Knit exporters demand 15pc cash incentives
Star Business Report
Knitwear exporters have urged the government to increase cash incentives to 15 per cent from 5 per cent as they are facing stiff competition with the Indian manufacturers in the global market. Indian exporters enjoy a strong backward linkage support with its own raw materials and capital machinery. Moreover, the government there recently announced to provide 25 per cent incentives to its exporters directly and indirectly, they explained. "Indian knitwear exporters have become more aggressive in the global markets. The gap between India and Bangladesh in terms of incentives is so wide that we may even lose our existing markets," Fazlul Haque, president of Bangladesh Knitwear Manufacturers and Exporters Association, told a press briefing in Dhaka yesterday. Local knitwear manufacturers are lagging behind as the main raw material is imported from other countries and the incentives announced by the Indian government have created an imbalance, he mentioned. Bangladeshi exporters are still enjoying 5 per cent cash incentives, but it will be withdrawn from the next financial year beginning July as per government announcement earlier. Chinese exporters are facing many restrictions in the global markets and it is an opportunity for Bangladesh. Leading global knitwear buyers are now concentrating more on alternative sources like India, Bangladesh and some other countries for procurement instead of China. The BKMEA president said local exporters need more government support to retain their existing markets as well as to maintain present growth. Haque urged the finance minister to withdraw tax on machinery import in the next budget and to simplify the customs procedures for importing yarn through Benapole land port. Want smooth power supply The exporters claimed the knitwear production has gone down by around 30 per cent in the recent days due to power and gas crises. A factory gets power for four hour on an average during a 12--hour working time. Most of the factories are now using alternative source of power and it has made the overall production costly, they said. The BKMEA president urged the government to allow them set up mini power plants in the factory area. The association members can set up power plants on co-operative basis or joint venture with other local or foreign partners, he said About the gas crisis, he said the energy adviser has assured them of adequate gas supply by June this year.
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