India, Bangladesh to sign MoU to boost exports

DHAKA: Bangladesh will sign a memorandum of understanding (MoU) with India for duty-free export of eight million pieces of readymade garments.

The offer had been made during the 14th summit of the South Asian Association for Regional Cooperation (SAARC) in New Delhi and was firmed up during a subsequent visit of External Affairs Minister Pranab Mukherjee to Dhaka.

Chaired by Bangladesh Chief Adviser Fakhruddin Ahmed, a meeting of the Council of Advisers on Tuesday approved the MoU proposal for duty-free import by the Indian government.

The move comes amidst a steep fall in Bangladesh's readymade garments' exports.

The manufacture has been hit by labour unrest due to bad working conditions and failure to revise wages, while the exports were hit by political turmoil in the second half of 2006.

Growth in the readymade garment industry, the powerhouse of the country's export economy, has slowed with the sector for the first time failing to reach export targets and facing a sharp decline in new orders, the newspaper said.

"Yes, we passed a rare disappointing year," said Anwar-Ul-Alam Chowdhury, president of Bangladesh Garment Manufacturers and Exporters Association.

Chowdhury blamed the slowdown on a weakened US economy and the unprecedented rioting at garment industries in and around Dhaka for eight weeks when nearly 400 factories were damaged and the Dhaka Export Processing Zone was shut down twice.