BGMEA: Government Grants 4 New Land Customs Ports for Raw Material Imports

On 21 December 2022, the National Board of Revenue (NBR) of the Government of Bangladesh issued a gazette that permits the import of yarns from India through four new land customs ports, namely Bhomra of Satkhira, Sonamasjid of Chapainawabganj, Darshana of Chuadanga, and Banglabandha of Panchagarh.

The semblance is that Bangladesh is ticking boxes right at this moment building its competitiveness in the global textile industry.

Previously, the Benapole land customs port was the only point of entry for yarn imports from India. This decision is critical for the readymade garment industry as it depends heavily on imported raw materials, especially cotton, and yarn, with India being the primary source.

Until now, 80% of the trade between Bangladesh and India was handled through Benapole port alone, which was a significant bottleneck due to its limited capacity.

Furthermore, the government has waived the restriction on partial/multiple shipments while importing raw materials through Benapole port.

This will bring greater flexibility, reduce warehousing costs, and improve supply chain management, thus, bolstering the growth of the RMG exports and the bilateral trade between Bangladesh and India.

It is worth noting that India is the largest producer of cotton and the second-largest producer of Manmade Fibre and Filament globally, making it a critical source for Bangladesh's growing need for raw materials. This move will reduce congestion, enhance efficiency, and potentially decrease transportation costs, ultimately reducing lead time in export and improving competitiveness.

As India is also a potential market for Bangladesh's RMG, the opening of new ports will improve the efficiency of exporting goods to different parts of India, especially the Northeast.

In 2022, Bangladesh's RMG exports to India reached US$898.33 million, up from US$438.21 million in 2018. The neighboring country is also an emerging economy with a sizeable population and rising middle-income group, which presents a potential fashion market.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) played an active role in advocating for this policy reform by engaging with the government. The Ministry of Commerce and the NBR deserve gratitude for this critical decision.

The government is currently working to enhance the infrastructure and administrative capacity of all land customs ports, including building road and rail networks and warehousing capacity.

There is also significant development work ongoing in Benapole Port to establish warehouse facilities.

CREDITS: BGMEA source