B’desh garment exporters hit by Indian payment crisis


Bangladesh’s readymade garment (RMG) exports to India has hit a hurdle as more than 20 apparel firms have failed to receive timely payment from an Indian company to which they had supplied goods, according to exporters.

In September last year, the Indian Government extended duty-free access for Bangladeshi clothing item exports to India. This step was welcomed by Bangladesh’s RMG exporters and generated a lot of enthusiasm among them to explore the Indian market.

However, with one of the Indian companies failing to timely pay for its clothing item imports from Bangladesh, it is now being feared that it might affect Bangladeshi garment firms.

Speaking on the issue to fibre2fashion, Mr. Md Siddiqur Rahman, second Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “A well-known Indian kidswear retailer, which is now facing financial trouble, has not paid its dues, which is severely affecting the Bangladeshi garment industry.”

Informing about the number of units that are affected due to non-payment of dues by the Indian retailer, he says, “There are 23 RMG factories in Bangladesh whose payments have been stuck up. Some of them have not received their payments since more than a year. The payment due is more than Tk 500 million. The 23 apparel units are now on the verge of collapse.”

Talking about steps that are being taken to resolve the issue, he mentions, “We have complained to the Governor of Bangladesh Bank, who has raised the issue with the Deputy Governor of the Reserve Bank of India. We have also complained to Centre for Policy Dialogue (CPD), our Foreign Ministry, the Ministry of Commerce, Bangladesh Embassy in India as well as the Indian Embassy in Bangladesh. So, everybody is aware about the issue.”

“Our Commerce Secretary, who is currently in India, is also expected to raise the matter during his discussion with Indian officials on bilateral issues,” he adds.

Mr. Rahman winded up by saying, “The Indian retailer has given commitment to make the payment by 30th June, 2012.”

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