Earnings from the US market suffer setback
After a setback in last financial year the export earnings from India rebounded in the first two months of the current financial year while the export earnings from China maintained a robust growth. The export earnings from the US market, however, suffered a setback registering a negative growth in the first two months of the FY 2014-15. The export earnings from India in the July-August period of the FY15 increased by 39.81 per cent to $77.40 million from $55.36 million in the same period of the FY 2013-14, according to the Export promotion Bureau data.
The export earnings from China also grew by 46.79 per cent to $136.52 million in the first two months of the FY15 from $93 million in the FY14.
The growth of the export earnings from the US market continued to fall and the earnings in the July-August period of FY15 declined by 8.70 per cent compared with that of the same period of FY14.
Experts and exporters said that duty-free market access facility and appreciation of Indian currency against dollar were the two major reasons for the rebound in the export earnings from India.
They said that the export to the US market decreased as buyers shifted orders from the factories housed in the shared buildings due to compliance issue and at the same time other competitive countries like Vietnam and Pakistan gained their abilities to grab the market.
Exporters said that there was a huge business potential in the Indian market and to avail the opportunity government to government initiative was needed to remove the prevailing non-tariff barriers.
They also said that the growth of export earnings from the China market was not incredible as the country was moving towards high end products by meeting the need of basic products through imports.
The readymade garment export to the India in the first two months of the current financial year grew by 28.70 per cent to $25.02 million from $19.44 million in the same period of the FY 2013-14.
The export earnings from India in the financial year 2013-14, however, accounted for $456.63 million which is 19.03 per cent lower than the earnings of $563.96 in the FY 2012-13, the EPB data showed.
The imports from India surged to over $5 billion in the FY14 from $4.77 billion in the FY13.
‘It is a good sign that the export earnings from the Indian market in the first two months of current financial year rebounded, overcoming the setback occurred in the last financial year,’ Mustafizur Rahman, executive director of the Centre for Policy Dialogue, told New Age on Thursday.
The export earnings from the Indian market rebounded as exporters concentrated on the market taking the advantage of zero tariff facilities and strong Indian currency, he said.
‘The import market of India is huge and to grab the opportunity we will have to strengthen the standard certification and to enhance trade facilitation,’ Mustafiz said.
He said that not only India, China was also the important market for Bangladesh as there was a huge demand for low end garment products, leather and footwear.
‘If we can take the potential of India and China, the markets can be suitable for diversifying our products and exports,’ Mustafiz said.
Bangladesh Garment Manufacturers and Exporters Association vice-president Shahidullah Azim said that mainly appreciation of the rupee against the US dollar was the reason for the increase in the export earnings from India.
China can be the big market place for Bangladeshi RMG products and the country is interested to place more order but we cannot seize the opportunity due to lack of efficient infrastructure, he said.
During the July-August period of the FY15 the exports of RMG to China grew by 58.91 per cent to $55.54 million from $34.95 million in the same period of the FY14, the EPB data showed.
According to the EPB data, the earnings from the US market in the July-August period of the FY15 fell to $892.47 million from $977.59 million in the same period of the FY14.
During the period RMG export to the US accounted for $831.11 million which is 8.80 per cent lower than $911.39 million of the same period of the FY14.
Azim said that Bangladesh lost its market share in the US due to compliance issue and lack of infrastructure.
The negative growth in the US market is the implication of the Rana Plaza building collapse as after the disaster buyers have become shaky to place order in the factories housed in shared buildings and a good number of small and medium scale factories were closed in last one year, he said.
‘We are not worried over the situation and hopeful that the export earnings growth will hit a new high after completion of the ongoing safety assessment in the factories,’ Azim said.
Mustafiz said that the export earnings from the US registered negative growth due to less than satisfactory performance of the RMG product as Vietnam, the main competitor of Bangladesh, was gaining more ground in the market.
-With New Age input
