RMG exporters to get more cash incentive

The government is going to provide more cash incentive to the ready-made garment (RMG) exporters to minimise their losses caused by the political unrest last year.
As per the decisions, the ministry of finance will provide more cash incentive at the rate of 0.25 per cent on the freight on board value of export of all types of RMG items.
"It will not be helpful for the apparel sector," Mohammad Hatem, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the FE Sunday.
He also said it should be increased to at least 1.0 per cent instead of 0.25 per cent.
Currently, exporters from small and medium industries in textiles sector are getting cash incentive of 5.0 per cent while export-oriented local textile sector is receiving identical percentage of cash incentive against the use of local yarn, according to the BKMEA vice president.
Besides, apparel exporters will get 3.0 per cent cash incentive instead of the existing 2.0 per cent for expanding their businesses to new markets and exporting new products to countries other than the United States, Canada and the European Union.
Such cash incentives will be effective from January 1 this year to June 30, 2014, according to the decisions.
An export-oriented industry will be eligible for getting maximum 11 per cent cash incentive instead of 13 per cent, Mr. Hatem explained.
"We're now working to issue a circular in this connection," a senior official of the Bangladesh Bank (BB) told the FE without elaborating.
The apparel sector, which accounts for about 80 per cent of the country's total export, has been under tremendous pressure since October following frequent spells of blockade and shutdown, enforced by the main opposition parties.