Bangladesh Sangbad Sangstha . Dhaka
The duty free export of eight million pieces of garments to India is facing snags as Delhi has started imposing VAT and other financial levies on export consignments denying the benefit of its offer to Bangladesh under SAFTA free trade regime.
President of BGMEA, the country’s apex trade body for the garments manufacturers and exporters, Anwarul Alam Chowdhury made the disclosure on Wednesday at a press briefing at its headquarters in the city.
EPB Vice Chairman Mohammad Sahab Ullah confirmed the issue saying he has information that Indian government is levying charges on duty free apparels which together stand at 18 percent.
The issue came up when a questioner sought to know the progress achieved in export of the 8.0 million pieces of garments that India has unilaterally offered under duty free regime to Bangladesh to help shore up its sinking trade imbalance.
Chowdhury said although the export process started last year amid excitement, it hit snags halfway as Indian buyers lost interest in putting buying orders following Indian government levies of different financial charges on imports by private Indian buying houses.
He said the issue has come to BGMEA’s notice only recently as individual exporters started breaking their problems to business forum in having fresh orders and disposing existing supply orders. He said BGMEA has already informed the commerce ministry of the new development.
Asked why then the government did not raise the issue during the recent visit of Indian foreign minister Pranab Mukherjee, Chowdhury said the development has come to their notice only recently. Now he hoped the government would take up it with the Indian counterpart.
The EPB vice chairman said he is informally aware of such problems. He said the EPB, which is responsible for overseeing of 8.0 million pieces of duty free export of garments to Indian government, has so far issued GSP certificates for a bit more than 3.5 million pieces of garments.
Information suggests that so far more than 1.8 million pieces of garments have been exported to India and although GSP certificates for the remaining apparels are ready on exporters names, they are not collecting those and implementing the export orders. It may be because they have lost interest in exports.
Indian importers may have also lost interest with the levying of new duty. So they are not proceeding with new export orders and thus the fate of the 8.0 million pieces of duty free export may be dying in absence of linkage between importer and exporters.
The EPB vice chairman said the Indian government is not a direct buyer. It has offered the new duty free window to encourage private Indian buying houses to import from Bangladesh as cheaper goods.
Now if the government is adding duty to it to make it costlier, importers may not find the same goods profitable when it was so without duty. This is how a good saga is coming to a bad end, said another exporter requesting not to be named.