Bangladesh Apparel Export To India Faces Setback

Nonpayment by an Indian importer is taking toll on the country's apparel export to that market creating panic among the exporters, industry people said.

Apparel export earning, especially from the knit products, fell drastically during the first quarter of the current fiscal year (2012-13) which manufacturers and exporters mainly attributed to the nonpayment issue by the Indian importer.

They said local exporters are gradually losing their interest in doing business with the Indian importers fearing further such fraudulence by any dishonest importer though they do not want to lose such a big market.

Bangladesh's clothing exports to India is facing the setback as about two dozens local garment factories have failed to secure payment of nearly $5.0 million from an Indian buyer Liliput Kidswear Ltd.

Exporters were supposed to get their payment in October-November, 2011 but Lilliput delayed the payment and made a commitment to pay it by June 30, 2012. But the company had failed to pay by the deadline.

Earning from knit products from the Indian market stood at $4.01 million during the July-September period of 2012-13 fiscal marking a negative growth by 21.26 per cent compared to the corresponding period of last fiscal.

Knit earning stood at $5.0 million during the first three months of 2011-12 fiscal.

But woven sector fetched $17.78 million during the July-September period of current fiscal, showing a 46.89 per cent growth.

Earlier, the Indian government has given duty-free access of Bangladeshi garments to India as a gesture of better bilateral relations between the two countries.

The facility encouraged the local garment exporters to explore the Indian market with much enthusiasm. India's growing middle-class consumers are the main customers of the basic garment items from Bangladesh, industry people said.

Exporters consider the Indian market as one of the promising markets like China, Japan and Russia and are trying to explore the market as part of their market diversification, they said.

They expected earning from the Indian market will cross hundred million dollar by year- end.

"But before getting the benefit of duty free access to that market, export is facing a negative blow," an exporter said stressing on trust between the business communities of the two countries to improve the bilateral relations.

Country's garments export to India was increasing, especially after the duty-waiver, AH Aslam Sunny, second vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the FE.

"But the non-payment issue has created panic among the exporters who are now reluctant in doing business with the Indian buyers," he said blaming this incident behind the fall in knit export to that market.

Moreover, exporters are now very busy in dealing with EU and US as orders are coming with the start of new season, he explained.

Former President of BKMEA Fazlul Hoque said the Liliput issue has cut down the level of confidence among the local exporters.

Mohiuddin Faruqui, chairman of Multifabs Ltd said smuggling of locally made apparel from the border area is also responsible for the recent fall in export to Indian market.

"Rate of smuggled products is lower compared to the exported items," he explained.

"Though the earning from woven is increasing, the non-payment by the Indian Liliput has a negative impact on the exporters," Second Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md Siddiqur Rahman said.