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New RoO give denim makers reason to rejoice
Jan '11
The denim industry in Bangladesh is blooming, mainly because of the relaxation in trade regulations and also because orders from China are now shifting to Bangladesh. Thus, more and more business owners in Bangladesh are substantially investing in the denim sector of the country so as to take advantage of the growing prospects of the industry across the world.

As the demand for denim items is on a rise owing to the changing fashions and the denim units are either raising their capacity or are establishing new plants to meet the growing demand. Earlier, most of the denim products either constituted the menswear category or came in the form of winter apparels, but with the changing fashion trends they are now made available for men, women as well as kids' apparel range and that to for all seasons.

As stated by the Bangladeshi denim producers, the relaxation of its rules of origin (RoO) by the EU under the Generalised System of Preferences (GSP), has laid bare many new prospects for the denim sector.

The relaxed RoO which became effective from January 1 allows the exporters to enjoy duty-free access to the EU nations even when the products are manufactured from fabric brought in from other countries. Earlier, the exporters enjoyed this benefit only in case of goods produced from local fabrics.

Such relaxed GSP rules are believed to considerably boost the demand for domestically made denim items. The garment producers in Bangladesh till now used to import fabrics from countries like India, China, Pakistan and Indonesia, which used to cost them at least 45-day lead-time.

The Bangladeshi garment manufacturers however stated that, they certainly would not import fabrics from foreign countries at higher prices, lead-time and freight charges, if the same is available in the local market. Presently, around 21 local denim manufacturers source around 40 percent of the country's total demand, while the rest 60 percent demand is met through imports. Each of these 21 factories is capacitated to churn out around six lakh yards of denim every month.

Fibre2fashion News Desk - India

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