Experts and exporters said that Bangladesh would be the largest apparel exporter in the European Union within a few years as the export growth of the country was more than that of its major competitor China in the economic bloc. They said that the EU was diversifying its sourcing and it created a possibility for Bangladesh to gain more market share in the 27-nation economic alliance. Experts said that Bangladesh was grabbing a significant share of apparel export orders which were being shifted from China. Bangladesh would have to strengthen its capacity in managing orders for non-cotton garments to sustain the ongoing robust growth in the European Union, experts and exporters said. According to the European Union’s statistics office Eurostat, Bangladesh’s apparel exports to the EU in January-August period of 2022 grew by 62.18 per cent to 14.35 billion euro from 8.85 billion euro in the same period of 2021. The data showed that readymade garment export of China to the EU in the first eight months of 2022 increased by 40.52 per cent to $17.64 billion euro from 12.46 billion euro in the same period of 2021. ‘Bangladesh has already secured the first position in exporting denim in the EU and hopefully the total apparel export to the market would exceed China within a few years,’ Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan told New Age on Saturday. He said that the BGMEA was working to strengthen Bangladesh RMG sector through product and market diversification. ‘We are working to strengthen our non-cotton base with the aim of diversifying our products beyond five basic items (shirts, trousers, jackets, T-shirts and sweaters),’ the BGMEA president said.
Buyers from both the EU and the United States have been shifting their orders from China in recent years and Bangladesh is grabbing the diverted orders which are cotton items while Vietnam is getting the orders for non-cotton items, Faruque said. ‘It is our expectation that Bangladesh would be the largest RMG exporter in the EU exceeding China by 2023, but it may take more time due to the current gas and electricity crisis,’ he said. The BGMEA president said that the three impediments, including the gas and electricity crisis and cumbersome customs policy, would affect the required export growth of Bangladesh. ‘There is a possibility for Bangladesh to become the largest business partner of the EU within a few years as the country is grabbing the major portion of apparel export orders which are shifting from China,’ Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development, said. Although Bangladesh is getting the major portion of diverted orders for apparel products from China, the country (Bangladesh) has failed to attract diverted investments, he said. ‘Bangladesh is getting only export orders while Vietnam, Indonesia and India are attracting the investments which are diverting from China,’ Razzaque said.
The economist said that Bangladesh should emphasise investments in non-cotton and artificial fibres to sustain its export growth in the EU market. ‘Although Bangladesh will get duty-free benefits in the EU market up to 2029, the country should prepare for a free trade agreement with the EU to retain the export growth in the market after 2029,’ Razzaque said. He said that Bangladesh would have to set its policy keeping in mind that Vietnam, Indonesia and India are getting investment benefits from the China order diversion. It might be critical for the export growth of Bangladesh that Vietnam has already signed an FTA with the EU and Indonesia and India are negotiating with the economic bloc for signing an FTA,’ Razzaque said. He said that though Vietnam was the third largest apparel exporter in the EU market with a low volume, Bangladesh should keep in mind that tariffs on Vietnam would be abolished in 2027 under the FTA and duty on Bangladesh’s exports would be imposed after the graduation of the country from least developed to developing one in 2029. According to the Eurostat data, Vietnam’s apparel exports to the EU in January-August 2022 increased by 40.49 per cent to 2.58 billion euro from 1.83 billion euro in the same period of 2021.