Exporters of Tailor Made Garments and Stocklots

India increases quota for duty free imports of Bangladesh garments from two million to ten million

India’s Commerce and Industry Minister, Anand Sharma, whilst leading a strong delegation from the Federation of Indians Chambers and Commerce & Industry, Ficci, announced an increase in duty free import quota of garments from Bangladesh from two million pieces to ten million pieces.

He added that countervailing duty on jute has also been removed. Countervailing duties (CVDs) are import duties under the WTO rules levied to protect domestic industries and to neutralize the negative affects of subsidies.

The increase of quotas and removal of countervailing duty on jute should help Bangladesh to reduce the trade deficit with India. The quota is expected to be distributed on a 70:30 basis between affiliated members of the Bangladesh Garment Manufacturers and Exporters Association, BGMEA, and the Bangladesh Knitwear Manufacturers and Exporters Association, BKMEA, respectively.

Previously the trade facility offered by India under the Safta agreement, which came into effect in July, 2006, allowed 8 million pieces of garments. However the quota could only be fulfilled last year as many businessmen were reluctant to export under the agreement because additional duties and taxes were payable. Later the Indian government relaxed some rules and removed some tariffs and other charges after Prime Minister Sheikh Hasina visited India in January last year.

Despite difficulties caused by previous barriers, the Indian Minister expressed hope that the new engagement with Bangladesh will bring rewards for both countries including job generation and overall prosperity.

The minister also said that the Indian government is increasing border infrastructure in order to boost bilateral trade presently valued at US$3.5 billion and added that both sides have agreed to construct land custom stations and check points and to review border infrastructure on a regular basis, to enhance trade. In this regard, work is about to commence on Petropol and Agartala borders which should be ready by next year and that trade haats (informal markets) in Meghalaya should be ready by June.

Finally the minister pointed out that Indian Industry such as Airtel, Sun Phrama, Asian Paints, Marico and Tatas have all been investing in Bangladesh and that a US$3.5 billion dollar investment in pipelines is already underway.

Also the Indian government has offered assistance to upgrade the Bangladesh Standards and Testing Instituion (BSTI).

Besides these, an official added that a 250 Mega Watts of power will be supplied by Indian distribution companies to lessen the shortfall of 1500 mega watts to the country.

Meanwhile Bangladesh Commerce Minister Muhammad Faruk Khan said that exports to India has increased by 16% and was hoping for an increase of duty free products from the present 54  to 61.


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