Exports to Saarland countries reach new heights

Bangladesh’s exports to South Asian countries hit a new high in the last fiscal year 2021-22 after growing steadily over the past three years, according to the Export Promotion Bureau (EPB).

India’s zero-duty advantage for most Bangladeshi items has contributed to the growth, particularly in the last fiscal year, when overall exports to eight countries in the region increased by 53% year-on-year to reach $2.28 billion.

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Demand for Bangladeshi-made garments has increased in Indian and Nepalese markets thanks to the expansion of their middle-income population.

Additionally, supply is increasing from overseas retailers and brands like Walmart for Indian markets and from neighboring country’s domestic retailers and brands such as Reliance and Aditya Birla, the exporters said.

India alone accounted for $1.99 billion or 87% of the South Asian Association for Regional Cooperation’s (Saarc) total export earnings in the 2021-22 financial year, the authorities showed. EPB data.

Delhi provided zero-duty access to Dhaka in 2011 for all products except 25 alcoholic items and beverages.

“It is encouraging that our exports are increasing in the Saarland region. We have long expected our trade in the region to grow,” said Asif Ibrahim, vice president of Newage Group, a garment exporter.

Asian countries such as India, Japan and China are Bangladesh’s next target markets as the country is expected to lose its preferential market access in 2026 after graduating from the group of least developed countries, he said. declared.

Previously, the country’s exports to the region were mostly limited to formal woven shirts.

Today, apparel manufacturers ship causal underwear, denims, and knitwear separately from other consumer goods.

With the buoyant export growth to the region, the Saarc region’s share of Bangladesh’s total exports of $52 billion rose by one percentage point to 4 percent, the EPB said.

Nearly three-quarters of Bangladesh’s exports go to the European Union and North America, particularly the United States.

From basic shirts to polo shirts, casual and formal dresses are the main export items to Saarland countries.

Ibrahim believes jackets are going to be the next major export to Nepal due to the relatively colder weather and long winter season in the Himalayan nation.

Deliveries to Nepal and Pakistan were also encouraging. Bangladesh exported goods worth more than $105 million each to Nepal and Pakistan in FY22.

“We are getting a lot of responses from our Indian customers as we enjoy the benefit of zero duty in the country,” said Sharif Zahir, managing director of Ananta Group, another garment exporter.

“Exports to the Indian market are really encouraging for Bangladesh,” he said.

Exports from Bangladesh to India can potentially increase by 300%, he added.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said earlier that the Saarc region accounts for less than 2% of Bangladesh’s overall exports.

“We have seen that there has been progress in exports over the past two years. This is very encouraging. Our exporters have started to realize that they will need to diversify their markets,” he said.

“This shows the success of Bangladeshi exporters in diversifying markets, but they still need to diversify their products,” he said.

He said apparel dominates exports to the Saarland region as well as other destinations for its global fame, which has also shielded apparel products from entry challenges.

“There is an opportunity for Bangladesh to increase exports of other products to India,” said Raihan, also an economics professor at the University of Dhaka.

He said improving the quality of products through capacity building not only of exporters but also of the Bangladesh Standards and Testing Institute in testing and certification is necessary to boost exports.

In addition, improved port facilities and connectivity will reduce trade costs and thus facilitate shipments, he said.

“There have been improvements on the Indian side as the country has developed a system of integrated border checkpoints. But there are deficits on the Bangladesh side,” he said.

South Asia is the least integrated region in the world and despite being one of the most populous regions, intra-regional trade accounts for less than 5% of its total trade, according to a World Bank study .

Border challenges mean it is about 20% cheaper for an Indian company to trade with Brazil than with a neighboring South Asian country, he said.

Trade has been constrained by several factors, such as inadequate roads, sea and air transport, protective tariffs, real and perceived non-tariff barriers, restrictions on investments and a wide deficit of confidence across the region, he said. he added.

Inter-regional trade represents 35% in East Asia and 60% in Europe.