Bangldesh apparel-makers strongly opposing FDI in readymade garment sector

Japanese investors are showing interest in producing basic readymade garment products like pants and shirts. They have also assured of increasing garment imports from Bangladesh, which is strongly opposed by Bangladesh apparel manufacturers that there would be no foreign direct investment (FDI) in the country’s booming readymade sector, claiming that they are capable of manufacturing those, said Reaz bin Mahmood, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The association has asked the Japanese businessmen to invest in composite textile industry or value-added products such as suits, tents and school bags, where local investment has been negligible.

A foreign investor has set up a plant to produce apron, gloves and other products which are used in hospitals, such investment is encouraged in Bangladesh.

Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president Kazi Akramuddin, who represented the business community in the Bangladesh-Japan dialogue, said that the Japanese investors wanted to come in a big way.

Japanese investors want to know the incentives that would be offered to them if they invested in Bangladesh.

Bangladesh want the Japanese to invest in sectors such as power, information technology and other value-added industries.

BGMEA president Atiqul Islam, during the meeting with the visiting Japanese delegation led by Norihiko, and the Bangladeshi delegation comprising of 32 members led by Abul Kalam Azad senior secretary of the Prime Minister’s office said that Japan investors would be encouraged to invest in high-end products where Bangladesh entrepreneurs had little investment.

The apex trade body chief said that Japan was helping Bangladesh to construct Matarbari power plant and Dhaka asked Tokyo to construct LNG terminal in the country.

An official, who was present at the meeting, said that the Japanese delegation raised the issue of getting utilisation declaration (UD) certificates for the 100% foreign-owned apparel manufacturing units which operate outside export processing zones (EPZs).

They want Bangladesh to develop a procedure so that foreign-owned factories operate outside EPZs can get UD certificate.
The Bangladeshi assured them to look into the issue after consulting all stakeholders including the BGMEA, the UD-issuing authority.

But the press release issued by the foreign ministry states that the governments and private sector of the two countries have noted a number of ways and areas to tap mutually-beneficial opportunities for private investments in Bangladesh.

They recognised areas like textiles, leather, pharmaceuticals, IT and ITES, tourism and hospitality, health, etc as possible sectors where both countries can enter into cooperative undertakings in the future.

The Japanese side stressed the importance of developing the special economic zones and adjoining infrastructures in Bangladesh to attract greater quantum of investments from Japan.

It urged Bangladesh to address some of operational issues flagged by the Japanese investors, including simplification of various procedures related to certification, licensing approval process, issuance of visa, and work permit.

Various incentives were also discussed to bring improvement in the overall investment climate and to enhance trade relations between the two countries.

The meeting decided to hold the second Joint Bangladesh-Japan Public- Private Economic Dialogue in Japan next year.

Investors are showing interest to invest in Bangladesh because of the zero-tariff duty facility the country enjoys from 27 member-countries of the European Union (EU) under the new generalised system of preference (GSP) rules, made effective January 1.