Bldesh Govt weaves fresh troubles for Tirupur knitwear Cos
24 Dec '05
3 min read
The knitwear cluster of Tirupur that is witnessing an increase in cheap Chinese fabric imports, is now all set to see competition from another frontier — Bangladesh.
With the government deciding to offer duty free market access to Bangladesh under SAFTA (South Asia Free Trade Association), the doors have now been thrown wide open for the eastern neighbour.
Bangladesh, with its strong garment making capabilities and low labour costs, could pose a stiff challenge to Tirupur, the knitwear capital of the country. Dhaka has been lobbying for quota and duty free access to India for a long time, primarily to help its textile industry, a major export earner.
“Bangladesh is no doubt competitive in garments. There will be some temporary impact, but it will not be significant,” says RM Subramaniam, advisor, Tirupur Exporters' Association (TEA). Industry players, while conceding that they would face stiff competition, however, point out that Bangladesh enjoys tax benefits, favourable labour policies and export oriented incentives that is lacking in India.
Over the past few years, it has also considerably scaled up its capacities in garments by building huge factories. Besides, it also enjoys concessions as a least developed country (LDC). “We have to be prepared for more competition from neighbouring countries such as Bangladesh,” says 'Ahill' S Rathnasamy, president, Knit Cloth Manufacturers' Association.
However, the industry is game for competition and is confident of facing the challenge. “Competition is in a way good. We will also become cost conscious and increase productivity,” industry sources say.
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