The government is planning to relax the rules on the use of imported duty-free fabric to help local producers turn to high-end clothing and raise export earnings as businesses create more waste when manufacturing fancy goods for foreign markets. According to Daily star, Md Jafar Uddin, Secretary of Commerce told “If needed, we will amend the rules,” “We will examine it and if we can observe that it is necessary to increase our export, we will amend the rules soon.”
Last week, textile manufacturers and exporters asked the bond commissioner in Dhaka to raise the waste ratio in clothing manufacturing as local clothing exporters move to high-end goods that require more yarn and fabric waste. The Ministry of Commerce set the waste ratio for clothing in 1998 at between 7 and 9 per cent. Also at that time local producers and exporters had said that, given the volume of material needed for a finished product, the cap was much too small.
Since more fabric is eventually lost in the manufacturing of high-end textile goods, the government has been advised by both producers and exporters to raise the cap to up to 30 percent or more. As most fabrics and yarns used by the industry are manufactured duty-free under a bonded facility, the government engages in dictating the waste ratio. It imposes additional taxes on textile producers who end up producing more waste than is allowed, while exporters also face customs abuse, they added.
Owing to a mismatch in the quantity of fabric manufactured and its consumption for producing finished clothing products for export under bond licenses, customs offices often postpone releasing goods from ports. High-end brands comprise approximately 40 percent of all clothing pieces exported from Bangladesh.
The local textile market is increasingly moving away from simple and semi-high-end items and it is impossible for producers to uphold the current waste cap at this point. This is because high-end products are subject to three important facets of the manufacturing process: sampling, development and approval from buyers, they added. When it comes to high-end garment making, the volume of fabric used is less, but the value is high.
As a result, these products require more fabric compared to basic garment items since apparel makers need to provide small details in their samples. Sampling is one of the key elements of the pre-production process. It includes details like colour specifications, composition, description, quantity, and details of embroidery for the buyer. Experts have agreed with the demand of the exporters. Because of the use of new technology, professional staff, effective use of raw materials and improved quality management, the percentage of waste produced varies from factory to factory, he said.
Local producers and exporters contacted Dhaka’s Customs Bond Commissioner (CBC) to demand an improvement in the waste ratio. Under the National Board of Revenue, CBC Dhaka is a field office. “Relaxing these rules is not CBC Dhaka’s issue. Instead the related ministries can decide based on revisions,” said CBC Commissioner Md Shawkat Hossain. With respect to raising the waste cap, CBC Dhaka will share its views.