"Even a 30 percent cash incentives will not be able to help the industry survive unless the illegal huge imports come to an end," Bangladesh Textile Mills Association (BTMA) Chairman MA Awal told the news agency in Dhaka after a meeting on the textile industry.

The meeting of the FBCCI Standing Committee on Textile, Specialised Textile and Backward Linkage Industries observed that Islampur and Babu Bazar clothing hubs in Dhaka, as also other places in the country, are getting inundated with an import glut of fabrics, mainly from China and India.

The fabrics from China are being imported through under-invoicing and those from India are coming either through smuggling conduits or misdeclaration such as 4-5 truckloads of fabrics coming against an invoice for one-truck imports through land ports, Awal said.

He said the recent pressure on foreign exchange is an outcome of under-invoicing, as importers pay the rest of the import value to the exporters through diverting hard-earned foreign currencies using hundi, an illegal way of money transfer.

"This malpractice is being done in connivance with a section of customs officials," said the industry leader, who is also the chairman of the standing committee of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

Growth of the woven sub-sector of the country''s clothing industry is being hampered due to such underhand dealings, he observed.

"We can be self-sufficient in woven textiles like the knit sub-sector in only three years if the malpractice is removed as well as the government announces an incentive package for the industry similar to those in neighbouring countries," he said.

The meeting also reviewed the incentive package in Pakistan and India, including interest rates on bank loans for textiles at 3.5 percent in Pakistan and 6 percent in India.

Textile entrepreneur Mohammed Harun Ur Rashid described a horrendous picture of under-invoicing, saying the shirting fabrics of US$1.20 per meter on Chinese market are being imported at an invoiced price of 20 to 25 US cents while suiting fabrics of US$2.5 per meter imported at 40-50 cents.

"The rest of the import value is being paid through hundi," he said.

Bangladesh Daily Star