Bangladesh: Exports to India hit 4yr low, China boom

Dhaka, July 14, 2014 (New Age): Export earnings from India hit four-year low at $456.63 million in the just concluded financial year 2013-14 while the exports to China skyrocketed by 62.85 per cent in the fiscal year. Experts and exporters said that the export to India witnessed a decreasing trend due to non-tariff barriers and devaluation of the currency of the country. On the other hand the export to China is booming as the country is moving towards high-end products from basic products and extended zero-tariff excess to Bangladeshi products. According to the Export Promotion Bureau data, the export earnings from India posted a 19.03-per cent negative growth from $563.96 million of the FY 2012-2013. The export earnings from China increased to $746.19 million in the FY14 from $458.18 million reading on the incredible growth of exports of RMG and leather and leather products, the EPB data showed. Ahsan H Mansur, executive director of the Policy Research Institute, told New Age that the export to India had dropped due to the devaluation of the rupee against the US dollar. On the other hand, the exporters were not considering India as the prime export destination, he said. Mansur said that the export earnings from China were increasing gradually as garment products, the main export products of Bangladesh, penetrated in the market. The duty- and quota-free entry facility to the Chinese market was also an opportunity for Bangladesh, he added. The exports of readymade garment products to India increased to $96.25 million in the FY14 against $75.21 million in the FY13 but the export earnings from non-RMG products posted negative growth. Exports of jute and jute-related products decreased to $80.70 million in the FY14 from $133.85 million in the FY13 while exports of fruits and related items fell to $60.71 million from $67.53 million and fish to $4.01 million from $13.78 million. The export of RMG products to China grew by around 73 per cent to $241.37 million in the FY14 from $139.14 million in the FY13. Export earnings from leather and leather products grew by 251.40 per cent to $227.85 million in the FY14 from $64.84 million in the FY13. Exports of jute and jute products to China increased to $103.49 million in the FY14 from $88.37 million in the FY13. Nazneen Ahmed, senior research fellow of Bangladesh Institute of Development Studies, said that non-tariff barrier was the main reason for the export slowdown to India. ‘India removed tariff barriers for the Bangladeshi products including garments but non-tariff barriers still remain which discouraged exporters,’ she said. Nazneen said that China was decreasing the production of low-end products due to increasing labour cost and importing the items from other countries including Bangladesh as the country (China) is moving towards hi-tech industry. The export of basic garments and other products increased to China due to competitiveness of Bangladeshi products, she said. ‘There is a huge potential in the China market for the Bangladeshi garment products as the country [China] is shifting its production to hi-end products,’ Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association, told New Age. He said that the garment exporters were giving special emphasis on the market size of the country which was $338 billion. Azim also said that the exporters did not feel comfortable in exporting to India due to non-tariff barriers. The export earnings from India were $563.96 million in the FY 2012-2013, $498.4 million in the FY 2011-12, $512.50 million in the FY 2010-2011 and $304.62 million in the FY 2009-2010, according to the EPB data. Exports to China had stood at $178.63 million in the fiscal year 2009-10 and those shot up to $319.66 million in the FY 2010-11 as China extended duty-free access. In the FY 2011-12, the exports to China stood at $401.94 million and in the FY 2012-13, the exports stood at $458.11 million, according to the EPB data.