RMG exports to India face serious setback
FE Team | Published: March 31, 2013 00:00:00 | Updated: February 01, 2018 00:00:00
Bangladesh's clothing exports to India is facing a serious setback as about two dozens local garment factories have failed to secure payment of nearly $5.0 million from an Indian buyer Liliput Kidswear Ltd, exporters in Dhaka said, according to a report -- Bangladesh RMG Export to India Facing Setback -- posted on the website YNFX.com.
They feared they would default on bank loans and would not be able to pay workers' wages, which might trigger labour unrest in their factories only because of the non-payment by the Indian company, the report on the website of Yarns and Fabrics Exchange, based in India, said.
The report stated: "This issue, according to sources, has put a break to the tempo in RMG exports to India since many of Bangladeshi garment manufacturers have lost their confidence to export to the neighbouring India, a huge market for Bangladesh.
The Bangladesh Garments Manufacturers & Exporters Association (BGMEA) is the trade promotional body for the readymade garments (RMG) sector in Bangladesh.
"The entrepreneurs of 22 garment manufacturers, who have not received their payments from the Lilliput, will soon sit with the new committee of BGMEA to find out ways how to realise the payment," the report added while noting that if failed, they will chalk out new programme to realise the same.
The report quoted Fazlur Rahman, managing director of Gemini Garments Limited, one of the affected apparel unit, as saying, "We have made shipments after concrete deals with the Indian company. About 18 months have passed, but we are yet to receive my payments."
He further said: "We do not want to lose the Indian market for the fraudulence of any individual importer and so we sought cooperation from Indian president Pranab Mukherjee who recently visited Bangladesh. But we are totally frustrated as our last attempt also went in vain", said Rahman expressing his disappointment.
"India is a potential market for Bangladeshi readymade garments but the exporters are now not interested in doing business with Indian companies fearing that they might again be victims of incidence like of Lilliput," the report noted.
The report quoted a leading exporter in Bangladesh while stressing the need for immediate solution to the stalemate, as saying, "We were having a good trade relation with India, but the uncertainty in receiving payments from an Indian importer has created a barrier in the relationship."
The report runs as follows: "The business entrepreneur also a former BGMEA leader, however, said that both the countries must sort out the existing problem and build up good business relations.
'Despite huge potential Bangladesh export to India remains almost static over the last few years because of mistrust, big brotherly attitude from the Indian side and diplomatic failure to resolve the existing problems including various tariff and non-tariff barriers.
'During the first eight-month of current fiscal (2012-13), Bangladesh exported goods worth about US$ 383.618 million to India as against $339.95 million during the same period in last fiscal.
'In last fiscal (2011-12), Bangladesh exported goods worth about $ 498.419 million to India as against $ 512.51 in the previous fiscal (2010-11) registering a negative growth of 2.75 per cent per cent.
'Of the total, the share of apparel export was only $ 55.02 million in last fiscal (2011-12). The amount is likely to decrease further in current fiscal.
'Lilliput Kidswear Ltd, India's largest kids wear retailer, missed several deadlines of payment and currently stopped communicating with the exporters.
'According to industry sources, Bangladeshi companies were supposed to get their payment in October-November 2011 but Lilliput was delaying the payment and made a commitment to pay it by June 30, 2012. In July 10, 2012 a meeting between Bangladesh and India was held in New Delhi under the chairmanship of India Murthy, director of the Indian commerce department.
'At the meeting Sanjeev Narula, chief managing director of Lilliput Kidswear Ltd, signed an agreement with the Bangladesh Garments Manu-facturers and Exporters Association (BGMEA) to pay the outstanding bills by January 2013 in several phases.
'But the company also violated the agreement and yet to pay any dues to the exporters.
'The BGMEA, sources said, is also trying seriously and has discussed the matter with different concerned agencies both in India and Bangladesh for solving the issue, but failed to resolve the crisis.
"The 22 exporters are Mazkan Jeans Ltd, Vertex Apparels Ltd, Barat Sweater Ltd, A Plus Sweater, Sinha Fabrics Ltd, Anupam Fashions Ltd, Panshi Knit Pvt Ltd, Annesha Style Ltd, Hypoid Lingeries Ltd, Defoin Design Ltd, New Generation Fashion Ltd, Uttara Woven and Knit Ltd, DNS Sweaters Ltd, Gemini Garments Ltd, Ayesha Enterprise, IP Jack Knitting, T-Mart Computerised Sweater, Hallmark Designwear, Apparel Concept, Kent Fashion Ltd, Alif Garments and ND Apparels," it concluded.
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