Bangladesh will give garment, terry towel and specialised textile exporters a one per cent special incentive. The aim is to help exporters remain competitive in the global market. Currently, Bangladesh garment exporters receive a four per cent cash incentive for shipment to non-traditional markets. The country considers all destinations as non-traditional markets except the EU, the US and Canada.

Bangladesh’s garment exports have been declining for the last five months because of currency appreciation, rising cost of production, lower consumer spending on garments and the free trade agreement between Vietnam and the EU. In the first half of the fiscal, Bangladesh’s apparel shipments fell 6.21 per cent. The US-China trade war resulted in a slump in consumption of readymade garment products. Consumption fall also forced the country’s exporters to lower prices. The readymade garment sector contributes 83.52 per cent to the country’s overall export earnings. Due to Bangladesh’s high dependency on garment exports, any instability in this sector in future could result in huge unemployment and a trade deficit. So the country needs to diversify its export basket. Bangladesh has to develop factory to port communication in order to reduce lead times and has to have a one stop service in trade procedure and documentation in product transaction.