Germany is fast catching up with the US as the leading destination of Bangladesh's garment products on the back of higher demand and duty benefits.Last fiscal year, Bangladesh’s garment exports to Germany were up 19.02 percent year-on-year. In contrast, garment exports to the US showed an increase of just 3 percent over fiscal 2012-2013.
The reason for the spike in ordersis that German retailers are diverting their custom from China, where production costs are escalating.Furthermore Bangladesh’s exporters enjoy duty-free access to the European Union -- of which Germany is a part -- owing to the Generalised System of Preferences scheme introduced in 1971, a privilege not enjoyed in the American market.
In the absence of any duty benefits, garment exporters pay 15.61 percent duty upon entry to the US market.Around 828 million dollars was paid to the US customs last year and 3.41 billion dollars over the last five years.
Bangladesh however expects orders from the US to rise as well in the coming days, given the clean chit given to the majority of the factories following inspections. Retailers are coming with higher volume of work orders.Garment exports to the US are tipped to pick up with the rebounding American economy.
