The readymade garment industry has faced a major setback with an estimated loss of Tk 10,368 crore in exports due to an abrupt halt of production in six days during the anti-quota movement.
However, the figure could be much higher if all losses the export-oriented sector suffered during this period are taken into account, sources concerned said.
Production halt has also caused a shortage of raw materials in the backward linkage industries, leading to an estimated loss of Tk 3,000 crore.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Mohiuddin Rubel told Bangladesh Post, “Our export was $4 billion during this time last year. We have incurred a loss of $1,600 million per day. In six days, our direct loss stood over Tk 10,000 crore.”
“We could lose customers (export orders), face delay in shipment, witness cancellation from buyers, encounter shortage of raw materials and ultimately incur even more losses in the aftermath,” he added.
To overcome this crisis, industry leaders are seeking policy support and financial assistance from the government while country’s economists have stressed the need for enhancing the capacity at ports.
According to industry update, the garment sector, already under constant pressure from buyers' conditions and restrictions, has voiced concern due to recent instability.
From July 19 to 24, production suspension resulted in a loss of over Tk 10,000 crore in exports. Concurrently, the halt in the import-export activities led to a shortage of raw materials, impacting the production in washing and dyeing industries, causing an additional loss of around Tk 3,000 crore.
The sector’s performance in the last fiscal year was underwhelming with garment export growth
increasing by 2.86 percent in the first 11 months, a significant decline from the nearly 8 percent growth during the same period in the FY 2022-23.
Currently, most factories are producing winter garments and fulfilling Christmas orders. However, the recent internet service disruption has caused a lack of confidence among buyers.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem said, “The biggest loss due to the internet shutdown was that buyers could not communicate with us. Orders that were supposed to be placed during this time have gone to other countries. It will be challenging for us to recoup this loss.”
Industry leaders are urging the government to provide policy support, including cut in source taxes, easing customs and banking regulations, and financial aid.
BGMEA President S. M. Mannan Kochi told journalists, “Recovering from this blow will be difficult. We have lost our image among buyers due to communication issues.”
Economists, however, believe that restoring efficiency at ports should be the government’s primary focus. However, given the country’s current economic situation, providing special assistance to the garment sector may be challenging for the government.
Economist Dr. Toufiqul Islam Khan said, “The government’s financial capacity is very limited. They cannot provide financial support from the state treasury. The budget situation does not allow for it. They can, however, assist in other areas such as reducing fuel, gas, logistics and customs fees.”
In the fiscal year 2022-23, out of a total export income of $5,555 crore, $4,699 crore came from the garment sector, the official data showed.
