News Desk :
Bangladesh’s apparel shipments to non-traditional markets increased by 25.40 percent to $6.37 billion in the FY 2021-22 which was $5 billion in the FY21, mostly riding on the exports earnings from India and Japan.
The United States, Canada, and European countries are generally known as the traditional markets for garment exports.
On the other hand, Japan, India, Australia, Brazil, Mexico, Turkey, Chile, China, South Africa, and Russia are considered as new markets for garment exports.
According to Export Promotion Bureau (EPB) data, exports earnings from India posted the highest growth by 69.58 per cent to $715 million in FY22, which was $422 million in FY21. It means Bangladesh earned $293 million more in FY22 compared to the previous year.
On the other hand, garment products exports to Japan rose by 16.27 per cent to $1.09 billion, which was $945 million in the previous year.
In FY22, apparel exports to Russia declined by 1.66 per cent to $584 million, which was $594 million, while exports to the Chinese market recorded a 18 per cent negative growth to $222 million against $271 million in the previous year.
Clothing products exports to Australia grew by 11 per cent to $812 million and Korea by 36.64 per cent to $440 million.
Experts and industry people opined that cash incentives against the export to non-traditional markets played an important role, while exporters’ drive to explore new markets accelerated the growth.
“We are doing better in Indian market as profit margin is better than traditional markets. This is because of our quality products,” Tahsin Shezan, Director of Classic Group. The company exports apparel goods to Indian market.
On the other hand, there is no tariff bottleneck as the Indian government offers duty free market access. In addition, it takes less time to send goods to the neighboring country due to closer connectivity, he added.
“We are preferred to explore new export destinations as a part of market diversification. This helped us to earn more from the non-traditional markets,” said Md. Khosru Chowdhury, Managing Director of Nipa Fashion Wear Industry. The company exports to several non-traditional markets.
Non-tradition market gives extra benefits as the government offers cash incentives and they buyers are quite different than traditional, said Khosru.
It also helped to attract small buyers and small quantity work orders with different types products, he added.
“For enlarging export earnings and as a part of market diversification, we focused on exploring new markets. As a result, export earnings from new markets grew sharply,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan told the media.
The growth is because of robust export performance in India and Japan, while exports to other emerging markets like Korea, Chile, Turkey, Mexico, Malaysia, Saudi Arabia and Brazil are gradually increasing, he added.
Now, our target is to expand exports to the Middle-East markets, said Hassan.
“As the government provides a 4 per cent cash incentive against the exports to non-traditional export markets, manufacturers preferred to ship more to get incentives. As a result, the earnings from the markets,” Khondaker Golam Moazzem, Research Director at Centre for Policy Dialogue (CPD) told the media.
But for sustainability and exploring new potential markets, the government should assess the impacts and offer case-to-case basis incentives, said the economist.
On the other hand, Asian market performs well due to proximity and shorter lead time. It is high time to capture Asian and East Asian markets, he added.
In FY22, export earnings from RMG products rose sharply by 35.47 per cent to $42.61 billion, which was $31.45 billion in the previous year.
Of the $42.61 billion, knitwear products fetched $23.21 billion, up by 36.88 per cent from last fiscal year’s $19.91 billion, while woven items earned $19.39 billion, registering a 33.82 per cent growth.
Meanwhile, Bangladesh has joined the $50 billion exporters’ club in the FY 2021-22 – recording a 34.38 per cent growth to $52 billion.
