Business leaders call for ease in bond licence issuance for RMG
In the past 14 years, 4,187 bond Licences have been deactivated, while only 1,558 new Licences have been issued
Business leaders and analysts have emphasised the necessity to streamline the bond Licence issuance process in Bangladesh to facilitate business expansion and bolster export earnings.
At an Economic Reporters' Forum (ERF) event, they termed the licence-obtaining process "cumbersome" as it involves bureaucratic red tape.
In the past 14 years, 4,187 bond Licences have been deactivated, while only 1,558 new Licences have been issued, according to a book titled "Bangladesh RMG and Sustainable Development" unveiled at the event.
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Payment of VAT and other taxes is deferred under a bonded warehouse facility until the goods are removed and shipped, or exempted, providing a breathing space for businesses.
Mohammad Hasan, author of the book, said, "The garment sector may face challenges because of the bond difficulties whereas it also helped the growth of the garment sector."
Ferdaus Ara Begum, CEO of the Business Initiative Leading Development (BUILD), said achieving the $100 billion export earning target by 2030 will be difficult if bond licence issuance rules are not relaxed for traders.
Apart from the bureaucratic tangles, Hasan cited the gas crisis and ease of doing business as other major challenges for the RMG sector.
"Bangladesh's share in global garment trade is below 7%, which indicates that there is an ample opportunity to grow even within the garment sector," said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The BGMEA president said single-product dependency is not good for the economy and that Bangladesh needs to diversify export products beyond RMG.
According to him, Bangladesh has to focus on high-value RMG production along with regular items to reach the $100 billion RMG export target.
Faruque said, "Bangladesh's garment industry reached the second top position in the world, but there are many external challenges. So, product innovation should be a priority to face the competitors."
At the same time, the country has to carry out some policy reforms for the sector's sustainable growth along with product diversification, he pointed out.
He also emphasised uninterrupted gas and electricity supply in the garment sector, saying that it is very essential for quality and timely production.
Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) urged that the Bangladesh Bank issue a circular to stop deferred payment by some international clothing retailers and brands, which he said, creates problems for the local suppliers.
Abdullah Hil Rakib, director of BGMEA, Prof Akhter Hussain of Dhaka University, Mayeesha Mahmud, director of Cotton Group, and Ilahi Dad Khan, a former bureaucrat, among others, spoke in the event, moderated by ERF President Mohammad Refayet Ullah Mirdha.
