The government is considering providing cash incentives to the garments accessories and packaging industry to help it grow further.
The industry is likely to enjoy the incentive facility from the next FY24, sources said.
The Ministry of Commerce (MoC) has recently written to the Ministry of Finance for providing the facility.
It also suggested preparing a combined circular for the country’s clothing sector.
The decision came following a meeting with the stakeholders after reviewing applications of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA).
The representative of the Finance Division, who attended the meeting, assured of considering the MoC recommended incentive facility from the next fiscal.
Local garments accessories and packaging makers demanded cash incentives last year as well.
Fabrics and accessories are two major raw materials of the RMG industry.
Some 1,900 accessories and packaging makers under the BGAPMEA act as the backward linkage industries of the RMG sector and meet almost its total demand, industry insiders said.
An official said the Finance Division did not consider most of the recommendations, sent by the MoC for providing export incentives.
Some 43 sectors are enjoying the government’s cash incentive incentive/subsidy, ranging from 1% to 20%, against their export earnings in the current FY23.
The RMG sector enjoys bonded warehouse and cash incentive facilities.
But the accessories and packaging industries do not get any cash benefit despite their hefty export earnings.
Currently, some 15 accessories and packaging products are exported to 21 countries and regions, including the Netherlands, South Africa, Pakistan, India, Middle-East, Ethiopia, Indonesia, Italy, Sri Lanka, Turkmenistan, Germany, Austria, etc.
The sector earned about $7.67 billion (deemed and direct export) for the country during FY22, of which about $1 billion was direct export.
It has set an export target of $12 billion by the end of 2025.
More than 700,000 employees are working in the sector, of which 20% are women, according to the association.
Comment here