Opinion of trade bodies sought on the issue of establishing central bonded warehouse

by Apparel Resources News-Desk

22-May-2019  |  2 mins read

Bangladesh Garment Industry
Image Courtesy: asia.nikkei.com

Raw material and lead time are amongst two major concerns for the garment makers in Bangladesh.

Dependent to a large scale on overseas destinations for raw materials like fabrics and accessories, apparel makers face the challenge of establishing efficient and dependable sourcing channels, without which sticking to delivery deadlines (for finished garments) is an uphill task, more so in today’s age of fast fashion.

Chittagong-based Bond BD Ltd., as such, had been pursuing the revenue board for permission to set up a central bonded warehouse. In its application, Bond BD Ltd. maintained they would import raw materials and stock at their warehouse from where exporters could procure raw materials so that the export-oriented industries could reduce lead time in export as raw materials would be readily available.

In connection with the same, Bangladesh’s National Board of Revenue (NBR) has sought opinions from trade stakeholders, mainly trade bodies and exporters, on the idea of establishing central bonded warehouse for the export-oriented industries.

The customs export and bond wing of the NBR has recently requested the trade bodies including Federation of Bangladesh Chambers of Commerce and Industry, Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, to provide their opinions in writing on the central bonded warehouse system.

This follows as per recommendations made by stakeholders at a meeting on the issue held in March. At the March meeting, some stakeholders reportedly expressed some apprehensions and sought clarity on certain aspects of this facility like risk of monopoly, how many organisations will get the licence, whether or not both export-oriented and local industries will get the benefits, what products will enjoy duty benefits, how the licence holders will make profits from the business, etc.

The NBR as such has decided to sit with the stakeholders after getting their opinions in writing, while assuring that it would not make any decision against the exporters, who are the main users of the system.

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