Bangladesh garment industry sees boost in its exports

Bangladeshi exports have surged by 12.56 percent to $27.37 billion from a year earlier in the first 11 months of this financial year according to the Export Promotion Bureau. Garment exports increased nearly 15 percent to $22.2 billion in July-May. Boosted by strong clothing sales, Bangladeshi garment exports increased by 7.22 percent in May from a year earlier to $2.7 billion.

In its new budget for the coming fiscal year, starting on July 1, Bangladesh announced minor sops to improve safety in the garment industry after a string of fatal factory accidents, including the collapse of building housing factories in April 2013 that killed more than 1,130 people.

In fact, late last year, there was also an amendment done by the government in its labour law to boost worker rights, including the freedom to form trade union. There was a raise in the minimum wage for garment workers by 77 percent to 5,300 taka ($68).

But it has not allocated new funds to relocate dangerous buildings. The garment industry was looking for government support to buy land and relocate factories in unsafe buildings to a planned industrial park in a bid to restore the confidence of Western buyers in an industry that generates 80 percent of export earnings.

As, global buyers have also slowly started pulling out orders from around 30 percent of the garment factories housed in unsafe, shared buildings and which employ 1.5 million workers, the Bangladesh Garment Manufacturers and Exporters Association reported.

The Bangladeshi garment industry supplies for many Western brands such as Wal-Mart, Tesco and H&M.

However, Finance Minister Abul Maal Abdul Muhith’s 2014/15 budget removed import duties on raw materials to make pre-fabricated buildings and abolished taxes on safety equipment such as fire-resistant doors and emergency lights as a support to its garment industry.

Bangladesh with low wages and duty-free access to Western markets, the garment sector has a vital role to make it the world’s largest apparel exporter after China.