EU regulates the origin of regulations annoys Bangladeshi fabricators

The textile industry in Bangladesh is subject to the EU's relaxation of regulations on the origins of underdeveloped countries such as Bangladesh.

Bangladesh proposes that domestic fabric manufacturers should increase their productivity, improve the quality of their products, and increase production efficiency to the extent that the EU has relaxed the negative impact on the textile sector caused by the origin regulations.

The EU's new rules of origin have remained from January 1, 2011, which guarantees the export of garment exporters from underdeveloped countries to EU-27 countries with tax-free access, even if they purchase fabrics from other countries.

With the relaxation of EU rules of origin, Bangladeshi garment manufacturers began importing fabrics from other countries, such as China, and imported from other countries were lower than their purchase prices from the local market.

Therefore, in the first quarter of the current fiscal year, exports of ready-made garments to the EU rose sharply. At that time, the European Union’s decision had a negative impact on local fabric sales, especially woven fabrics.

A major garment manufacturing unit is reluctant to purchase fabrics from domestic suppliers, but instead imports the same fabrics from foreign countries at a lower price, which has led to the inability of the domestic fabric industry to grow at a faster rate.

The EU’s early rules of origin have for many years formed a protective umbrella for the domestic textile industry in Bangladesh, which requires that if garment manufacturers want to enjoy duty-free exports to the EU, they have to purchase the main part of the fabric from local textile units.

It can be argued that no industry can be permanently sheltered. Although Bangladesh's backward continuous industry has been sheltered since the 1990s, it is time for the fabric industry in Bangladesh to increase its self-reliance and increase its competitiveness.

It can be argued that when their products have competitive prices, Bangladeshi garment manufacturers will start buying fabrics from domestic producers. Therefore, local fabric manufacturers need to seize this opportunity to increase their productivity, increase efficiency, and improve the quality of their products.