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Smuggled textiles drive wit local products from markets

By Shahiduzzaman Khan
Widespread smuggling of fabrics and textiles poses threat to country's textile see tor. The producers are facing acute marketing problem due to depressed demand for the local products.
The glut of foreign fabrics and yarns which sell at a lower price has driven out local products from the markets.
Textile circles say. about 80 per cent of the specialised textile mills and power looms have already been closed. The government has failed to support the local textile Industries. the sources say.
Smuggled textiles, coming through bonded warehouse as By Shahiduzzaman Khan duty-free items for use in the garments industry. sell cheaper In the local markets compared to the locally produced ones. The local industries are burdened with high rates of customs and excise duty, energy cost and high interest on bank loans.
Local entrepreneurs say. 25 per cent of the total cost is earmarked for raw materials import. 40 per cent for meeting the interest of bank loans. 20 per cent for customs and excise duties. 10 per cent for energy consuption and five per cent for load-shedding.
The specialised textile sector got a tremendous boost from 1982 to 1984. During the third Five-year Plan. 33.600 power looms were set up throughout the country against an expected growth of 25.000 looms. Investment in the sector is around Tk 550 crore to Tk 600 crore so far.
Textile circles say the country has the capacity of producing 300 crore metres of fabrics annually, while total demand in the country is 70 crore metres. If all the units function normally, it is possible to earn Tk 4,000 crore in foreign exchange a year.
Nearly 95 per cent of the specialised textile mills comprise mostly of 20 looms. These small industries. Idcntl fted as the backbone of the textile sector, were established since 1982 as a result of government's industrialisation policy to encourage the sector.
After the growth of export oriented garments industry, duty-free fabrics continued to make inroads into the country A conservative statistics say at least 30 crore metres fabrics are being smuggled into the country through various means. Excess fabrics are being brought which are regularly marketed in Dhaka city and elsewhere in the country. Is lampur is the main point wherefrom foreign fabrics are channelled throughout the country at regular Interval, the sources say
Many locally produced fabrics can compete with the imported ones but the gar ment industry owners are not ready to buy it as profits from back-door sales of the im ported fabrics are too high, the sources say.
The Specialised Textile Mills Owners Association executives say the local mills can definitely manufacture common types of fabrics which are used in the garments industry Pocketing, interlining and sheeting cloth, manufactured locally, are of high quality and there is no justification of importing these fabrics, for use tn the garments industry, they said.
They said due to high tariff costs, the local fabrics could not be sold at a cheaper rate compared to duty-free garment materials. If they are allowed to supply 10 crore metres of fabrics to the garments industry out of 90 crore metres now being imported for the garments industry, an amount of Tk 300 ernre in foreign exchange could be saved. Fresh employment generation and social services could be ensured in the country, they added