Bangladesh can increase its earnings from $8 billion to $22 billion by exporting goods to the European Union annually if it can diversify exports apart from non-apparel products with high export potential including footwear, leather goods, home textiles, and fish and shrimp.
It was revealed in a study conducted by Research and Policy Integration for Development (RAPID).
The findings of the study were shared at a workshop titled “Exploring Export Diversification Opportunities in the European Union” jointly organised by Economic Reporters’ Forum (ERF) and RAPID at ERF auditorium in Dhaka on Sunday.
Excluding RMG, Bangladesh still has $23 billion potential unutilised in the European market, which needs to be utilised through appropriate policies and action, said Dr Mohammad Abdur Razzaque, chairman of RAPID.
He said that Bangladesh should take some policies to increase exports of non-RMG products. One of them is to give duty-free facilities for imported raw materials of manufacturing products.
The economist further said that Bangladesh was doing very well in the manufacturing sector during the last decade. Exports from this sector should be emphasised in the future as part of export diversification, he added.
The RAPID's analysis has showed that 34.7 per cent of the European cotton market is occupied by Bangladesh.
But more than half of manmade fibre (MMF) is exported to that region of its total appeal import. If Bangladesh can increase MMF exports, it is possible to increase exports of goods to Europe worth $46-$60 billion by 2030.
EU imports apparel worth $195 billion annually where cotton apparel accounts for $89 billion or 46 per cent and MMF & blended apparel $102 billion or 52 per cent.
According to RAPID, of the $55 billion Bangladesh’s global merchandise exports in FY23, $25 billion or 45 per cent was sourced from the EU. Bangladesh has been the second largest apparel exporter in the EU since 2012.
The share of apparel export from Bangladesh to the EU is just 2.9 per cent of its imports. Apparel accounts for around 92 per cent of Bangladesh’s exports to the EU.
Abdur Razzaque said there is a large market for MMF exports within the RMG sector in the European market. But for this, it should be seen that the GSP plus benefits are ensured during the post-LDC era.
While speaking as the chief guest, State Minister for Planning Shamsul Alam said that the government is trying to diversify exports. “As part of it, export earnings from jute, jute goods, pharma and electronics etc. products has reached $1 billion in FY23.”
