Indian cabinet endorses duty-free access of Bangladeshi RMG
Saturday, 15 March 2008
FE Report
New Delhi has finally given its approval on the duty-free access of eight million pieces of Bangladeshi garments to Indian market a year without any sourcing condition.
The Indian cabinet in a meeting Thursday endorsed the deal that it signed with Bangladesh in September last, said a report received in Dhaka Friday.
Under the new dispensation, exporters from Bangladesh will be allowed to export without restrictions on raw material sourcing.
Similarly, the Indian government gave its approval to Sri Lanka for allowing duty free access to the Indian market up to six million pieces of garments. For an additional two million pieces, exporters will have to pay concessional duties.
Earlier, the Bangladesh government issued a gazette notification stipulating the modalities for export of eight million pieces of readymade garments to India.
With the publication of the gazette notification, Bangladesh from its part completed all formalities to export readymade garments (RMG) to India
India signed a deal with Bangladesh in September last year for importing 8.0 million pieces of RMG in one calendar year offering zero-tariff access facility that aimed at reducing the trade gap between the two countries.
The export of eight million pieces of RMG to India is expected to help Bangladesh fetch around US$40 million yearly.
The deal was signed under the purview of the South Asian Free Trade Area (SAFTA) of the South Asian Association for Regional Cooperation (SAARC).
In line with the gazette notification, the Export Promotion Bureau (EPB) of Bangladesh will issue Tariff Rate Quota Certificate and Certificate of Origin while the Regional Office of Textile of India will monitor the same.
Of total eight million pieces of RMG, affiliated members of BGMEA will get 70 per cent share while affiliated members of Bangladesh Knitwear Manufacturers and Exporters Association will get the rest 30 per cent share.
In allocating quota, it will be on first come first serve basis, an EPB official said referring to the gazette notification.
He said an apparel unit owner will get allocation for supplying highest 0.2 million pieces of RMG in a year just after submission of required documents including 'confirmed irrevocable letter of credit'.
An exporter will require supplying RMG within three months from the date of issuance of allocation, he said adding the allocated quota will be non-transferable.
A six-member committee, headed by a director general of EPB, has been formed to monitor the entire functioning of the RMG export to India.
RMG export to India is expected to correct, to some extent, the trade imbalance of Bangladesh with India.
India exported products worth over $1.99 billion to Bangladesh in fiscal 2006-07 while Bangladesh's exports to India was estimated at about $289.42 million during the period.
New Delhi has finally given its approval on the duty-free access of eight million pieces of Bangladeshi garments to Indian market a year without any sourcing condition.
The Indian cabinet in a meeting Thursday endorsed the deal that it signed with Bangladesh in September last, said a report received in Dhaka Friday.
Under the new dispensation, exporters from Bangladesh will be allowed to export without restrictions on raw material sourcing.
Similarly, the Indian government gave its approval to Sri Lanka for allowing duty free access to the Indian market up to six million pieces of garments. For an additional two million pieces, exporters will have to pay concessional duties.
Earlier, the Bangladesh government issued a gazette notification stipulating the modalities for export of eight million pieces of readymade garments to India.
With the publication of the gazette notification, Bangladesh from its part completed all formalities to export readymade garments (RMG) to India
India signed a deal with Bangladesh in September last year for importing 8.0 million pieces of RMG in one calendar year offering zero-tariff access facility that aimed at reducing the trade gap between the two countries.
The export of eight million pieces of RMG to India is expected to help Bangladesh fetch around US$40 million yearly.
The deal was signed under the purview of the South Asian Free Trade Area (SAFTA) of the South Asian Association for Regional Cooperation (SAARC).
In line with the gazette notification, the Export Promotion Bureau (EPB) of Bangladesh will issue Tariff Rate Quota Certificate and Certificate of Origin while the Regional Office of Textile of India will monitor the same.
Of total eight million pieces of RMG, affiliated members of BGMEA will get 70 per cent share while affiliated members of Bangladesh Knitwear Manufacturers and Exporters Association will get the rest 30 per cent share.
In allocating quota, it will be on first come first serve basis, an EPB official said referring to the gazette notification.
He said an apparel unit owner will get allocation for supplying highest 0.2 million pieces of RMG in a year just after submission of required documents including 'confirmed irrevocable letter of credit'.
An exporter will require supplying RMG within three months from the date of issuance of allocation, he said adding the allocated quota will be non-transferable.
A six-member committee, headed by a director general of EPB, has been formed to monitor the entire functioning of the RMG export to India.
RMG export to India is expected to correct, to some extent, the trade imbalance of Bangladesh with India.
India exported products worth over $1.99 billion to Bangladesh in fiscal 2006-07 while Bangladesh's exports to India was estimated at about $289.42 million during the period.