Increasing possibilities of a free trade agreement (FTA) between India and the EU is upsetting Bangladeshi readymade garment (RMG) exporters, who are already grappling against difficulties posed by Eurozone crisis and troubles in US economy.
If FTA negotiations between India and EU turn out to be successful, Indian apparels would gain preferential access to the EU markets under the generalized system of preferences (GSP), just like Bangladesh.
The GSP scheme facilitates preferential entry of a wide range of industrial products produced in some of the developing countries, to the EU markets. The preferential access is generally in the form of zero or reduced customs tariff rates.
The negotiations between India and the EU are currently in final stages, and are likely to conclude by end of current year or early 2013.
The successful completion of negotiations between EU and India would increase competition for Bangladesh, which has EU as its biggest apparel export market, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President M Shafiul Islam Mohiuddin said, while speaking at a press conference.
Though Mr. Mohiuddin said they are not much bothered about India gaining GSP status, they certainly would have to initiate steps to counter the challenge of enhanced competition.
The country needs to focus on addressing infrastructural issues, like that of power and gas supply, he added.
Further, Mr. Mohiuddin said lifting of the trade ban levied on Myanmar by the EU and the US also poses a threat to Bangladeshi apparel exporters, as Myanmar with immense energy resources would emerge as a big competitor of Bangladesh in times to come.
He said it is time for Bangladesh to seriously ponder on the issues and initiate measures to counter challenges coming its way.