to diversify the export destinations.
The stimulus package, industry insiders told the Daily Sun, has encouraged the apparel manufacturers to concentrate more on market diversification and exploring new markets. Most of the new markets also have duty-free access facilities for Bangladeshi exporters that prompted more shipments to the emerging markets.Apart from the traditional US, European Union and Canadian markets, Bangladesh considers all other countries as non-traditional markets. India, China, Russia, Japan, South Africa, Turkey, Brazil, Chile, Mexico, South Korea, Malaysia, Australia, and New Zealand are among the major non-traditional markets for the garment sector.
Riding on the relaxed rules of origin, garment export to India grew 96.50 percent to $401.15 million during the July-March period as against $204.14 million during the same period in last fiscal. India announced duty- and quota-free access to all tariff lines, except tobacco and alcohol, for Bangladeshi goods.
Exports to Chile also increased by 52.44 percent to 81.72 million in the first nine months as against $53.61 million during the same period in last fiscal.
Among the new markets, Japan imported the highest amount of Bangladesh apparels worth about $ 862.26 million during the 9-month period and is expected to exceed to $ 1 billion. Japan also extends duty-free trade privilege to the garments imported from least developed countries to reduce over-dependence on China.
Similarly exports to Australia, Russia, Korea are growing at a faster rate and are also turning into major export destinations for Bangladesh
Last fiscal year, Bangladesh exported garment items worth $30.61 billion, registering an 8.76 percent growth whereas in the first nine months of current fiscal exports from this sector grew by 13.65 percent year-on-year to reach $25.951billion.
Analysing the shipment trend, apparel manufacturers hoped that the work order for domestic garment units will continue to rise. They are expecting that the positive trend will continue for years ahead as they are working hard to diversify their export products and markets.