Garment makers seek to build warehouses in India

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Bangladeshi garment makers yesterday demanded 50 acres of land in Gujarat to build warehouses to supply apparel items directly to retail shops across India.

Warehousing is necessary as Bangladesh seeks to boost its annual garment exports to the Indian market to $1 billion in three years from about $100 million now, Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association or BGMEA.

“So, we need direct marketing and warehousing will facilitate it,” Islam said after a meeting with Indian Prime Minister Narendra Modi at Sonargaon Hotel in Dhaka yesterday.

Garment makers have readied a $25 million fund to build the warehouses, according to Islam.

“India is a very big market for us. The annual retail market size of India is set to cross $40 billion with the growing middle-class consumers,” Islam said.

“It’s an opportunity for us as the Indian government has started widening connectivity by liberalising trade policy,” he said.

India has already allowed almost all globally renowned clothing retailers to operate in its market.

“If we are allowed to build warehouses in Gujarat, we will also be able to supply garment items to those retailers,” the BGMEA chief added.

Islam said they also demanded removal of India’s 12.5 percent countervailing duty (CVD) so that Bangladeshi garment makers can export more.

Although India provided duty-free and quota-free market access for all Bangladeshi goods, except 25 alcoholic and drug items, in November 2012, it levied the CVD the following year, which started hampering garment exports to India.

“I also demanded withdrawal of India’s 4 percent state level special duty on apparel exports to India,” Islam said.

Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry, who led the 11-member team at the meeting, said Bangladeshi businessmen also demanded that both Benapole and Petrapole ports remain open every day for smooth export and import activities.

On average, the two ports remain closed for three days a week, as it is a holiday in Bangladesh on Fridays, while Saturdays and Sundays are holidays in India. “We want the ports to remain open round the clock,” Ahmad told The Daily Star by phone.

“Our target is to develop the South Asian region just like the European Union. We thanked Modi for his announcement of regional connectivity initiatives through signing the trade deal,” Ahmad said. “Modi was very positive in the meeting. We want Indian investment here. We want Indian partnership in constructing the deep seaport in Bangladesh. Modi agreed to our proposals.”

In fiscal 2013-14, Bangladesh exported garment items worth $96.26 million, rising from $75.21 million in the previous fiscal year.

Bangladesh’s overall exports to India were worth $456.63 million in 2013-14, compared to $563.97 million in the previous year.

Bangladesh’s imports from India were recorded at $6.03 billion in fiscal 2013-14 and $4.78 billion in the previous year, according to data from the commerce ministry.

It is believed that India exports goods worth more than $6 billion to Bangladesh a year through informal channels.

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