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The government’s decision concerns the clothing sector



Owners feel that the sudden decision to withdraw cash assistance to the export sector will put the export-led garment industry in crisis.

Bangladesh Bank says that if Bangladesh joins the club of developing countries in 2026, then there will be no opportunity to keep cash assistance As part of this, the process of phasing out cash assistance has been initiated

84 percent of the country’s export income comes from the garment sector Garment industry owners say it could have been done on priority basis after discussing with them Because, at this time, the clothing sector is under pressure due to various reasons including the dollar crisis

In view of a letter from the Bangladesh Bank Commerce Ministry, the State Minister for Commerce Ahsanul Islam Titu told the German-based media outlet Deutsche Welle, “The cash assistance will gradually decrease. But I don’t know that any letter has been given to Bangladesh Bank from the Ministry to cancel it suddenly.’

However, Bangladesh Bank spokesperson and executive director Majbaul Haque told Deutsche Welle, ‘It is the decision of the Bangladesh government. As the government has decided, Bangladesh Bank has issued the notification.

As per notification of Bangladesh Bank, cash assistance will no longer be available for garment exports of five HS codes of the garment sector. The products are knitwear t-shirts, shirts, trousers, woven jackets, blazers etc. And in the export-oriented domestic textile sector, alternative cash assistance in lieu of tariff bonds and duty draw-backs has been reduced from 4 percent to 3 percent. Additional special support for exporters in the textile sector in the euro area has been reduced from two percent to one percent The export incentive for small and medium factories in the garment sector remains at four percent New products or new markets in the ready-made garment sector has been reduced from four percent to three percent India, Japan and Australia are excluded from the new markets Besides, special cash assistance on export of ready-made garments has been reduced from 1 percent to 0.50 percent It is said to be effective from January

What Garment Industry Owners Are Saying

The five types of knit and woven products from which the cash assistance has been fully withdrawn are the top exports. Shahidullah Azim, vice-president of BGMEA, an association of garment industry owners, told Deutsche Welle, ‘There are fewer orders for garments because of the war. And five-six months ago we took the order We have fixed the price based on cash assistance Now that price can no longer be adjusted We will be at a loss And those who are new to this sector will be discouraged.’

He said, ‘Cash assistance in five items has been fully waived But those products are our main items and are the biggest export And the new market that we created will collapse again We created new apparel markets in Japan, India and Australia during the crisis It will be difficult to retain this market.’

He said, ‘There is no gas, the price of the dollar has increased as a result of which the price of raw materials has increased All in all, production costs have increased Production has also decreased If the cash assistance is removed, the cost of production will increase Then the competition will be very difficult.’

Regarding the obligation to release cash assistance in 2026, he said, ‘2026 is still three years away. It could have been taken up step by step by discussing with us But taking such a sudden decision without talking to us, the garment sector will face disaster.’

According to the Export Development Bureau’s calculations, in the fiscal year 2022-23, goods worth five thousand 556 million dollars are exported. This export is 6.67 percent higher than the previous financial year However, in the first half of the current financial year, the pace of growth has slowed down In the first six months of the financial year, goods worth two thousand 754 million dollars have been exported Growth has been 0. 84 percent

Executive President of Bangladesh Knitwear Manufacturers and Exporters Association BKMEA. Hatim said, ‘The spinning mills of the knit sector and backward industries will suffer the most as a result of this decision. 56 percent of the garments we export are knitwear Full cash assistance has been given in this sector That is our main concern Discounted at different rates from other garments It seems to us that some quarters have actually given away the reduction in cash assistance.’

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