The stock of unsold yarn and fabrics is mounting in Bangladesh due to large scale imports from other competing nations. This is adversely affecting the Bangladesh's primary textile industry, entrepreneurs have claimed.
According to them, the textile sector has started facing problems since January 1, 2011, when the European Union relaxed its Rules of Origin (RoO) under the Generalised System of Preferences (GSP) for the least developed countries (LDCs).
As Bangladesh belongs to the LDCs group, under the relaxed rules, garment exporters in the country can export items at zero-duty to the EU even if these items are produced using imported fabrics. Hence, the garment producers prefer to import fabrics from competing countries like China, where it is available at a lower cost.
Earlier, the local producers enjoyed the duty-free export under the GSP facility only if the goods were produced from domestic fabrics.
Bangladesh Textile Mills Association's (BTMA) President, Jahangir Alamin has sought the Government's supportive policy assistance to protect the country's primary textile industry.
He raised this demand during a discussion while presenting a keynote paper on “Problems and prospects of textile sector: Bangladesh perspective” at the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
Industry sources estimate that around 200,000 tons of yarn costing Tk 80 billion is presently lying unsold.
The first quarter of the current year saw woven fabric imports rising by 88.34 percent, while knitwear fabric imports jumped 32.35 percent over corresponding period last year.
Editor's note-The EU had relaxed its Rules of Origin (RoO) with an intention to help the LDCs to increase their export to the EU. However, this has come at a cost to the local textile industry.
Fibre2fashion News Desk - India
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