The Bangladesh Government is mulling strict regulations pertaining to the eligibility criteria for cash incentives provided to apparel makers who depend on raw materials supplied by their buyers.
Media reports claimed this citing an unnamed central bank (Bangladesh Bank) official and went on to add at present, garment exporters determine the value addition by deducting the cost of production, including purchases from local markets and profit margins, from the export proceeds excepting the freight costs even as with the planned regulation, garment makers who receive fabrics and other raw materials from buyers and export the finished product, will now be subject to a revised calculation of their value addition.
Further, to qualify for cash incentives, the value addition should be at least 20 per cent.
It may be mentioned here, apparel exporters in Bangladesh procure various items such as poly, printing, cartons, and labels from local markets even if they get incentives only when value addition from their end is at least 20 per cent, including profits and labour wages.
