Country's ready-made garments (RMG) exporters have demanded allocation of Tk 20.0 billion (2,000 crore) as soft-loan with minimum interest for constructing infrastructure to shift their factories from residential areas to garment villages or city outskirts, reports BDNEWS.
'RMG sector requires this fund to relocate their factories and meet the compliance issues," Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said in its pre-budget proposal for 2006-2007 fiscal to the finance division.
After a series of disasters in recent years and non-compliance practices in the country's garment factories, buyers and importing countries are creating pressure to ensure the social, labour and industrial compliances. As ensuring these standards is obligatory, especially in the post-MFA (multi-fibre arrangement) period, relocation of the factories is necessary, BGMEA sources said.
For relocating their factories, many RMG industries, which have to construct new infrastructure, will need duty-free import of building materials like iron, steel, MS rod, aluminium etc, said the BGMEA in its pre-budget proposal for the next fiscal to the National Board of Revenue (NBR).
NBR and BGMEA would hold discussion on the proposal next week, sources said.
BGMEA also referred to the same facility, earlier provided to the export processing zone (EPZ) units and said, 100 per cent export-oriented RMG industries, located outside EPZs should be allowed same duty-free facility for importing their materials.
In view of the need for upgrading safety and security standard and fire-prevention, import of items like fire-extinguisher, hose-pipe, smoke detector, charge torch as well as sewing and cutting machines, their spare parts, boiler machines etc should also be duty-free for RMG industry, they added.
The BGMEA also demanded continuation of cash subsidy facilities for the next fiscal and to allow the tax holiday facility to cover all the factories. Currently, a five per cent cash subsidy is given to the export-oriented textile factories. The provision of this facility will expire by June 30 of this year, while tax holiday by June 2008.
Currently over 4,000 knitwear factories are operating in the country. The export of the woven grew by 8.35 per cent to fetch over $2.615 billion in the July-February of the current fiscal, which is 40 per cent of the total export value.