It is estimated that Indian textile and garment companies have already
invested Rs. 30 billion (US$ 600 million) in Bangladesh during the
current fiscal 2011-12, and this investment is likely to rise
significantly..
.
Last year, the Indian Government took a decision to permit import of 48
textile and garment items from Bangladesh at zero-duty. This has also
contributed to the increase in investment by Indian firms in Bangladesh.
Some Indian companies are even or relocating their production base to
Bangladesh..
.
A major advantage to Indian companies investing in Bangladesh would be
with respect to the cost of labour, as minimum wage there is just Rs.
1,700 compared to the minimum wage of Rs. 5,000 in India..
.
Garment imports from Bangladesh to India increased around three-times to
US$ 22 million during the first six months of current fiscal. .
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Speaking to fibre2fashion, Mr. A Sakthivel, Chairman of Apparel Export
Promotion Council (AEPC), said, “A lot of Indian companies have already
invested and are going to invest more money in Bangladesh garment
sector, because producing goods from Bangladesh will work out 20 percent
cheaper for them.”.
.
“The rise in Indian investments in Bangladesh, along with a surge in
garment imports from Bangladesh is likely to negatively impact India’s
garment exports. Moreover, Bangladesh companies may also enter and
compete in India’s domestic market,” he added..
.
To protect India’s interests, he suggested, “The Government of India can
do two things. First, the 10 percent excise duty on branded garments
should be removed immediately. Secondly, the Government should insist
that Bangladesh should use only Indian origin yarn or fabric to produce
the garments which come to India.” ”
Date:2/1/2012
Source:www.mrketplace.com