Textile entrepreneurs on Tuesday urged government to immediately stop huge illegal influx of foreign textile-fabrics that they said are gobbling up the domestic market crowding out local products.
"Even 30 percent cash incentives will not be able to help the industry survive unless the illegal imports come to an end," Bangladesh Textile Mills Association (BTMA) chairman MA Awal told reports after a meeting on the textile industry at FBCCI office.
The meeting of the FBCCI Standing Committee on Textile, Specialized Textile and Backward Linkage Industries observed that Dhaka's Islampur and Babu Bazar clothing hubs, as also other places in the country, were getting inundated with an import glut of fabrics - mainly from China and India.
The fabrics from China were being imported through under-invoicing and those from India coming either through smuggling conduits or misdeclaration like 4-5 truckloads of fabrics coming against an invoice for one-truck imports through land ports, Awal pointed out.
He said that the recent pressure on foreign exchange was an outcome of under-invoicing, as importers pay the rest of the import value to the exporters through diverting hard-earned foreign currencies from abroad using hundi.
"This malpractice is being done in connivance with the Customs officials," said the industry leader, who is also the chairman of the FBCCI standing committee. Growth of the woven sub-sector of the country's clothing industry is being hampered due to such underhand dealings.
"We'll be able to become self-sufficient in woven textiles like that of the Knit sub-sector in only three years if the malpractice can be removed as well as the government announces an incentive package for the industry similar to those of neighbouring countries," he said.
The meeting reviewed the incentive package of Pakistan and India, including interest rates on bank loans for textile at 3.5 per cent in Pakistan and 6 per cent in India.
"The textile industry should receive incentives more than that of agriculture if the government is to reduce poverty," said the BTMA chairman, explaining that the industrial contribution to GDP is higher than agriculture-and textile sector alone shares 48 per cent of the total industrial contribution.
Eminent textile entrepreneur Mohammed Harun Ur Rashid painted a horrendous picture of under-invoicing, saying that shirting fabrics of US$1.20 per meter on Chinese market are being imported at an invoiced price of 20 to 25 US cents while suiting fabrics of US$2.5 per meter imported at 40-50 cents.
"The rest of the import value is being paid through hundi," he said.
As a consequence, he said, around 70 per cent of the textile units dependent on the local market already faced closure and the rest getting on the verge of going bust.
"You go and have a look at the fabric markets in Islampur and Babu Bazar-you'll find only the Chinese and Indian fabrics," he added.
Representatives from all the textile sub-sectors bar Bangladesh Knitwear Manufacturers and Exporters Association were present at the meeting in the conference room of the Federation of Bangladesh Chambers of Commerce and Industry.
By UNB, Dhaka
?Copyright 2003 by The New Nation
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