Business Desk :
Bangladesh could earn an additional $20 billion by exporting goods to the European Union (EU) and the United Kingdom (UK), as the full potential of the markets remained untapped, according to findings of a study.
The country fetched about $28 billion from the EU and the UK in FY22, marking a 32% export growth, of which some $26 billion came from readymade garment (RMG) exports, according to data.
The EU and the UK jointly account for 45% of the global apparel market with more than $200 billion annual import, according to the study — conducted by the Research and Policy Integration for Development (Rapid.)
Bangladesh captures about 20% of the EU’s apparel imports from the non-EU countries. The country has an opportunity to earn an additional $20 billion through exporting various goods in the EU and the UK, which may rise further, Rapid Chairman MA Razzaque said in the research paper.
Of the $20 billion, apparel export potentials worth $18 billion remain unutilized.
Explaining the opportunities, he said China is losing its share in the global market due to the rising tension with the West, emerging geo-political scenario, and long Covid-19 restriction there.
Bangladesh is now capturing a major share of the export, previously done by China.
It could further increase its share, as China is moving away from low value-added apparels to more sophisticated ones.
In 2010, Chinese share in the EU market was about 44%, which declined to about 31% in 2021, according to the findings.
On the other hand, Bangladesh’s share rose to about 20% from 9% during the period, mainly because of the duty benefit.
The BGMEA recently set a $100 billion export target by 2030, projecting a 10-11% gradual growth each year.
To achieve the target, the apparel makers are now investing in non-cotton and manmade fibre-based production, increasing capacity of backward linkage including woven fabric manufacturing, and focusing on product diversification.
Terming the target achievable, the Rapid study also said some of the challenges, including inefficiency in ports, complex customs procedures, and lack of technological upgradation, should be addressed.
Of the targeted $100 billion, about $90 billion could be earned from the EU, the UK and the US, it showed.
By 2030, the apparel market size of the EU and the UK would be more than $260 billion, and Bangladesh’s export there could reach $65 billion.
Bangladesh would get duty-free market access in the EU until 2029, while the UK has recently announced a new scheme — the Developing Countries Trading Scheme (DCTS) — that would also provide the GSP-like facilities.
In the US market, Bangladesh’s apparel export is targeted to increase to $25 billion, which was $9 billion in FY22.
China witnessed RMG export growth in the US market in 2021, but it is yet to reach the pre-pandemic level, while Bangladesh and Vietnam are capturing China’s share there.
The study also recommended attracting more foreign direct investment in backward linkage, investment in non-cotton fabric, and diversification of RMG products to grab more shares of Chinese exports.
