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Garment producers grudge FDI flow
22
Jun '11
Bangladesh's domestic garment producers are frowning over foreign investment in the biggest export-earning sector of the country.

The domestic apparel producers are firmly resisting the foreign direct investment (FDI) in the country's ready-made garments (RMG) industry, even as more and more foreign-owned firms are eager to invest in this flourishing industry of the country.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has written to the Board of Investment (BoI) and the Ministry of Commerce (MoC) asking them to impose a ban on entry of foreign investments in the country's garments sector.

Several foreign investors, particularly from countries like China and India, are on the look out for investment opportunities in Bangladesh's RMG sector. The interest of these countries is mainly due to the generalised system of preference (GSP) rules that allow Bangladesh to duty-free export its goods to the 27 European Union member nations.

In view of the request made by BGMEA, till 2000, BoI did not allow the foreign-owned firms to invest in the country's RMG sector outside the export processing zones (EPZs). However, the norms were relaxed thereafter, and from 2005 onwards, BoI has allowed full FDI participation in the domestic industry.

The industry has expanded in terms of exports and investments as the factories are either building their capacities or establishing new units to meet the soaring demand, both domestically as well as globally.

During the initial 11 months of the current fiscal year, knitwear items and woven garments, which are the country's key export items, posted a year-on-year growth of 46.76 and 39.44 percent, respectively.

The RMG sector's average exports during July-May period came to US$ 15.95 billion, with knitwear items contributing US$ 8.44 billion and woven garments US$ 7.51 billion.

Several marketing officials-cum-entrepreneurs from abroad are lobbying hard to invest in the country, the BGMEA leaders have contended.

The BoI received a maximum 229 proposals for investment in the textile and garments sector during July-April 2011 period. These proposals registered with the BoI are either from fully foreign-owned companies or joint venture enterprises.

Fibre2fashion News Desk - India

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