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RMG exports to Japan cross billion dollars

| Updated: July 27, 2022 11:30:04


-FILE PHOTO -FILE PHOTO

Bangladesh's ready-made garment (RMG) exports to Japan crossed the billion-dollar mark in fiscal year (FY) 2021-22 after a decline in the previous two fiscals.

Apparel exports to Japan doubled in the last decade, thanks to entrepreneurs' relentless efforts to meet Japanese standards and policy support like cash incentive, say industry people.

They also attribute this rise in exports to Japan's 'China-plus policy' and laxity in its rules of origin.

Locally-made knit items have been enjoying duty-free facility in the Japanese market since 01 April 2011 and woven items since April 2014, although raw materials are imported, they add.

Bangladesh exported apparel items worth $1.098 billion marking over 16-per cent growth in FY22, according to data of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

It fetched $944.82 million in FY 2020-21. RMG exports first crossed billion dollars with $1.091-billion earnings in FY19.

Apparel exports, including knit and woven items, were $478.48 million in FY 2012-13 which was only $74.33 million in FY 2008-09.

Local exporters, however, listed a number of issues, including buyers' zero-tolerance policy on quality, timely shipment and language as obstacles to exporting apparel items to Japan.

"As Bangladesh has been exporting to renowned brands in major markets, including USA and EU, confidence of Japanese buyers are also increasing regarding the products and their quality here," cites Fazlee Shamim Ehsan, vice-president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Exports fell mainly because of the pandemic, he says, expressing hope that shipments will increase due to Japanese buyers' 'China-plus' strategy.

Mr Ehsan, however, says Vietnam and Myanmar are gaining much than Bangladesh and emphasises an exclusive marketing policy there to boost exports.

Talking to the FE, BKMEA former president Fazlul Hoque says, "There is no denying that Japan is one of the most important and potential markets beyond traditional ones."

According to a recent UNCTAD report, preferential access to Japan for duty-free treatment of T&C (textile and clothing) products for the targeted LDCs largely depends on their membership to the Association of South East Asian Nations (ASEAN).

Bangladesh and Nepal will be subject to the GSP or MFN (most favoured nation) rate in their exports to Japan as they are not part of ASEAN and therefore do not benefit from the ASEAN-Japan Comprehensive Economic Partnership Agreement (CEPA), it notes.

In this context, they will face tariffs on their clothing exports ranging from 8.5-9.0 per cent.

On the other hand, Cambodia, Lao PDR and Myanmar will continue enjoying duty-free market access to Japan through the CEPA, which applies to customs duties on T&C imports into Japan.

On this issue, Mr Ehsan suggests that the government start lobbying so that Bangladesh can enjoy the existing duty benefit even after its graduation.

Entrepreneurs should also focus more on increasing efficiency, product diversification and reducing wastage to retain competitiveness during the post-LDC period, he says.

The size of the apparel market in Japan was expected to reach more than $90 billion by 2021, according to industry insiders.

Japanese buyers are very strict about quality products where they show zero tolerance as they check products piece by piece, they observe.

They explain that it takes time to develop business relations with Japanese buyers as they want to know whether local exporters can meet quality requirements and make timely shipments.

Language is another barrier to making direct relationship with Japanese buyers, they conclude.

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