B Mirror Report

Indian ban on import readymade garment through land ports posses serious threat to export in the coming days

Bangladesh earned around US$400 million only by exporting readymade garments last year.

Delay in transit, higher logistic costs would force Indian retailers outsource from other destinations, sources said.

India’s retaliation follows a series of restrictions imposed by Bangladesh, including a ban on Indian yarn imports through five major land ports, tighter curbs on rice shipments, and import bans on dozens of Indian goods, including paper, tobacco, fish and powdered milk.

“While it takes only two-three days for apparel produced in Bangladesh to move through land borders, now the transit time is going to be longer, depending on how long it takes for ships to sail to Kolkata and Nhava Sheva (Mumbai), the two designated ports, and clear customs before taking the land route to reach Indian warehouses.” Asif Mahmud an exporter told Business Mirror Sunday.

“The decision can hit Bangladesh apparel exports to India in multiple ways, particularly when a substantial proportion of apparel import into India is through land ports, 76% from Petrapole land port alone,” said Mithileshwar Thakur, secretary general of Apparel Export Promotion Council, in an Indian media.

Besides, several Indian companies had set up units across the border to take advantage of the lower cost of production, including lower wages and subsidised power, and the tariff advantage that Bangladesh enjoys due to its status as a least developed country (LDC).

For Indian retailers, as well as global chains operating in the country, switching suppliers is not an easy decision, given the massive cost advantage that Bangladesh enjoys. Besides, it produces at a scale which few Indian manufacturers have and have refused to add capacity despite wide-spread assessment that the political uncertainty will hurt Bangladesh’s industrial mainstay, readymade garments.

Bangladeshi manufacturers request both the government to ease doing business and withdraw the restrictions.