Commerce Minister Tofail Ahmed announced this decision addressing a press conference on Wednesday about export targets for the current fiscal year
The government has decided to raise cash incentives for the ready made garment exporters to 4% from 3%, for markets other than the US, Canada, and the European Union for financial year 2018-19. This, in an effort to diversify export destinations.
Commerce Minister Tofail Ahmed announced this decision addressing a press conference on Wedneday about export targets for the current fiscal year .
The decision came from a meeting presided over by Finance Minister AMA Muhith.
The Commerce Ministry recommended the incentive to the Finance Ministry based on a request from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
“Simply increasing production cannot increase export earnings. You need markets to export to. That is why the government has taken this decision to help explore new markets,” Tofail Ahmed said.
According to Export Promotion Bureau (EPB) data, new export markets, also called non-traditional markets, contributed $4.76 billion or 15.26% to total apparel exports of $30.61 billion in the last fiscal year.
The European Union (EU) contributed $19.62 billion or 64.12%, the US market, $5.35 billion or 17.48%, and Canada $963.15 million, or 3.15% in the same period.
“Japan, China, and India are very potential markets for Bangladesh. And the incentives will increase our exports to non-traditional markets,” said BGMEA President, Md Siddiqur Rahman.
In financial year 2017-18, Bangladesh earned $4.67 billion exporting apparel products to non-traditional markets, which is 9.92% higher than the $4.24 billion in FY17.
As a new market, Japan is showing a lot of potential for Bangladeshi apparel goods. In the last fiscal, RMG exports to Japan saw a 13.73% incree to $846.73 million, compared to the previous year’s earnings of $744.48 million.
In FY18 Bangladesh’s RMG exports to India rose to $279.19 million, up by 115% compared to $129.81 million in FY17.
Non-traditional export markets for the Bangladesh garment sector include China, Russia, Japan, India, South Africa, Australia, Turkey, Brazil, Chile, Mexico, South Korea, Malaysia, and New Zealand.