INTERNATIONAL TRADE OF BANGLADESH and IT

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INTERNATIONAL TRADE OF BANGLADESH &

IT’S IMPACT ON ECONOMY
Chapter: 1
1.1 BACKGROUND OF THE STUDY
Trade is an integral part of the total developmental effort and national growth
of all economies including Bangladesh. It particularly plays a central role in
the development plan of Bangladesh where foreign exchange scarcity
constitutes a critical bottleneck. Export trade can largely meet foreign
exchange gap, and export growth would increase the import capacity of the
country that, in turn, would increase industrialization, as well as overall
economic activities. Bangladesh’s import needs are substantial; hence the
need to rapidly increase exports is immediate. In order to finance the imports
and also to reduce the country’s dependence on foreign aid, the Government
of Bangladesh has been trying to enhance foreign exchange earnings through
planned and increased exports. However, the global trade scenario has
exposed structural limitations of the Bangladesh economy, posing a variety of
challenges for the country that has under developed technology and a low
capital base. In the process, we examine Bangladesh’s export and import
performance compared to various countries, regions and the world over the
years. We also discuss the sources of Bangladesh’s imports and directions
of Bangladesh’s exports and the dynamic changes over the years, and
highlight the trends of export and import shares to GDP and trade balance
positions.
1.2 OBJECTIVES OF THE STUDY
This paper has been prepared from the corner of two objectives are as
follows:
1.2.1 Primary objective
 To give a concrete idea about the export and import activities of

Bangladesh through presenting different products.
 To know the overall performance of export and import and their
balance as well as to find the positive or negative impact on our
economy.
1.2.2 Secondary Objective
 To know the various terms of export and import.
IBAIS University, Dhaka, Bangladesh Page 2

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 To know the present, past and potential or future trading of

Bangladesh.
 To know the balance of trade of Bangladesh.
 To know the challenges facing Bangladesh in exporting and importing
products and services at present and recent.
It is known to all that, importing more goods and services than exporting for
an economy have continuous bad effect on its real growth. On the other
hand, study of export and Import of international business provides a greater
learning opportunity about varieties terms, policies, rules of export and import,
products, opportunities as well as the paths for business expansion
throughout the world for maximizing profit. We strongly hope that our paper
will provide lot accurate and useful information that will help those who want
to get an idea on export and import condition of Bangladesh.
1.3 SPECIFIC PURPOSE OF THE STUDY
In this Term Paper, we have discussed the composition, performance,

growth, impact and trends of foreign trade of Bangladesh. This paper has
been made to show the main purpose that is as follows:
 To fulfill partial requirements of course completion of the International

Business.
 To obtain a strong knowledge that will help to work on business at
international level in future.
1.4 RATIONALE & SIGNIFICANCE OF THE STUDY
There are many factors that discourage local companies from going
international and taking their goods across the world. But the benefits of
international trading far outweigh its disadvantages. The global village is
growing even closer, and this has made exporting a big business that grows
exponentially every year, and benefits from improved logistics and
communication channels. Business can gain some long lasting benefits from
international trade. Importing and exporting goods can help to broaden our
horizons in the following ways:
Trading our products internationally can give us an advantage over
competition. If the domestic market is already flooded with similar products,
then overseas markets may just be the answer to better profitability. This

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holds especially true for products that aren’t widely available overseas. As
the international market for our good gets bigger, sales increase, giving us
an advantage over others in our industry.
Companies engaging in international trade experience improved efficiency
brought on by the presence of economies of scale in production. This can
bring about significant trade gains due to the reallocation of resources that
can raise productive efficiency. Simply put, more output can be created at
lower costs bringing about major savings. International trade can give us the
opportunity to understand the varied market trends that can affect our
business. It is common business saying that 95% of a company’s
prospective market is situated out of the country. And it just won’t be wise
to forego such a huge potential for business, leads, profits and thus
business growth. So, the function of international trade is to capitalize on
profitable opportunities for owners, which is the single most significant
directive for corporations and many other businesses. For business concerns
that offer season specific services or products, expanding operations to
overseas is a perfectly viable way of staying busy and making money all
year around. And staying in business all year round is a great way of
outmaneuvering competitors.
International trade can introduce a company to whole new foreign markets.
Spreading risk in foreign markets and companies means that organization
won’t only be subjected to the tribulations of the Bangladesh economy. This
diversification can shield their businesses from the investment risk of putting
all their eggs in one basket. Similarly, international traders are also ideally
poised to take advantage of the higher than usual potential for growth of
some foreign economies. It is important to do our research right to find the
right emerging markets for our kind of businesses. Of course, it is also
important to balance these advantages against the likelihood for high costs
and abrupt changes that are the special risks of investing internationally.
International trade holds many benefits for those who are willing to put in
the extra effort. As websites such as Export promotion Bureau Bangladesh
make it obvious, importing organizations are eager to make their
infrastructures available to new trading partners on a global scale, which is a
sure sign that the time is ripe to explore new opportunities.
1.5 FUTURE SCOPE OF THE STUDY
It is very known that, international Business is considered as a big path for

bringing a revolutionary change in a countries economy as well as world. It

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may have some scope in variety of ways for various users, persons or
groups. The study is specifically focused on the exporting and importing
different products and its effect on the economy.
o This report will render a close past theoretical look at the export and
import that have been changed over time and may be used as
historical data to decide for making future action.
o The study will also help to know the reasons behind of growth of
export in different sector and also together increasing import of
Bangladesh.
o The study will help to know the reasons of imbalance trading and its
effect on economy at the time.
o The study will help us to gather knowledge about the kinds of
products & services are exported or imported from different countries.
o It will assist to know the major products of exporting and importing
are performed by bangladesh.
1.6 METHODOLOGY OF THE STUDY
1.6.1 Data Collection
This research is basically descriptive in nature and from the secondary

sources. Keeping the background and the specific objectives in mind, related
available information have been collected through mainly secondary sources
during the process which is utilized for finding useful information on trading
of Bangladesh.
1.6.2 Sources of primary data: Not available in this term paper.

1.6.3 Sources of Secondary Data
o Official websites of Central bank of Bangladesh.

o Official websites of commerce ministry as well as concerned websites
of government and its agencies. ( see references)
o Financial Journals.
o Bangladesh Business Portals.
o Varieties Financial and Economic Magazines.
o Others websites related with finance trading, economics and banking
industry of international and domestic level. ( See references)

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1.7 LIMITATIONS OF THE STUDY
The paper has focused mainly on limited items of exported and imported
products of Bangladesh. Some limiting factors were faced while conducting
process for preparing the report. These factors are as follows:
o Particularly as we full time job holder so, time was really critical factor
for us to accomplish this report.
o We could not gather whole information of trading of given products
equally standard from the prospect of export and import.
o We have found it so critical to summarize information from different
sources because of some lack of understanding to this process though
tried best with our level.
o We have found some data and information (year of 2011 as well as
2012) to the different websites dissimilar from commerce ministry of
Bangladesh government which has led us to be confused on some
particular term of trading of Bangladesh internationally. However, we
have included data, information, table and all graphical presentation from
the most reliable sources like websites of Bangladesh government, World
Bank, WTO, IMF, DCCI, EPB and so on.

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Chapter >2: Literature Review

2.1 World Trade organization in International Trading
International trade has truly expanded to encompass most of the world over
the past century. The countries of the world have seen that everyone can
benefit from specializing in the production of a certain good or set of goods
and by having skilled workers that provide services to others. This trade off
in strengths and weaknesses help get some commodities to locations that
would otherwise be unable to attain goods or services that they need. The
world of trading between countries is ever changing with the advancement in
technology that becomes available to countries.
The importing and exporting of goods across the globe is regulated by the
World Trade Organization (WTO). This, like many other organizations have
multiple benefits and drawbacks for the parties involved beyond practical
application of rules and policies. One major benefit of the WTO is that they
allow for trading on neutral ground allowing neither of the parties involved to
obtain an unfair advantage during the trade agreement process. Any disputes
that arise between two or more trading parties are also handled by the WTO
which is also a benefit of having the organization in place. The organization
itself acts as a mediator or referee of sorts when it comes to the process of
trade between nations across the globe. This type of organization also has
drawbacks when it comes to certain real world application in certain aspect.
Nothing is perfect but again some of its approaches to policy are only really
beneficial in theory. It seems as if the WTO organizations method of
operation is business focused with little care as to the effects its agreements
have on the populous of the countries involved.
Four key points defined in the international trade simulation are the
 Production possibility frontier.

 Opportunity cost.
 Absolute advantage.
 Comparative advantage.
The production possibilities frontier is a curve that measures the maximum
combination of two products from a given number of available resources and
current technology. If a company was in business producing laptop computers
and HD television sets the resources are the workers, conveyer machinery,
and other materials for production. The production possibilities frontier would

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depict a specified quantity produced if all resources were used to produce

only laptop computers on one end of the frontier and the specified quantity
produced if all resources were used to produce only HD television sets on
the other side of the frontier. Associated points and quantities would be
plotted accordingly as the total quantity of one product varies to produce the
other. All combinations plotted on the frontier are attainable maximizing the
resources available. As more of one product is manufactured less of the
other product is produced. The opportunity cost of production is the highest
valued alternative that must be forgone to engage in the production of
another product. The opportunity cost of laptop computers to HD television
sets would be the number of laptop computers that can be produced by not
producing HD television sets. In some instances an individual, firm, or
company can produce more of a good or service than their competitors using
the same goods and services, which is known as absolute advantage.
To maximize profits and production, countries should specialize in the
production and export of commodities that it can produce at a lower
opportunity cost than other countries, which is called comparative advantage.
This includes importing commodities produced at a lower opportunity cost in
other countries, which would increase overall GDP for all countries involved.
In maximizing comparative advantage the opportunity cost concept can be an
accurate approach because comparative advantage changes with the increase
or decrease in technology or skill in labor because of this continual measure
of the countries abilities should be maintained. Over time a nation’s
workforce will change, and thus the goods and services that a nation
produces and exports will change. Nations that train their workers for future
roles can minimize the difficulty of making a transition to a new, dominant
market.
The simulation focused on trade policy and the terms of trade. The terms of
trade can influence the ratio comparing export prices to import prices, the
terms of trade as it is related to current accounts and the balance of
payments. If a country's exports prices rise by a rate greater than that of its
total imports, then the terms of trade have improved. Increasing the terms of
trade begets an increased demand for a country's exports, thus, resulting in
rising revenues from their total exports, which in turn increases demand for
the country's currency, which increases is value via law of supply and
demand. (Van Bergen). If the price of exports rises by rate smaller than
that of its imports, the currency's value will decrease in relation to its trading
partners. Throughout the simulation one had to negotiate the terms and
evaluate the impact these terms were going to have the on the GDP, but it

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also would have affected the value of the currency. Terms of trade however
depend on many factors during negotiation, primarily the stability of both the
government and the economy. Political and economic stability also play
important factors. Foreign investment seeks out countries with a strong
economy and a stable government in which to invest their capital. It is
making the safe bet to place their capital in a stable environment than an
unstable one. If a country is perceived to become or be unstable, these
investments are pulled out, thus reducing that economy’s access to capital,
making funds scarce and devaluing their currency (Van Bergen). However if
the investment is strong, then the currency becomes strong as more
countries demand access to it via investment. One of the decision factors
whether to open a Free Trade agreement was based on the factor of
countries stability. With one country, maintaining a robust economy paired
with a stable democratic government and the other an unstable agrarian
economy with a loosely organized and frequently shifting political environment.
It was a safe decision on the behalf of Roadmap to select the stable
country to open a free trade agreement as this would create a safer bet to
withhold as much impact on both the home country and Roadmap currency.
The World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between nations. The WTO has
many trade topics, such as tariffs. Customs duties on merchandise imports
are called tariffs. Tariffs give a price advantage to locally produced goods
over similar goods, which are imported, and they raise revenues for
governments. The WTO allows countries to negotiate trade on neutral ground;
they help lower trade barriers and open markets for trade. Communication is
difficult between countries; the WTO also solves this by interpreting contracts
so both parties understand, and have a successful relationship. The WTO
has helped increase trade and will continue to do so in the future.
The simulation of the country of Roadmap tested the knowledge we have
attained pertaining to international trade. This demonstrated how even one
decision can change the face of trade between two countries and how each
country can benefit from exchanging goods with one another to help fill in
where one country may be weak. We learned how tariffs can affect imports,
exports, and the balance of trade. This simulation shows the direct link
between an international trade decisions by a country and how it will affect
its outcome financially as well as any future interaction with that country. The
result of this simulation is that there is always going to be change when
dealing with trade issues with other countries. There will be up and down
times that each country will face when attempting to trade a good or service

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with another country. The World Trade Organization has been implemented to
help countries grow their economies by importing and exporting of goods.
The bottom line in making any decision when deciding what to trade with
another country is to compare how the items being traded are equaling out
to one another. This is comparative advantage and must be monitored
continuously over time due to changes in the availability of goods,
commodities, and the workers a country may have available.
2.2 Definition of Export and Import
The idea of trade between nations has been around for centuries. It began
with trade routes for silk, spices, and other commodities. It later began to
include seafaring trading such as cocoa from Central and South America
being sent to Europe. Today the world of trade includes anything that a
person can conceive: grains, cotton, tobacco, spices, services, components
for making a good, and the list go on. The individual countries must weigh
every option and angle that is present when entering into a trade deal with
other countries. Bangladesh economy has passed through a heightened pace
of global integration in the 1990s. The degree of openness of the
Bangladesh economy is now higher than many developing countries though
international trade of Bangladesh is extremely small relative to the size of its
population.
"Foreign demands for goods are produced by home country". In national
accounts "exports" consist of transactions in goods and services (sales,
barter, gifts or grants) from residents to non-residents. A general
delimitation of exports in national accounts is given below:
An export of a good occurs when there is a change of ownership from a
resident to a non-resident; this does not necessarily imply that the good in
question physically crosses the frontier. However, in specific cases national
accounts impute changes of ownership even though in legal terms no change
of ownership takes place. Export of services consists of all services
rendered by residents to non-residents. In national accounts any direct
purchases by non-residents in the economic territory of a country are
recorded as exports of services; therefore all expenditure by foreign tourists
in the economic territory of a country is considered as part of the exports of
services of that country. Also international flows of illegal services must be
included. National accountants often need to make adjustments to the basic
trade data in order to comply with national accounts concepts; the concepts

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for basic trade statistics often differ in terms of definition and coverage from
the requirements in the national accounts:
Statistical recording of trade in services is based on declarations by banks to
their central banks or by surveys of the main operators. In a globalized
economy where services can be rendered via electronic means. Basic
statistics on international trade normally do not record smuggled goods or
international flows of illegal services. A small fraction of the smuggled goods
and illegal services may nevertheless be included in official trade statistics
through dummy shipments or dummy declarations that serve to conceal the
illegal nature of the activities.
"Imports" consist of transactions in goods and services (sales, barter, gifts
or grants) from non-residents residents to residents.
A general delimitation of imports in national accounts is given below: An
import of a good occurs when there is a change of ownership from a non-
resident to a resident; this does not necessarily imply that the good in
question physically crosses the frontier. However, in specific cases national
accounts impute changes of ownership even though in legal terms no change
of ownership takes place. Imports of services consist of all services rendered
by non-residents to residents. In national accounts any direct purchases by
residents outside the economic territory of a country are recorded as imports
of services; therefore all expenditure by tourists in the economic territory of
another country are considered as part of the imports of services. Also
international flows of illegal services must be included. Basic trade statistics
often differ in terms of definition and coverage from the requirements in the
national accounts: Statistical recording of trade in services is based on
declarations by banks to their central banks or by surveys of the main
operators. In a globalized economy where services can be rendered via
electronic means. Basic statistics on international trade normally do not record
smuggled goods or international flows of illegal services. A small fraction of
the smuggled goods and illegal services may nevertheless be included in
official trade statistics through dummy shipments or dummy declarations that
serve to conceal the illegal nature of the activities. Like many other third-
world countries, Bangladesh relies quite heavily on exports to provide for the
needs of its densely populated nation. The same products sold locally will
generally fetch a much lower price than they would on the international
market. This means that it is far more profitable for the country to engage in
exportation than it is to engage in local trade. While this may mean that a
large percentage of the country’s GDP is sent off abroad as Bangladesh

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exports instead of being enjoyed by the country’s own people, it also allows
for a steady influx of foreign currency. Currently Bangladesh’s main export
items are garments, jute and jute-related goods, leather, frozen fish and
seafood. Just three years ago the country made over $2,000 billion from
export trade. The majority of the country’s trade is conducted with the USA
but a small portion of exports also sees its way to Germany, the UK,
France and Italy. However these figures should not mislead you into thinking
that the country is well-off. As one of the poorest and most densely
populated countries in the world, the majority of these profits will generally
make their way into the pockets of a few wealthy while the rest will be
thinly spread out amongst those involved in the production of these goods.
To add to this, the country’s economy depends on an erratic monsoon cycle
as well as drought and flooding which makes regular harvesting difficult.
Besides these Bangladesh exports, the country is also engaged in the
production of rice, tea, sugar wheat, ship scrap metal, textiles, fertilizer,
pharmaceuticals, ceramic tableware and newsprint. Though yields can at
times be quite high, the country still faces widespread poverty and it is
struggling to free itself from this. Some progress has been made, but there
are still many people living below the breadline in Bangladesh.
2.3 How to Measure the Effects of Export and Import on the Economy
According to the expenditures method of calculating gross domestic product,

an economy’s annual GDP is the sum total of C + I + G + (X – M),
where C, I and G represent consumer spending, capital investment and
government spending, respectively. While all those terms are important in the
context of an economy, let’s look closer at the term (X – M), which
represents exports minus imports, or net exports. If exports exceed imports,
the net exports figure would be positive, indicating that the nation has a
trade surplus. If exports are less than imports, the net exports figure would
be negative, and the nation has a trade deficit. Positive net exports
contribute to economic growth, something that is intuitively easy to
understand. More exports mean more output from factories and industrial
facilities, as well as a greater number of people employed to keep these
factories running.
The receipt of export proceeds also represents an inflow of funds into the
country, which stimulates consumer spending and contributes to economic
growth. Conversely, imports are considered to be a drag on the economy, as
can be gauged from the GDP equation. Imports represent an outflow of
funds from a country, since they are payments made by local companies

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(the importers) to overseas entities (the exporters).However, imports per se

are not necessarily detrimental to economic performance, and in fact, are a
vital component of the economy. A high level of imports indicates robust
domestic demand and a growing economy. It’s even better if these imports
are mainly of productive assets like machinery and equipment, since they will
improve productivity over the long run. A healthy economy, then, is one
where both exports and imports are growing, since this typically indicates
economic strength and a sustainable trade surplus or deficit. If exports are
growing nicely but imports have declined significantly, it may indicate that the
rest of the world is in better shape than the domestic economy. Conversely,
if exports fall sharply but imports surge, this may indicate that the domestic
economy is faring better than overseas markets.
The U.S. trade deficit, for instance, tends to worsen when the economy is
growing strongly. The country’s chronic trade deficit has not impeded it from
continuing to be one of the most productive nations in the world. But a
rising level of imports and a growing trade deficit do have a negative effect
on a key economic variable – the level of the domestic currency versus
foreign currencies, or the exchange rate.
2.4 Effect of Exchange Rates
The inter-relationship between nation’s imports and exports, and its exchange
rate, is a complicated one because of the feedback loop between them. The
exchange rate has an effect on the trade surplus (or deficit), which in turn
affects the exchange rate, and so on. In general, however, a weaker
domestic currency stimulates exports and makes imports more expensive.
Conversely, a strong domestic currency hampers exports and makes imports
cheaper.
Let’s use an example to illustrate this concept….
Consider an electronic component priced at $10 in the U.S. that will be

exported to Bangladesh. Assume the exchange rate is 50 Taka to the U.S.
dollar. Ignoring shipping and other transaction costs such as import duties for
the moment, the $10 item would cost the Bangladeshi importer 500 Taka.
Now, if the dollar strengthens against the Bangladeshi Taka to a level of
55, assuming that the U.S. exporter leaves the $10 price for the component
unchanged, its price would increase to 550 Taka ($10 x 55) for the
Bangladeshi importer. This may force the Bangladeshi importer to look for
cheaper components from other locations. The 10% appreciation in the dollar

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versus the Taka has thus diminished the U.S. exporter’s competitiveness in
the Bangladeshi market. At the same time, consider a garment exporter in
Bangladesh whose primary market is the U.S. A shirt that the exporter sells
for $10 in the U.S. market would fetch her 500 Taka when the export
proceeds are received (again ignoring shipping and other costs), assuming
an exchange rate of 50 Taka to the dollar. But if the Taka weakens to 55
versus the dollar, to receive the same amount of Taka (500), the exporter
can now sell the shirt for $9.09. The 10% depreciation in the Taka versus
the dollar has therefore improved the Bangladeshi exporter’s competitiveness
in the U.S. market.
To summarize, a 10% appreciation of the dollar versus the Taka has
rendered U.S. exports of electronic components uncompetitive, but has made
imported Bangladeshi shirts cheaper for U.S. consumers. The flip side of the
coin is that a 10% depreciation of the Taka has improved the
competitiveness of Bangladeshi garment exports, but has made imports of
electronic components more expensive for Bangladeshi buyers. Multiply the
above simplistic scenario by millions of transactions, and we may get an
idea of the extent to which currency moves can affect imports and exports.
Countries occasionally try to resolve their economic problems by resorting to
methods that artificially depress their currencies in an effort to gain an
advantage in international trade. One such technique is “competitive
devaluation,” which refers to the strategic and large-scale depreciation of a
domestic currency to boost export volumes. Another method is to suppress
the domestic currency and keep it at an abnormally low level. This is the
route preferred by China, which held its Yuan steady for a full decade from
1994 to 2004, and subsequently allowed it to appreciate only gradually
against the U.S. dollar, despite having the world’s biggest trade surpluses
and foreign exchange reserves for years.
2.5 Effect of Inflation and Interest Rates
Inflation and interest rates affect imports and exports primarily through their
influence on the exchange rate. Higher inflation typically leads to higher
interest rates, but does this lead to a stronger currency or a weaker
currency? The evidence is somewhat mixed in this regard. Conventional
currency theory holds that a currency with a higher inflation rate (and
consequently a higher interest rate) will depreciate against a currency with
lower inflation and a lower interest rate. According to the theory of
uncovered interest rate parity, the difference in interest rates between two
countries equals the expected change in their exchange rate. So if the

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interest rate differential between two nations is 2%, the currency of the
higher-interest-rate nation would be expected to depreciate 2% against the
currency of the lower-interest-rate nation. In reality, however, the low-
interest-rate environment that has been the norm around most of the world
since the 2008-09 global credit crisis has resulted in investors and
speculators chasing the better yields offered by currencies with higher interest
rates. This has had the effect of strengthening currencies that offer higher
interest rates. Of course, since such “hot money” investors have to be
confident that currency depreciation will not offset higher yields; this strategy
is generally restricted to stable currencies of nations with strong economic
fundamentals. As discussed earlier, a stronger domestic currency can have
an adverse effect on exports and on the trade balance. Higher inflation can
also affect exports by having a direct impact on input costs such as
materials and labor. These higher costs can have a substantial impact on
the competitiveness of exports in the international trade environment.
2.6 Economic Reports of Trade Balance
A nation’s merchandise trade balance report is the best source of information

to track its imports and exports. This report is released monthly by most
major nations. The U.S. and Canada trade balance reports are generally
released within the first 10 days of the month, with a one-month lag, by
the Commerce Department and Statistics Canada, respectively. These reports
contain a wealth of information, including details on the biggest trading
partners, the largest product categories for imports and exports, trends over
time, etc.
2.7 Breaking down the Balance Of Trade
The balance of trade is the difference between a nation’s export and its
imports. A crucial point to note is that both goods and services are counted
for exports and imports, as a result of which a nation has a balance of
trade for goods (also known as the “merchandise trade balance”) and a
balance of trade for services. The net or overall figure forms the balance of
trade or “trade balance,” a major contributor to a country's economic well-
being. A nation has a trade surplus if its exports are greater than its
imports; if imports are greater than exports, the nation has a trade deficit.
2.8 Trade Data – Census Basis and BOP Basis
While data on a nation’s exports and imports of physical goods can be

collated from customs documents such as export declarations and import

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manifests, this is not possible for trade in intangible services. The latter is
therefore compiled based on the flow of funds, the foundation on which
balance of payments (BOP) trade statistics are based. Therefore, data on
merchandise trade is available based on both custom-based trade statistics
and BOP, while data on services is only available on a BOP basis.
For example, in the U.S., statistics on exports and imports are compiled by
the Commerce Department’s Bureau of Economic Analysis (BEA) and
released in a monthly report. The BEA collates information on exports from
exporters electronic export information (EEI) that have been submitted to the
U.S. Automated Export System (AES). Exporters submit this export
information to the U.S. Census and also to U.S. Customs and Border
Protection. Similarly, import data is compiled from documents collected by the
U.S. Customs and Border Protection pertaining to goods that have arrived in
the U.S. from foreign countries. The BEA adjusts the goods total on a
census basis to bring the data in line with the concepts used to prepare
national and international accounts. The BOP-basis data derived in this
manner enables goods trade numbers to be summed with services trade
figures to arrive at a more accurate picture of overall U.S. trade, goods and
services.
2.9 Distinguishing Between a Service Export and Import
Statistics for trade in services are derived from the BEA’s estimates of
service transactions between foreign countries and the U.S., based on
periodic surveys and partial information from monthly reports. The BEA
provides export and import data on services in a number of categories travel,
passenger fares, royalties and license fees, transfers under U.S. military
sales contracts (only for exports), and direct defense expenditures (only for
imports). While the distinction between an export and import of a physical
good is readily apparent, it is not as clear for a service. Here, the flow of
funds determines whether a service transaction qualifies as an export or an
import, depending on whether it is a debit transaction that results in a
payment or outflow of funds, or a credit transaction that results in a receipt
or inflow of funds. So, for instance, fares received by U.S. carriers from
foreign residents for travel between the U.S. and foreign countries, or
between two points overseas, would show up on the export side of the trade
balance for services. Likewise, fares paid by U.S. residents to foreign
carriers would show up on the import side of the trade balance for services.
2.10 Factors That Affect Trade Balance

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Numerous factors affect a country’s trade balance. These include:

Trade policies: Nations that are insular and have restrictive trade policies
such as high import tariffs and duties may have larger trade deficits than
countries that have open trade policies, since they may be shut out of
export markets because of these impediments to free trade.
Exchange rates: A domestic currency that has appreciated significantly may
pose a challenge to the cost-competitiveness of exporters, who may find
themselves priced out of export markets. This may pressure a nation’s trade
balance.
Foreign currency reserves: To compete effectively in extremely competitive
international markets, a nation has to have access to imported machinery
that enhances productivity, which may be difficult if forex reserves are
inadequate.
Inflation: If inflation is running rampant in a country, the price to produce a
unit of a product may be higher than the price in a lower-inflation country.
This would affect exports, affecting the trade balance.
2.11 Use Trade Balance as an Economic Indicator
The utility of trade balance data as an economic indicator depends on the

nation. The biggest impact is generally seen in nations with limited foreign
exchange reserves, where the release of trade data can trigger large swings
in their currencies. The trade data is usually the largest component of the
current account, which is closely monitored by investors and market
professionals for indications of the economy's health. The current account
deficit as a percentage of GDP, in particular, is tracked for signs that the
deficit is becoming unmanageable and could be a precursor to a devaluation
of the currency. However, a temporary trade deficit may be viewed as a
necessary evil, since it may suggest that the economy is growing strongly
and needs imports to maintain the growth momentum. Trade data is also
parsed to see which trading partners are contributing to the overall surplus or
deficit. In June 2013, for example, the U.S. had a trade deficit of $26.6
billion with China, bringing its year-to-date deficit with the Asian giant to
$147.7 billion. In contrast, the trade deficit with Canada – the biggest trade
partner of the U.S., accounting for 16.8% of total trade in the first half of
2013 – was only $1.6 billion, for a YTD deficit of $15.5 billion.

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China’s enormous trade surplus with the U.S. may lead to renewed calls for
the nation to revalue its Yuan, which critics opine is being held artificially
low to stimulate exports U.S. trade data occasionally affects the greenback,
which in turn has an impact on commodity prices because of the negative
correlation between the two (stronger dollar causes weaker commodity prices
and vice versa). These moves often result in volatility in Canada’s TSX
Composite index, which has a heavy weighting in commodities. In general,
market watchers appear more concerned with trade deficits than trade
surpluses. This may be because chronic deficits often trigger steep currency
devaluation, leading to severe repercussions for the local economy as the
higher interest rates that are used to prop up the currency take their toll. In
summer of 2013, the currencies of India and Indonesia slumped 14% in
just over two months as investors focused on nations with large trade and
current account deficits. While India’s foreign currency reserves grew in leaps
and bounds after the economic reforms of the 1990s, rising gold imports in
2013 led to widening trade deficits, causing the Indian government to take
measures to restrict gold imports.
2.12 The Bottom Line
The balance of trade is a key indicator of a nation’s health. Trade balance

data is available on a census / customs basis and BOP-basis for goods,
and only on a BOP-basis for services. In general, investors and market
professionals appear more concerned with trade deficits than trade surpluses,
since chronic deficits may be a precursor to currency devaluation.
2.13 Conclusion
Imports and exports exert a major influence on the consumer and the
economy directly, as well as through their impact on the domestic currency
level, which is one of the biggest determinants of a nation’s economic
performance.
Chapter: 3: An Overview Of Bilateral Trade Among SARCC Nation’s

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The trade is called the exchange of goods between two countries. Bilateral
trade agreements give preference to certain countries in commercial
relationships, facilitating trade and investment between the home country and
the foreign country by reducing or eliminating tariffs, import quotas, export
restraints and other trade barriers. Bilateral trade agreements can also help
minimize trade deficits.
3.1 Bangladesh in Regional and Bilateral Trade
1. Asia Pacific Trade Agreement (APTA)

2. BIMSTEC Trade Negotiating Committee (TNC) meeting
3 SAARC Preferential Trading Arrangement (SAPTA)
4 AARC Preferential Trading Arrangement (SAPTA)
5 The Agreement on South Asian Free Trade Area (SAFTA)
6 SAARC Framework Agreement on Trade in Services (SAFAS)
7 Bilateral FTA with India, Pakistan and Sri Lanka
8 Standing Committee for Economic and Trade Cooperation (COMCEC)
9 Standing Committee for Economic and Trade Cooperation (COMCEC)
10 Trade Preferential System Among the OIC Members (TPS-OIC)
11 Preferential Trade Agreement (PTA) among D-8 Countries (D-8)
12 Bangladesh Foreign Trade Institute (BFTI)
13 International Trade Centre (ITC)
14 International Trade Centre (ITC)
15 United Nations Conference on Trade and Development (UNCTAD)
16 United Nations Economic and Social Commission for Asia and the
Pacific (UNESCAP)
17 Canadian International Development Agency (CIDA)
18 European Commission (EC)
[The tables have been given below to show the position of Bangladesh in
export and import among its partners from SAARC countries that include
historical data from 1998 to 2011. (Not found data of 2012 and 2013)]

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3.2. Bangladesh-Bhutan Bilateral Trade

Value in Million Taka (Value in Million US $)
Year Export Import Trade Ratio

1999-00 40.50 (0.80) 220.60 (4.38) 1 : 5.47
2000-01 63.64 (1.18) 305.10 (5.65) 1: 4.79
2001-02 91.37 (1.57) 225.00 (3.92) 1: 2.50
2002-03 91.17 (1.57) 18.90 (2.74) 1: 1.74
2003-04 172.54 (2.93) 330.20 (3.35) 1: 1.14
2004-05 287.95 (4.65) 528.30 (8.60) 1:1.84
2005-06 101.74 (1.52) 784.00 (11.68) 1: 7.68
2006-07 96.60 (1.40) 689.30 (9.98) 1: 7.39
2007-08 92.61 (1.35) 942.50 (13.73) 1:10.18
2008-09 42.09 (0.61) 836.50 (12.12) 1:19.87
2009-10 154.96 (2.24) 8289 (11.98) 1: 5.35
2010-11 222.48 (3.12) 1325.5 (18.58) 1: 5.95
Major Export Items:

Knitwear, Melamine, Woven Garments, Biscuits, Jute Manufacture,
Footwear etc.
Major Import Item:
Live animals, Vegetables Products, Mineral Products, Prepared food stuffs,,
beverages, Plastic and articles thereof, Boilers Machinery and mechanical
appliances etc.
Source:
Export Statistics, EPB and Bangladesh Bank & Import Statistics, Bangladesh
Bank

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3.3 Bangladesh-India Trade

1998-99 2870.14(59.74) 59350.90(1234.93) 1: 13
1999-00 3264.11(64.88) 41889.00(832.62) 1: 19
2000-01 3329.49(62.28) 63887.20(1183.39) 1: 17
2001-02 2865.96(50.28) 58109.82(1019.47) 1: 20
2002-03 4868.23(84.08) 78453.50(1352.64) 1: 16
2003-04 5261.57(89.27) 94438.20(1602.27) 1: 18
2004-05 8869.13 (144.19) 124646.30 (2042.06) 1: 14
2005-06 16262.13(241.96) 125330.00(1864.74) 1: 8
2006-07 19969.98(289.43) 156636.00(2268.11) 1: 8
2007-08 24564.29(358.08) 232138.60(3383.94) 1:9
2008-09 18391.95 (274.26) 186093.00 (2863.19) 1:10
2009-10 21074 (304.62) 159586 (3202.8) 1:10.5
2010-11 36040 (512.51) 320659 (4560) 1:8.9
3.4 Major Export Items in 2008-09 (In million US $):
Chemical fertilizer, Pharmaceutical products and other chemical products
(72.89), Raw jute (29.36), Frozen Food (35.47), Agri-products
(11.31), Jute goods (48.76), Woven garments and Knitwear (10.34)
etc.
3.5 Major Import Items in 2007-08 (In million US $):
All types of cotton, cotton yarn/thread and cotton fabrics (611.08);
Cereals (813.93); Mineral fuels, mineral oils and products of their
distillation, bituminous substances and mineral waxes (164.30); Boilers,
machinery and mechanical appliances, parts thereof (147.75); Vehicles
other than railway or tramway-rolling stock and parts and accessories
thereof (147.01); Iron and Steel (106.50); Residues and waste from
the food industries, prepared animal fodder (121.03), Edible vegetables
and certain roots and tubers (130.00); Plastic and rubber (74.97);
Man-made staple fibers (59.43); Organic Chemicals (85.38); Electrical
machinery and equipment (62.27); Aluminums and article thereof
(39.15); Paper & paper board (27.90 etc.
Source: Bangladesh Bank

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3.6 Bangladesh - Maldives Trade
Value in Million Taka

2004-05 0.48 0
2005-06 0.02 0
2006-07 0.27 0
2007-08 0.08 0
2008-09 0.14 0
2009-10 0.74 0.86 1:1.16
2010-11 0.93 1.44 1:1.55
3.7 Bangladesh - Nepal Trade

2000-01 108.38(2.01) 352.20(6.53) 1: 3.24
2001-2002 168.04(2.92) 191.80(3.34) 1: 1.14
2002-03 190.91(3.29) 320.90(5.54) 1: 1.68
2003-04 150.36(2.55) 242.80(4.12) 1: 1.61
2004-05 290.81(4.74) 105.20(1.71) 1: 0.36
2005-06 305.00(4.55) 180.60(2.69) 1: 0.59
2006-07 58.592 (0.848) 411.7 (5.96) 1:7.02
2007-08 460.16 (6.70) 3632.8 (52.95) 1:7.90
2008-09 604.06 (8.78) 4728.5 (68.73) 1:7.82
2009-10 556.8 (8.78) 2984.3 (43.13) 1:4.91
2010-11 773 (10.84) 3455.8 (48.46) 1: 4.47
Major export items from Bangladesh to Nepal in 2004-05 (Value in
million Tk)
Pharmaceutical Products (0.23), Fertilizer (1.33), Textile and Textile

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article (2.40), Electrical machinery and equipment (0.53) etc.

Major import items into Bangladesh in 2004-05 (Value in million Tk)
Edible Vegetable and certain roots and tubers (0.92), Residues and
waste from food industries (0.21), Cereals (0.32) etc.
Information Source: EPB & Bangladesh Bank.
3.8 Bangladesh - Pakistan Bilateral Trade

1996-97 1659.20(38.97) 2872.40 (67.26) 1: 1.72
1997-98 2026.67(44.67) 3638.34(80.03) 1: 1.79
1998-99 1829.47(38.13) 3979.00(82.79) 1: 2.17
1999-00 1597.34(31.75) 4212.10 (83.72) 1 : 2.64
2000-01 1715.00(32.08) 5142.38(95.30) 1: 2.97
2001-02 1642.50(28.60) 3866.00(67.32) 1: 2.35
2002-03 1857.00(31.51) 5331.70(92.08) 1: 2.92
2003-04 2659.68(45.11) 6637.80(112.62) 1: 2.49
2004-05 3942.35(64.09) 8578.00(139.46) 1: 2.21
2005-06 2880.71(57.74) 10072.90(149.87) 1:2.60
2006-07 4243.05(61.06) 12983.80(188.00) 1: 3.08
2007-08 4871.27(71.01) 16393.50(238.97) 1: 3.36
2008-09 5243.25(76.21) 19840.00(280.37) 1: 3.67
2009-10 5373.14 (77.67) 22393.56 (323.7) 1:4.16
2010-11 6103.07 (86.79) 4765.17 (669.3) 1:7.71
3.9 Major export items (Value in million US$) (2008-09)
Raw jute (45.81); Tea (9.16); Chemical Products (2.88); Agree-

products (3.16), Jute goods (3.18) etc.
3.10 Major import items (Value in million US$) (2007-08)
Cotton (129.73); Cereals (8.95); Sugar and sugar confectionery

(31.89) Manmade filament (4.49), Manmade staple fibers (11.42)
,Special woven (5.35), Knitted or crocheted fabrics (2.54); Machinery
and mechanical appliances (8.74), Chemical products (11.87) etc.
3.11 Bangladesh - Srilanka Trade

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1999-00 238.76(4.77) 420.20(8.35) 1 : 1.75
2000-01 141.37(2.62) 431.00(7.98) 1: 3.04
2001-02 118.88 (2.07) 352.60(6.10) 1:2.94
2002-03 217.49(3.76) 462.30(7.98) 1: 2.12
2003-04 610.42(10.35) 578.87(9.82) 1: 0.94
2004-05 683.11(11.11) 631.60(10.29) 1:0.93
2005-06 888.81(13.25) 728.30(10.86) 1: 0.82
2006-07 1023.47(14.82) 1131.10(16.37) 1: 1.10
2007-08 1325.35(19.32) 1047.20(15.26) 1: 0.78
2008-09 1283.56(18.67) 1276.70(18.57) 1: 0.99
2009-10 1642.33(23.74) 1574.8(22.76) 1: 0.95
2009-10 1642.33(23.74) 1574.8(22.76) 1: 0.95
2010-11 2476.5 (34.73) 1966.4 (27.57) 1: 0.79
3.12 Major export items in 2008-09 (value in million US$):
Chemical products (7.63), Jute goods (1.12), Agri-products (0.66),
Knitwear (3.02), Woven garments (1.02) etc.
3.13 Major import items in 2008-09 (value in million US$) :
Chemicals Products (5.09), Plastic and plastic products (0.53), Rubber
and rubber products (0.59), Cotton (2.83), Man-made filament
(1.23), Transport equipment, electric and machinery equipment etc.
Sources: Export Statistics, EPB &Bangladesh Bank, Import Statistics, Bangladesh Bank

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3.14 Growth of Bilateral Trade
Bangladesh registered a ten percent rise in its exports to India, a latest

report shows. Exports to the largest neighbor India were $302 million in
2009-10 when better trade ties were discussed at the level of the prime
ministers in January. Exports to other neighbors barely account for 2.7
percent of the total, touching $431 million, New Age newspaper said quoting
the government's Export Promotion Bureau's Evaluation Survey. Remaining
almost static over the year, exports to Pakistan were worth $78 million.
Exports to Nepal increased by 9 percent to $8.8 million, to Bhutan by 72
percent to $2.2 million, to Myanmar by 9 percent to $10 million and to Sri
Lanka by 26 percent to $24 million. Exports to the Maldives increased
almost five folds to $0.7 million but exports to Afghanistan declined by 37
percent to $3.7 million.

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Chapter 4: All about Exports
Exports measure the amount of goods or services that domestic producers

provide to foreign consumers by. It is a good that is sent to another country
for sale. In the past, export of commercial quantities of goods normally
required involvement of the customs authorities in both the country of export
and the country of import. More recently, with the advent of small trades
over the internet such as through Amazon and e-Bay, exports have largely
bypassed the involvement of Customs in many countries due to the low
individual values of these trades. Nonetheless, these small exports are still
subject to legal restrictions applied by the country of export.
4.1 Bangladesh Exports
Exports in Bangladesh increased to 2590.20 USD Million in September of

2013 from 2013.40 USD Million in August of 2013. Exports in
Bangladesh are reported by the Bangladesh Bank. From 1995 until 2013,
Bangladesh Exports averaged 3238.0 USD Million reaching an all time high
of 15565.2 USD Million in June of 2009 and a record low of 1024.0
USD Million in October of 2009. Bangladesh exports mainly readymade
garments including knit wear and hosiery (75% of exports revenue). Others
include: Shrimps, jute goods (including Carpet), leather goods and tea.
Bangladesh main exports partners are United States (23% of total),
Germany, United Kingdom, France, Japan and India.

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Figure: 1
4.2 Major Product - Wise Export of Bangladesh
Amounts in Million US$
Products 2009-10 2010-11 (July-April)

Raw Jute 196 357
Agri-Products 242 334
Frozen Foods 445 625
Leather 226 298
Jute Goods 592 758
Chemicals 103 105
Specialized Textiles 186 165
Home Textiles 402 789
Footwear 204 298
Knitwear 6483 9482
Woven Garments 6013 8432
Others 1113 1281
Total 16205 22924
Table No : 1
4.3 Exported Products by Category
Sl Category
1 Agar Products/Agar Wood
2 Agricultural Equipments
3 Animal Casing
4 Agricultural Equipments-1
5 Aluminums Products
6 Artificial Flowers
7 Audio & Video (CD, VCD, DVD, VCR, Paper, Magazine)
8 Automobile Products

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9 Ball Pen
10 Bamboo Products
11 Basket Ware
12 Batik Items
13 Battery (Auto)
14 Battery Dry cells
15 Beach Chair
16 Bees Wax
17 Betel Leaves & Nut
18 Bi-Cycle
19 Biscuits
20 Blade
21 Blazer And Coats
22 Blouses, Ladies Shirts & Fashion
23 Books & Periodicals
24 Brass Products
25 Bricks
26 Broom Sticks
27 Cables
28 Candles
29 Cane Products
30 Canned Fruits
31 Canned Fruits
32 Canvas Shoes
33 Carbon Rod
34 Carpet Backing Cloth
35 Carpet
36 Carton
37 Cement Exporters
38 Cement
39 Ceramic Products
40 Chemical Products

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41 Computer Paper
42 Condensed Milk
43 Copper Wire
44 Cotton Waste
45 Cosmetics
46 Cotton Bags
47 Crabs
48 Crushed Bone
49 Cut Flower
50 Data Entry
51 Dehydrated
52 Door Shutter
53 Dry Fish
54 Dry Foods
55 Electrical Products
56 Espadrilles
57 Embroidery
58 Fan
59 Feathers
60 Fertilizer
61 Fish Maws
62 Fish Meals
63 Fishing Net
64 Flush Door
65 Food Products
66 Footwear & Leather Goods
67 Footwear
68 Fresh Fish
69 Fresh Fruits & Vegetables
70 Fruit Juices
71 Furniture
72 G I Pipe

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73 Galantine
74 Gift Items
75 Glass Products
76 Gloves
77 Grey Fabrics
78 Hand Bags
79 Hand Made Paper
80 Handicrafts
81 Handloom Products
82 Hanger
83 Herbal Medicine
84 Hessian Cloth
85 Home Textiles-Specialized Textiles Exporter
86 Honey
87 Hooves
88 Human Hair
89 Jam & Jelly
90 Jamdani Sharee
91 Jewelers
92 Jute Backing Cloth
93 Jute Braid
94 Jute Goods
95 Jute Mat
96 Jute Shoes
97 Jute Yarn & Twine
98 Jute Shopping Bag
99 Kitchen Ware
100 Knitwear
101 Leather (Crust & Finished)
102 Leather Garments
103 Leather Products
104 Light Engineering Products

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105 Home Textiles-Specialized Textiles Exporter

106 List Of Firms Approved By EU
107 List Of Knitwear Exporters
108 List Of Oil Cake Manufacturers
109 List Of Readymade Garments Exporters
110 List Of Tea Exporters
111 List Of The Members Firm Of Bffea_Usa
112 Luggage, Toys & Fashion Products
113 Marine Fish
114 Matches
115 Meat & Meat Products
116 Medical Equipment
117 Melamine Products
118 Metal Products
119 Molasses
120 Mosquito Net
121 Ms Pipe
122 Mushrooms
123 Muslin
124 Nakshi Katha
125 Naphtha
126 Newspaper
127 Newsprint
128 Oil
129 Orchid-Plants
130 Paper Board
131 Particle Board
132 Pharmaceuticals
133 Pink Pearl
134 Plastic Products
135 Plastic Sheets
136 Plywood

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137 Poly Bags

138 Potato Flakes
139 Potato
140 Pottery
141 Poultry Feed
142 Poultry
143 Printing Materials
144 Processed Fruits
145 PVC Cables
146 PVC Pipes-PVC Products
147 Quilt
148 Raw Cotton
149 Raw Jute
150 Readymade Garments-1
154 Refr Actory Bricks
155 Refrigerator
156 Rice
157 Rubber
158 Sanitary Ware
159 Seed
160 Sewing Thread
161 Shark Fins
162 Shark Meat
163 Shell Products
164 Shopping Bags
165 Shrimps
166 Silk Fabrics
167 Silk Sharee
168 Soap (Toilet)

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169 Socks, Vest, Rompers, Stuffed Toys, Quilts

170 Soft Drinks
171 Software & It Service
172 Spices
173 Sports Shoes
174 Stationary Products
175 Sugar
176 Tapestry
177 Tarpaulins
178 Tea
179 Telecommunication
180 Television
181 Tent
182 Terry Towel
183 Textile Fabrics
184 Tiles
185 Timber
186 Tissue Paper
187 Tobacco
188 Tooth Brush
189 Transformer
190 Travel Bags
191 Twill
192 Tyre
193 Umbrella
194 Ups
195 Watch
196 Wooden Products
197 Yarn

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4.4 Trend-in-Export-Trade and Product-Wise Structural Change over 4

Decades
4.4.1 Export from Bangladesh 1972-73 to 2008-2009
Trend-in-Export-Trade (In product & market)

1972-73 2008-2009 Growth
No. of Product 25 173 592%
No. of Market 68 197 190%
Total Export 348 15565 4373%
Table : 2
4.4.2 Export by Major Products of the year 1992-93
4.4.3 Export by Major Products of the year 2002-03

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4.4.4 Export By Major Products ( Upper one)
4.4.5 Major Importing Countries of Bangladesh Exportable During 1990-91-up
4.4.6 Major Importing Countries of Bangladesh Exportable During 2008-09

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4.5 Market share of major export products (2006-2007)

01. Woven Garments 38.25%
02. Knitwear 37.39%
03. Frozen Food 4.23%
04. Jute Goods 2.63%
05. Leather 2.18%
06. Raw Jute 1.21%
07. Chemical Products 1.77%
08. Tea 0.06%
09. Other 12.28%
4.6 Regional Market Share (2006-2007)
01. European Union (E-U) 52.26%
02. American Region 32.74%
03. Asian Region 8.52%
04. Middle East Region 2.75%
05. African Region 0.64%
06. Oceania Region 0.25%
07. East European Region 0.35%
08. Other 2.19%
4.7: Year of 2009-10
01. Woven Garments 37.11%
02. Knitwear 40.01%
03. Frozen Food 2.73%
04. Jute Goods 4.86%
05. Leather 1.40%
06. Agri Products 1.50%
07. Eng. Products 1.92%
08. Footwear 1.26%
09. Other 9.21%
Figure : 2 & 3 Below ( Next page)

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01. European Union (E-U) 52.3%
02. American Region 33.3%
03. Asian Region 8.8%
04. Middle East Region 2.5%
05. African Region 0.6%
06. Oceania Region 0.3%
07. East European Region 0.3%
08. Other 1.8%
Table : 3

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4.8 Export Chart Data at a Glance
Chart: 1

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4.9 Bangladesh exports to several countries of the world
Name of the Countries

Ecuador, France, Germany, Ghana, Hungary, India, Australia Afghanistan,
Thailand, Syria, Singapore, Russia, Sudan, Togo, Taiwan, UAE. Nepal &
Malaysia.
Mexico, Indonesia, Japan, Jordan, Mozambique, Korea, Lebanon Brazil,
Tanzania, South Africa, Spain, Sweden, Philippines, New Zealand,
Cambodia, Kosovo, Bhutan, & UK.
Myanmar, Canada, Colombia, Norway, Djibouti, Iran, Netherlands, USA,
Venezuela, Zimbabwe, Ukraine, Georgia, Pakistan, Sri-Lanka, Vietnam,
Kenya, Yemen & Hong Kong.
4. 10 : A brief overview of a Single Major Exported product-RMG
1950 was the beginning of R.M.G in the Western World. In order to

control the level of imported RMG products from developing countries into
developed countries, the Multi Fiber Agreement (MFA) was made in 1974.
The MFA agreement imposed an export rate 6 percent increase every year
from a developing country to a developed country. In the early 1980s
Bangladesh started receiving investment in the RMG sector. Some
Bangladeshis received free training from the Korean Company Daewoo. After
these workers came back to Bangladesh, many of them broke ties with the
factory they were working for and started their own factories. But most of
the RMG entrepreneurs are the genuine patriot and started from grass root
level who contributing in boosting of country economy.
Although Bangladesh is not developed in industry, it has been enriched in
Garment industries in the recent past years. In the field of Industrialization
garment industry is a promising step. It has given the opportunity of
employment to millions of unemployed, especially innumerable uneducated
women of the country. It is making significant contribution in the field of our
export income. History of our cloth Industry: Once the cloth of Bangladesh
achieved worldwide fame. Muslim and Jamdani cloth or our country was
used as the luxurious garments of the royal figures in Europe and other
countries. The ready-made Garment (RMG) sector has started its journey
in the late 1970s in Bangladesh. However, Bangladesh experienced a real

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momentum in RMG sector between the mid-1980s and mid-1990s

(Robbani 2000). The first garment factory in Bangladesh (the then East
Pakistan) was established in 1960 at Dhaka (Islam 1984). Bangladesh
started exporting garments in 1976. The first joint venture garment factory
in Bangladesh was Desh garment in association with Daewoo, a South
Korean company (Rock, 2001).
Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
were formed in 1982 to protect the interests of the manufacturers and the
exporters of RMG sector. Imposing of “Quota” restrictions on Bangladeshi
products by UK, France, Canada and USA in 1985 was a critical
challenge towards the growth of this sector (Uddin, 2006). Following the
General Agreement on Tariff and Trade (GATT) introduction of the Multi-
fibre Arrangement (MFA) allowed the use of quota restriction (Siddiqi,
2005), which facilitated the growth and expansion of garment industry.
Over the years, RMG sector has experienced a remarkable export growth.
RMG share is the total export increased from 12.44 percent in 1984-
1985 to 60.64 percent in 1992-1993 (Siddiqi 2005). At present, RMG
sector is the single largest source of earning foreign exchange in
Bangladesh. Table 1 shows the trends and exports of major export products
of Bangladesh RMG sector has faced some challenges such as cleaning
all internal inefficiencies, managing port effectively, building backward and
forward linkages, diversifying product lines and searching for new markets
due to the phasing out of MFA in 2005 (Robbani 2000).
One of the weaknesses of the RMG sector in Bangladesh is its heavy
dependence on imported raw materials due to inefficient backward linkage
(Siddiqi 2005). The component of backward linkage includes weaving the
fabric, spinning the yarn, and dyeing, printing and finishing operation
(Siddiqi 2005). The development of backward linkage has been getting
high priority in the post-MFA regime for achieving self-sufficiency in the
area of input production for reducing cost and lead-time. Developing
backward linkage refers the control over the supply of inputs of RMG
industry like fabric, yarn and processing facilities (Siddiqi 2005). The ratio
of gross export earnings from woven wear and knitwear has increased from
100:34 in FY1997 to 100:98 in FY2007, which ensures the structural
change in export earnings (Rahman, Bhattacharya, and Moazzem 2008).
Interestingly, the total export of RMG sector in Bangladesh has increased
after the MFA phase out, as shown in Table 2. Bangladesh, despite being

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a least developed economy, has a proven record in export competitiveness.

Here is a summary of the facts. From 2003 to 2007 Bangladesh achieved
annual export value growth of 19.6%, a testimony to its export
competitiveness. Whilst not wishing to be complacent, and being mindful of
difficult global trade conditions in 2008-2010, these positive trade
differentials are likely to be with Bangladesh well into the future. From
spinning to weaving, from knitwear to leisurewear and high street fashions,
the textiles and clothing industry is Bangladesh’s biggest export earner with
value of over $ 16 billion of exports in 2009-10. Our factories design
and produce for the world’s leading brands and retailers. This rapidly
growing sector of the Bangladeshi economy offers a unique competitive edge
that supports profitable expansion into new strategic markets.
The ready-made garment (RMG) sector has experienced an exponential
growth since the 1980s. The sector contributes significantly to the GDP. It
also provides employment to around 4.2 million Bangladeshis, mainly
women from low income families which affect their social status.
 Manufacturing output has seen steady growth, recently in double
figures. Bangladesh provides significant benefits to exporters.
 Bangladesh offers a most liberal FDI regime in South Asia, with no
prior approval requirements or limits on equity participation and
repatriation of profits and income in most sectors.
 Bangladesh enjoys tariff-free access to the EU, Canada, Australia and
Japan. Bangladesh is the top manufactured products exporter to the
least developed countries as well as to Europe, with more than 50%
market share.
4.11 Key Statistics of RMG Products
RMG EXPORTS AND IT'S SHARE IN TOTAL EXPORT OF BANGLADESH
Total Export Of
Export Of RMG % Of RMG's To
Year Bangladesh
(In Million Us$) Total Export
(In Million Us$)
1983-84 31.57 811.00 3.89
1984-85 116.2 934.43 12.44
1985-86 131.48 819.21 16.05
1986-87 298.67 1076.61 27.74
1987-88 433.92 1231.2 35.24
1988-89 471.09 1291.56 36.47
1989-90 624.16 1923.70 32.45

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1990-91 866.82 1717.55 50.47

1991-92 1182.57 1993.90 59.31
1992-93 1445.02 2382.89 60.64
1993-94 1555.79 2533.90 61.40
1994-95 2228.35 3472.56 64.17
1995-96 2547.13 3882.42 65.61
1996-97 3001.25 4418.28 67.93
1997-98 3781.94 5161.20 73.28
1998-99 4019.98 5312.86 75.67
1999-00 4349.41 5752.20 75.61
2000-01 4859.83 6467.30 75.14
2001-02 4583.75 5986.09 76.57
2002-03 4912.09 6548.44 75.01
2003-04 5686.09 7602.99 74.79
2004-05 6417.67 8654.52 74.15
2005-06 7900.80 10526.16 75.06
2006-07 9211.23 12177.86 75.64
2007-08 10699.80 14110.80 75.83
2008-09 12347.77 15565.19 79.33
2009-10 12496.72 16204.65 77.12
2010-11 (July-Sep) 3971.52 5029.05 78.97
Data Source Export Promotion Bureau Compiled by BGMEA
Table: 4
4.12 Main Apparel Items Exported From Bangladesh (m US$)
Year Shirt Trouser Jacket T-shirt Sweater
2005-06 1,056.69 2,165.25 389.52 1,781.51 1,044.01
2006-07 943.44 2,201.32 1,005.06 2,208.90 1,248.09
2007-08 915.6 2,512.74 1,181.52 2,765.56 1,474.09
2008-09 1000.16 3,007.29 1,299.74 3,065.86 1,858.62
2009-10 993.41 3035.35 1350.43 3145.52 1795.39
Table: 5 Source: Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
4.13 Sector Highlights
 Cost and quality of products that are produced on time, reliably and

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very competitively with a highly skilled labor force.

 A unique regional location for expansion into key Eastern and other
markets.
 Favored trading status with the EU and the USA.
 Clusters of companies providing a local supplier base with real depth
in skilled labor, training and technical development facilities. The
growing demands for yarn in the local market, comparatively low cost
of doing business, lucrative incentive packages and a favorable
investment policy regime are important reasons for investment in this
sustainable sector.
4.14 RMG and Backward Linkages
The phenomenal growth in the readymade garment (RMG) sector in the

last decade created many new factories and employment opportunities.
Having enjoyed more than 70% of total investments in the manufacturing
sector during the first half of the 1990s, RMG and knitwear now account
for about 4,825 factories and a workforce of 3.1 m -80% of which are
women. This sector now employs over 50% of the industrial workforce and
accounts for 79% of the total export earnings of the country. The growing
trend in the textile and the garments sector means that Bangladesh is
perfectly positioned to appeal to foreign investors.
4.15 Size of Bangladesh Textile Industry
No. of Installed machine Production

Sub-sector Manpower
unites capacity capacity (m)
7.20 ml. spld

Textile spinning 341 1,600 kg 400,000
0.18 ml. rotor
Textile weaving 400 25,000 SL/SLL 1,600 mtr 80,000
Specialized textile and

1,065 23,000 SL/SLL 400 mtr 43,000
power loom
Handloom (GF/F) 148,342 498,000 handloom 837 mtr 1,020,000
Knitting, knit dyeing (GF):
(a) Export-oriented 800 12,000 knit/Dy/M 3,600 mtr 300,000
(b) Local market 2,000 5,000 knit/M 500 mtr 24,000

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Dyeing and finishing (FF):
(a) Semi-mechanized 180 - 120 mtr 10,000
(b) Mechanized 130 - 1,600 mtr 23,000
Export oriented RMG 4,500 - 475 doz 2,000,000
Source: Director's Report 2009, Bangladesh Textile Mills Association

4.16 Favored Trading Status
Bilateral agreements with 28 countries and Generalized System of

Preferences (GSP) of the EU are key reasons for Bangladesh RMG
products having access to global markets. The current cycle of GSP applied
from 1 January 2009 to 31 December 2011. Bangladesh is now a
significant RMG supplier to North America and Europe. Bangladesh has also
taken a better position in the USA market through competition. Bangladesh
is expected to maintain its tariff-free access to EU under the European
GSP, since the GSP is not covered by the Uruguay Round Agreement.
Recently Canada has also provided tariff-free access for all the items from
Bangladesh. Meantime, the Bangladesh RMG industry has become very
competitive as a global standard RMG source. Marketing investments have
been made in trading partner economies; end users can often differentiate
products with confidence. Historically the Bangladesh RMG industry has
depended largely on imported yarns and fabrics and produced only 10% of
the export-quality cloth used by the garments industry. The need for
establishment of backward-linkage industry has become an immediate
concern to the government and the exporters and there are enormous
opportunities to set up a composite textiles industry combining textile, yarn
and garments.
4.17 Export earning hits record $3b in July

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The country’s single month export earnings hit a record $3 billion in July,
the first month of the financial year 2013-14, riding on the performance of
readymade garment sector that defied factory disasters, Export Promotion
Bureau officials said. Provisional data from the EPB, which was sent to the
commerce ministry for approval on Sunday, showed that the export earnings
totaled $3,024.29 million in July, growing by an impressive 24 per cent
compared with the same period last fiscal year.
The export earnings figure of July in financial year 2012-13 was $2.4
billion with 4.26 per cent growth. The EPB vice-chairman Shuvashish Bose
told New Age on Tuesday that export crossed $3 billion because of
impressive performance by the readymade garment sector. Even after the
tragic incidents at Tazreen Fashions and Rana Plaza, the export earnings of
July proved that Bangladesh has not lost its competitiveness in the RMG
sector,” he said. Export earnings growth has been on an upward trend in
the last three months with the earning standing at $2.53 billion in May and
2.69 in June, the two months of the previous FY 2012-13.EPB officials
could not immediately give the data on RMG export earnings but said that
the export growth of the sector was double digit and higher than that of the
earnings of June of FY 2012-13. The total export earnings from RMG
sector in June was over $2.1 billion. The country’s export in the just
concluded FY 2012-2013 was $27.01 billion, growing by 11.18 per cent
from the previous FY, whereas the government set the export earnings
target for the current FY 2013-14 at $30.50 billion with a growth of
12.84 per cent.
The total RMG export in FY 2012-13 grew by 2.73 per cent to $21.51
billion in the FY 13 from $19.08 billion in the FY 12. Garment industry

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people and many of the experts, however, were shaky about achieving the
target for FY 2013-14 against the backdrop of Rana Plaza collapse that
killed more than 1,100 garment workers in April. The Rana Plaza incident
and the Tzaneen Fashions fire that killed 113 workers in November, 2012
created an international outcry over the factory safety standard in the
country. Bangladesh Garment Manufacturers and Exporters Association
leaders earlier said that the international buyers were putting less order in
Bangladesh following the Rana Plaza incident while the impact of the
building collapse would be seen in the export figure in September-October.
[Note: we could not find the data of the month of September-October in the website of EPB.]
4.18 Present Challenges in RMG Sector
Garment industry in Bangladesh is facing multi-dimensional problems such

as acute power crisis followed by non tariff restriction, chronic labor unrest,
lack of infrastructural facilities, inadequate supply of material and
accessories, inability or lack of efforts to diversify the products and markets,
irregularities relating to customs, bond, and shipping (Uddin and Jahed
2007). These major problems disrupt the production and increase the cost
of production significantly. Weak and inadequate infrastructures such as poor
energy supply, poor port facilities are the common challenges facing by the
RMG sector in Bangladesh (Rahman and Anwar 2007). Another problem
is port congestion. RMG sector often faces huge losses due to the
inefficiency of Bangladesh port. To remain competitive in the world market
one of the important strategies is product and market diversification
(Rahman and Anwar 2007). Moreover, natural calamity often affected
garment industry. For instance, due to the flood in 1998, garment order of
Tk 1,000 (US$ 15,000 million) crore could not be exported on time.
More than 3 lakh workers were victim of the flood (Quddus and Rashid
1999). There are some other disadvantages that affect the competitiveness
of RMG sector. Hartals (Strike due to political reason) and inadequacy of
infrastructural facilities undermine Bangladesh’s position in the international
market (Abdullah 2005a). Furthermore, the productivity of Bangladeshi
workers is one-fourth of that of Chinese. The main reason is low literacy
rate. Only 25 unions are active among 200 unions registered in the
garment sector. Local experts report that only 20 percent of workers receive
the minimum legal wage for all hours including overtime (Clark and Kanter
2010/2011). Empirical studies have proved that any expenses for
improving working condition are offset by the productivity gains in the case
of RMG sector (Berik and Rodgers 2008). RMG exports are also

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influenced by external factors. For instance, after the terrorist attract on

September 11, 2001, export to the United states declined by 2.34 percent
in 2003 and 13.04 percent in the middle of 2004 (Abdin 2008). The
post-MFA trade environment has created a dual challenge to Bangladesh:
firstly, Bangladesh has needed to access raw materials at a competitive
price and also RMG sector is now competing with hitherto restricted
countries in a quota-free environment (Bhattacharya and Rahman 2001).
Handling charge for a 20-feet container in Chittagong port was $640
compared with $220 in Colombo and $360 in Bangkok (World Bank
1999).
Inefficiencies of Chittagong port are costing the economy as much as $600
million annually (World Bank 1999). From opening of letters of credit to
the clearance of goods from customs involves several complicated and time-
consuming steps (World Bank 1999). The hidden costs (bribe) paid by
importers per delivery ranged from Tk.4700 to Tk.36800 (about US$100
to $735) (CPD Survey 1997). These inefficiencies and corruption
adversely affect competitiveness of Bangladeshi garment in the world market
(Robbani 2000).
Bangladesh must address a number of challenges if it is to continue current
strong development in garment exports, according to a new report from The
World Bank. Shortcoming in trade logistics, skill shortage and the
requirement to fulfill with government labor standards could all hamper future
development in garment exports from the Asian country, says the report,
'Consolidating and Accelerating Exports in Bangladesh.’ It suggests that
better export diversification beyond clothing is needed – garments account
for more than 75% of Bangladesh’s exports – but adds that, still in the
garment industry, export increase is not to be taken from established.
Bangladesh is deeply dependent on exports make driving in the
manufacturing division, to afford high efficiency and high-income jobs – all
envisioned in the country’s Sixth Five-Year preparation. Lead country
economist at The World Bank, Sanjay Kathuria said:
“While China’s wage growth presents main opportunities for countries with
less costly labor, Bangladesh will need to beat significant bottlenecks to
make sure that its exports keep on to grow at the pace seen over FY05-
10, when dollar exports almost doubled,” The World Bank said the sooner
export increase would be “critical” to Bangladesh achieving the rank of
growth required to reach its ambitious goal of appropriate a middle-income
country by 2021.

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“The garments sector of Bangladesh has grown-up remarkably and captured

a rising share of the world market”. The World Bank said. “But
development in exports cannot be taken for granted. Second only to China,
Bangladesh’s garment exporting sector will need to participate with the
impact of an already huge base and major market share in key markets.”
Exports can grow quickly, the report suggests, but only if “critical
bottlenecks” are addressed – the first of which is the provision of successful
trade logistics. Improvements in this region would give the country a
“competitive frame”, ensuring that exports and imported input goods are
shipped on time, economically and reliably. Better connections, enhanced
customs dealings, better air shipment ability and better rail services could
reduce lead times to complete an order by up to 21 days, the report
estimates, still if raw materials are sourced from out of the country. In the
meantime, it warns that Bangladesh’s skills gap is “increasingly visible in all
manufacturing sectors, and maybe more so in the garment sector”, where it
reports a high refusal rate for final goods.
Finally, the details highlight the importance of industry complying with the
Bangladeshi government’s labor and building standard – an ever further
main issue as the country attempts to move into higher-value garment
exports. Investigate the need for the government to work closely & directly
with industry to make sure standards are correctly implemented, The World
Bank said firms might also require support to rearrange factories out of
residential areas and into purpose-built facilities with safer working
environment. The RMG sector has economic contribution as well as social
contribution in Bangladesh. It has created employment opportunities for about
five million people including young, poor and illiterate women. However,
recently the RMG sector is going through severe disturbances. The clashes
between garment workers and law enforcers create serious crisis in this
industry (Islam and Ahmad 2010). In January 11, 2010, the garment
workers created violence for getting the facilities such as lunch bills and
encashment of casual leaves. Forty workers were injured, production of 30
garment factories were halted. The garment workers had created another
aggression on April 28, 2010 for increasing their monthly wage rate from
US$ 25 to US$ 70. During that incidence, more than 22 RMG factories
were affected and 30 peoples were injured (Islam and Ahmad 2010).
The wage rate (0.25 US$ hour) is the lowest in Bangladesh compare
with other countries like China (0.35), Vietnam (0.40), Pakistan (0.40)
and India (0.60). Overtime allowance is also inadequate in the garment

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sector in Bangladesh. Another major worker disputes had taken place on

May 25, 2010 for low house rent allowance. Thirty peoples were wounded,
a police station was burned down and many roads were blocked for several
hours.
Worker unrest took place on June 21, 2010 for implementing minimum
wages of US$ 70 a month. In that clash, two hundred peoples were
injured and thirty factories were ransacked (Islam and Ahmad 2010). The
garment workers had violated at Dhaka on June 30, 2010 for protecting
the closure of factories, and more than 40 people were injured. The
workers have been engaged in street protest, picketing, or blocked of a
manager's office or a factory for expressing their dissatisfaction about their
wages and other job related issues. One of the reasons for this unrest in
the garment industry is legal and institutional failures to ensure labor rights
(Islam and Ahmed 2010). Most of the garment factories in Bangladesh do
not follow the labor law and ILO conventions (Islam and Ahmed 2010).
The Labor Act 2006 (called Labor code) clearly mentions that the wage
of a worker must be paid within seven workings days [Section 123 (1)].
Majority factories do not provide appointment letters/contract letters, identity
cards and employee handbooks. Health safety and security condition in this
sector are also insufficient. The workers do not have a clear idea about
their rights and labor laws (Islam and Ahmed 2010).There are some
important causes that reduce productivity in the garment sector. Issues like
unresolved labor conflict and poor teamwork result in firm’s ineffectiveness,
low motivation, boredom for specialized work, rapid technological change and
high cost that reduced innovation (Abdullah 2005b). The most common
reasons of labor unrest in the garment sector are wage rate and unpaid
wage. Some garment owners do not pay salaries and overtime allowance to
the workers on time. However, owner’s claim that more than 90 percent
factories pay workers wages within 1st and 2nd week of the month
(Rahman, Bhattacharya 2008). Political unrest at the national level often
influences violence at the RMG sector. Sometimes women workers work
until 3 o’clock in the morning for meeting their shipment deadlines (Jamaly
and Wickramnanyam 1996). In most of the factories in the RMG sector,
daily working hour is 8.28 hours (excluding overtime working hours)
(Bhattacharya 2008). Women generally choose to work in the RMG sector
due to their poor economic condition with little or no control over their
income. In fact, women face discriminations at work in terms of wage
differentials and gender differences. They are working in poor condition and

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feel insecurity. The women workers are living under the poverty line
because of their low wage.
They cannot maintain their basic cost of living so that they try to increase
their income by working overtime. Until 2010, the minimum wage of US$
43 per month has not yet implemented. Still they are living below poverty
line (Clark and Kanter 2010/2011). Participants were asked to share
their opinions about the causes of recent unrest in the garment sector. Most
of the participants believe that influence of external factors is the major
reason for current unrest in the garment sector (F1:1; F1: 3; F1:6; F3:1;
F2:4). For example, some garments where payment are quite high also
experience labor unrest (F1:1; F1: 3; & F1:6). Participants reported that
there are some external groups always try to create rumor about unfair
management practices so that workers become restless and create dispute
against the garment management.
Dispute in a garment factory also have influence on the workers of another
garment factory to create further disputes (F3:1 & F1:1). Apart from the
external influences, there are antitrust relationships exists between workers
and management. The workers believe that they are always exploited by the
Management. Labor unions are promoting these views (F2:4). Poor
relationship among workers and the front line managers (FLMs)/supervisors
are reasons of labor unrest in garment industry (F2:3). FLMs or the
supervisor’s poor behavior makes the workers stubborn and reluctant to
work, and it often creates disputes among the workers in garment factory
(F1:1&2). Moreover, if management does not solve worker’s problem
quickly, it also creates disputes (F3:7). A participant reported that strict
supervisors sometimes get support from top management due to their high
achievement (F2:7). Prompt and participative management approaches to
complain are effective remedy to resolve worker’s disputes.
4.19 New Challenges
Five deadly incidents from November 2012 through May 2013 brought
worker safety and labor violations in Bangladesh to world attention putting
pressure on big global clothing brands such as Primark, Loblaw, Joe Fresh,
Gap, Wal-Mart, Nike, Tchibo, Calvin Klein and Tommy Hilfiger, and retailers
to respond by using their economic weight to enact change No factory
owner has ever been prosecuted over the deaths of workers. Other major

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fires 1990 and 2012, resulting in hundreds of accidental deaths, include

those at that's It Sportswear Limited and the fire at Tazreen Fashions Ltd.
Spectrum Sweater Industries, Phoenix Garments, Smart Export Garments,
Garib and Garib, Matrix Sweater, KTS Composite Textile Mills and Sun
Knitting. major foreign buyers looking for outsourcing demand compliance-
related norms and standards regarding a safe and healthy work environment
which includes fire-fighting equipment, evacuation protocols and mechanisms
and appropriate installation of machines in the whole supply-chain.
RMG insiders in Bangladesh complain about the pressure to comply and
argue that RMG factory owners are hampered by a shortage of space in
their rental units. Scott Nova of the Worker Rights Consortium, a rights
advocacy group, claimed that auditors, some of whom were paid by the
factories they inspect, sometimes investigated workers right issues such as
hours or child labor but did not properly inspect factories structural
soundness or fire safety violations. Nova argued that the cost of compliance
to safety standards in all 5,000 clothing factories in Bangladesh is about
$3 billion (2013).
In 2000 garment entrepreneurs had a reputation for shirking custom duties,
evading corporate taxes, remaining absent in capital markets, avoiding social
projects such as education, healthcare, and disaster relief but, argued
authors Quddus and Salim, these entrepreneurs took the risks needed to
build the industry. Bangladesh successfully competes in the manufacturing
industry by maintaining "lowest labor costs in the world." Garment workers'
minimum wage was set at roughly $37 a month in 2012 but since 2010
Bangladesh's double-digit inflation with no corresponding rise in minimum
wage and labor rights, has led to protests. A fire broke out on 24
November 2012, in the Tazreen Fashion factory in Dhaka killing 117
people and injuring 200. According to the New York Times, Wal-Mart
played a significant role in blocking reforms to have retailers pay more for
apparel in order to help Bangladesh factories improve safety standards.
Wal-Mart director of ethical sourcing, Sridevi Kalavakolanu, asserted that the
company would not agree to pay the higher cost, as such improvements in
electrical and fire safety in the 4,500 factories would be a "very extensive
and costly modification" and that "it is not financially feasible for the brands
to make such investments." On April 24 1137 textile workers factories
making clothes for Western brands, were killed when a garment factory
collapsed. The Savar building collapse was in the Rana Plaza complex, in
Savar, an industrial corner 20 miles northwest of Dhaka, the capital of

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Bangladesh. It was the "world's deadliest industrial accident since the

Bhopal disaster in India in 1984. While some 2,500 were rescued from
the rubble including many who were injured, the total number of those
missing remained unknown weeks later. Bangladesh's Commerce Ministry,
fearing the loss of contracts that represent 60 per cent of textile industry
exports On May 9, 2013 eight people were killed when a fire broke out at
a textile factory in an eleven-story building in the Mirpur industrial district
owned by Tung Hai Group, a large garment exporter.
4.20 Effects of RMG exported Products on Bangladesh’s Economy
Garment sector is the largest employer of women in Bangladesh. The

garment sector has provided employment opportunities to women from the
rural areas that previously did not have any opportunity to be part of the
formal workforce. This has given women the chance to be financially
independent and have a voice in the family because now they contribute
financially. However, the women workers are facing many problems. Most
women come from low income families. Low wage of women workers and
their compliance have enabled the industry to compete with the world
market. Women are paid far less than men mainly due to their lack
education. Women are reluctant to unionize because factory owners threaten
to fire them. Even though trade unionization is banned inside the Export
processing Zones (EPZ), the working environment is better than that of the
majority of garment factories that operate outside the EPZs. But, pressure
from buyers to abide by labor codes has enabled factories to maintain
satisfactory working conditions. In recent times, garment workers have
protested against their low wages. The first’s protests broke out in 2006,
and since then, there have been periodic protests by the workers. This has
forced the government to increase minimum wages of worker. Bangladesh
textile sector actually grew tremendously after 2004 and reached an export
turnover of US$10.7 billion in FY 2007. Bangladesh's export trade is
dominated by the RMG industry. The sector currently employs 2.5 million
people about 40% of total manufacturing (85% of these employees are
women) and accounts for 76% of the country's export earnings and 10%
of its GDP. Bangladesh was the sixth largest exporter of apparel in the
world after china, the EU, Hong Kong, Turkey and India in 2006. In 2006
Bangladesh's share in the world apparel exports was 2.8%. The US was
the largest single market with US$3.23 billion in exports, a 30% share in
2007. Today, the US remains the largest market for Bangladesh's woven
garments taking US$2.42 billion, a 47% share of Bangladesh's total woven

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exports. The European Union remains the largest regional destination -

Bangladesh exported US$5.36 billion in apparel; 50% of their total apparel
exports. The EU took a 61% share of Bangladeshi knitwear with US$3.36
billion exports. The RMG sector is expected to grow despite the global
financial crisis of 2009. As China is finding it challenging to make textile
and foot wear items at cheap price, due to rising labor costs, many foreign
investors, are coming to Bangladesh to take advantage of the low labor
cost. Even now for the readymade garments most of the manufacture need
to bring all the accessories from abroad, which is very costly. Now they are
start using locally accessories minting the required quality. Zippers, buttons,
labels, hooks, hangers, elastic bands, thread, backboards, butterfly pins,
clips, collar stays, collarbones and cartons are the major garment
accessories produced in Bangladesh. Many small and medium accessory
industries have grown here over the years, particularly to meet high demand
from low-end garment makers The accessory market is dominated by
multinational companies operating in Bangladesh, because in majority cases,
garment buyers prefer accessories from them over the locally available
items, Now it is time for the Bangladeshi Merchandiser to introduce more
local trims and trims manufacturer to buyer to show their expertise. The
sector rapidly attained high importance in terms of employment, foreign
exchange earnings and its contribution to-GDP’s 175.67%. Currently
Bangladesh is now second largest readymade garments manufacturer after
China, by the next five years Bangladesh will become largest readymade
garments manufacturer hopefully if it can face the challenges from different
serious issues has been discussed above. Export Promotion Bureau statistics
showed RMG export posted over 24% growth to $6.2bn in the first quarter
of the current fiscal year, compared to $5bn from the same period of last
year. In the last fiscal year, the RMG sector earned US$21.51bn, which
was 12.7% higher compared to the earnings of 2011-12 fiscal year.
Chapter: 5: All about Import

An import is any good or service brought into one country from another
country in a legitimate fashion, typically for use in trade. Import goods or
services are provided to domestic consumers by foreign producers. An
import in the receiving country is an export to the sending country. Import
of goods normally requires involvement of the Customs authorities in both
the country of import and the country of export and is often subject to

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import quotas, tariffs and trade agreements.

5.1 General import regulations and requirements
Most goods imported into Bangladesh, regardless of entered value, are

required to submit to a Pre-Shipment Inspection. For further details see
field for "Pre-Shipment Inspection/Other Pre-Shipment Requirements”.
Bangladesh observes a boycott of Israel. Imports may not ship on Israeli
flag vessels. No vessel or aircraft used for shipments to Bangladesh may
call on any port in Israel.
5.2 Import customs tariff
Bangladesh uses the Harmonized Tariff System for tariff classification. Tariff
rates are set at 10, 15, 20, and 25 %. Certain products are exempt from
duties. Additional taxes/charges which may apply:
 15 % value-added tax
 Supplemental tax on certain goods
 Landing fee
 Insurance charge
5.3 Customs valuation basis
Specific duty rates is based on net weight. Ad valorem duties are based on
value assessed as follows: CFR value, plus insurance fee (1%) and
landing charge (1%). Bangladesh also applies the WTO Customs Valuation
agreement. According to this agreement, there are six acceptable methods
of determining customs value. Typically the first method is used (unless the
buyer and seller are related parties). When the value cannot be obtained
this way, or is rejected by customs, one of the other methods is to be
used, in descending order:
o Transaction value (the price actually paid or payable by the
importer, plus certain costs and expenses)
o Transaction value of identical goods
o Transaction value of similar goods
o Deductive value (the sale or resale value, reduced by certain
costs such as customs duties, taxes, and commissions)
o Computed value (calculated by adding together certain
costs/values for production, materials, profit and other expenses)

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o Fall-back method
5.4 General import license/permit requirements
Most goods do not require an import license. The Ministry of Commerce

requires registration of each importer. Prior approval is required to import
goods on the restricted list. Certain restricted goods may be imported only
by authorized users. There are no tariff quotas on imports.
5.5 Prohibited or highly restricted imports
All goods from Israel, Serbia and/or Montenegro are prohibited.

Prohibited articles may include the following: artificial mustard oil, eggs
(except hatching eggs), fishing nets (gillnets), grass, horror comics, lard
and tallow oil, lard, live pigs, motorbikes more than three years old, nylon
and polyethylene ropes, obscene and subversive literature or similar types of
materials; opium, pig and poultry fat, pig hair, poppy seeds and dried posto
dana, raw sugar, selected insecticides, selected petroleum products, single
phase electricity meters solid or semi-solid palm oil, some kinds of cloth,
tendu leaves, un-denatured ethyl alcohol (80% or higher) and other
denatured spirits of any strength, used or new rags, vessels more than 15
years old, wine, woven fabrics of silk or silk waste. Restricted articles may
include the following, in alphabetical order: goods bearing pictures or writing
which is obscene or of a religious connotation which may injure the
religious feelings of any class of Bangladeshi citizens; printed material,
posters, video tapes, etc. containing matters likely to outrage the religious
feelings and beliefs of any class of Bangladeshi citizens; unless otherwise
specified, old, second-hand and reconditioned goods; unless otherwise
specified, all kinds of waste; reconditioned office equipment (i.e.,
photocopier, typewriter, telex, computer, phone, fax machine).
5.6 Foreign exchange controls and letters of credit
Foreign exchange is controlled by the government through the central bank,

the Bangladesh Bank. It administers foreign exchange control through
authorized commercial banks and financial institutions. Unless otherwise
specified, all imports must be made by opening an Irrevocable Letter of
Credit. Importers are required to have Letter of Credit Authorization (LCA)
forms. The unit of currency is the BDT = Bangladeshi Taka (subdivided
into 100 Poisha).

BBA
5.7 Pre-shipment requirements
A Pre-Shipment Inspection (PSI) is required. Such an inspection involves

a physical inspection of the goods and in addition a price comparison of
the merchandise in order to:
 Ensure that prices charged by exporters reflect the true value of the
shipped goods.
 Prevent substandard goods from entering Bangladesh's commerce.
 Mitigate attempts by importers to avoid payment of customs duties.
5.8 Commercial invoice
A commercial invoice is required for every commercial shipment and should

conform to the information requirements described in our definition. At least
three (3) original, signed copies should be sent to the consignee or the
agent thereof with the other shipping documents. The shipper should confirm
the exact number of copies required with the consignee. Country of origin
information should be included, unless a separate certificate of origin is
requested. A pro-forma invoice is needed in advance for the required letter
of credit (L/C). Each non-commercial shipment will also require a pro-
forma invoice. For airfreight shipments, in most cases, the shipping
documents should accompany the cargo and/or the air way bill (AWB).
5.9 Packing list
A packing list is recommended to facilitate customs clearance. In general,

even when it is not required regulation, it is recommended that a packing
list be used with all shipments containing more than one shipping unit of
packaged cargo. Most countries require a packing list be provided together
with the commercial invoice. The required information must be consistent
with all information shown on the commercial invoice. At least three (3)
copies of the packing list should be included as part of the shipping
documents sent to the consignee or the agent thereof. The exact contents
of each package should be clearly identified. This should include each
item's gross weight and net weight and each package's marks and numbers.
5.10 Transport document
A properly prepared transport document is required for transportation

purposes and as a source document for customs clearance purposes at the
port of entry. For ocean cargo, three (3) copies of an ocean bill of lading

BBA
are required. "To order" B/Ls is acceptable. For airfreight, an air waybill
(AWB) is required.
5.11 Certificate of Origin (general)
When required by the buyer/consignee or the terms of a letter of credit

(L/C); a shipper should consult with the customer in Bangladesh to
determine the exact number of C/O copies needed. At the very least, three
(3) copies should be prepared, using the general certificate of origin (CO,
C/O) form that is available from a commercial printer. Once completed,
each C/O must be signed and each signature must be notarized. Following
notarization, each C/O must be certified by a recognized Chamber of
Commerce.
5.12 Official cargo insurance requirements
Every import shipment to Bangladesh is required to be covered by shipping

insurance underwritten by the Sadaran Bima Corporation or any other
Bangladeshi insurance company. A copy of the insurance certificate or the
insurance policy is required to be included among the shipping documents.
5.13 Product packaging/labeling requirements
Generally, labeling must show country of origin and complete manufacturer's

name and address. Specific packaging and labeling requirements apply to
food, agricultural and chemical products and to other products and
commodities. Obscene words or transcriptions are not permitted. Additional
product packaging and/or labeling requirements may apply to particular types
of products. Refer to the product-based information herein for the product
you are considering to import or export. An exporter should also verify with
its prospective importer in the destination country as to requirements for a
specific product to be shipped.
5.14 Standards
Product standards are regulated by the Bangladesh Standards and Testing

Institution. (BSTI). Certain products are subject to standards requirements.
5.16 ATA carnets
The ATA Carnet currently is not accepted in this country. An ATA Carnet is
obtained in the country from which the goods are to be first exported (see

BBA
list of participating countries). Initiating and governing authority for ATA

Carnets is the International Chamber of Commerce (ICC).
[Note: An ATA Carnet is typically accepted for Commercial Samples, Exhibitions and Fairs, and/or
Professional Equipment. An ATA Carnet does not cover perishable or consumable items, or goods for
processing or repair. Some countries are more restrictive in the scope of allowances for temporary
imports covered by ATA Carnet. It is recommended that prior verification be made with the issuing
agency.]
5.17 Bangladesh Imports
Imports in Bangladesh decreased to 2656.90 USD Million in August of

2013 from 3056.60 USD Million in July of 2013. Imports in Bangladesh
are reported by the Bangladesh Bank. From 1995 until 2013, Bangladesh
Imports averaged 4363.0 USD Million reaching an all time high of
20291.4 USD Million in June of 2009 and a record low of 1424.2 USD
Million in August of 2009. Bangladesh imports mostly petroleum product
and oil, machinery and parts, soybean and palm oil, raw cotton, iron and
steel and wheat. Bangladesh main imports partners are China (17% of
total), India, Indonesia, Singapore and Japan.
Figure : 1
Imports: $32.61 billion (2011 est.) & $34.56 billion (2012 est.)
Source: CIA World Fact book - Unless otherwise noted, information in this
page is accurate as of December 6, 2013.
5.17.1 Import of Bangladesh, 1970-2012

BBA
Import, billions Share in the world Import share in Import per Import
Year
dollars import, ‰ GDP, % capita, dollars growth, %
1970 0.55 1.44 7.9 8
1971 0.42 0.98 6.7 6 76.4
1972 0.6 1.2 8.6 9 142.9
1973 0.56 0.82 7.4 8 93.3
1974 0.61 0.64 6.7 9 108.9
1975 0.53 0.52 5.6 7 86.9
1976 1.3 1.13 11.8 18 245.3
1977 0.88 0.67 8 12 67.7
1978 1.5 0.98 10.7 19 170.5
1979 1.8 0.94 10.6 22 120
1980 2.6 1.12 13.7 32 144.4
1981 2.6 1.12 13.7 31 100
1982 2.6 1.19 15.3 30 100
1983 2.5 1.16 13.9 28 96.2
1984 2.6 1.15 12.4 28 104
1985 2.7 1.19 12.3 29 103.8
1986 2.5 1 10.9 26 92.6
1987 2.8 0.95 10.8 28 112
1988 3.2 0.94 11.4 31 114.3
1989 3.7 1 12.3 35 115.6
1990 3.9 0.88 12.2 36 105.4
1991 3.7 0.81 10.9 34 94.9
1992 3.8 0.75 10.9 34 102.7

BBA
1993 4.5 0.92 12.5 39 118.4
1994 4.7 0.87 12.4 40 104.4
1995 6.6 1.04 15.3 55 140.4
1996 7.4 1.11 16.4 60 112.1
1997 7.4 1.07 16.1 59 100
1998 7.8 1.14 16.3 61 105.4
1999 8.4 1.17 16.8 65 107.7
2000 8.7 1.09 17.1 66 103.6
2001 9.8 1.26 19.2 73 112.6
2002 9 1.11 17 66 91.8
2003 10 1.07 17.2 72 111.1
2004 12 1.06 19 85 120
2005 13 1.01 20 91 108.3
2006 15 1.02 22.1 104 115.4
2007 18 1.06 23.4 123 120
2008 23 1.18 25.6 155 127.8
2009 24 1.54 24 161 104.3
2010 25 1.35 22.3 165 104.2
2011 34 1.55 28.1 222 136
2012 36 1.63 28.3 233 105.9
5.17.2 Import of Bangladesh, 1970-2012

BBA
Figure: 2
5.17.3 Import per capita in Bangladesh, dollars, 1970-2012
5.17.4 Import share in GDP in Bangladesh, %, 1970-2012

BBA
5.17.5 Import growth dynamics of Bangladesh, %, 1971-2012

BBA
5.18 Comparison Table of Import of Bangladesh and its Neighbors
5.18.1 Import of Bangladesh and its neighbors, billions dollars, 1970-2012

Year Bangladesh Myanmar India Total
1970 0.55 0.34 2.4 3.29

1971 0.42 0.35 2.7 3.47
1972 0.6 0.28 2.7 3.58
1973 0.56 0.24 4.1 4.9
1974 0.61 0.21 5.9 6.72
1975 0.53 0.23 6.8 7.56
1976 1.3 0.24 6.3 7.84
1977 0.88 0.3 7.5 8.68
1978 1.5 0.47 9.1 11.07
1979 1.8 0.65 12 14.45
1980 2.6 0.71 17 20.31
1981 2.6 0.78 17 20.38
1982 2.6 0.82 17 20.42
1983 2.5 0.65 18 21.15
1984 2.6 0.61 17 20.21
1985 2.7 0.57 18 21.27
1986 2.5 0.33 18 20.83
1987 2.8 0.29 20 23.09
1988 3.2 0.2 23 26.4
1989 3.7 0.13 25 28.83
1990 3.9 0.19 28 32.09
1991 3.7 0.15 25 28.85
1992 3.8 0.13 28 31.93
1993 4.5 0.14 28 32.64
1994 4.7 0.13 33 37.83
1995 6.6 0.13 45 51.73
1996 7.4 0.13 45 52.53
1997 7.4 0.12 51 58.52
1998 7.8 0.062 54 61.862
1999 8.4 0.049 62 70.449
2000 8.7 0.043 66 74.743
2001 9.8 0.04 66 75.84
2002 9 0.027 78 87.027
2003 10 0.017 94 104.017
2004 12 0.013 138 150.013

BBA
2005 13 0.011 184 197.011

2006 15 0.014 230 245.014
2007 18 0.014 295 313.014
2008 23 0.022 371 394.022
2009 24 0.022 340 364.022
2010 25 0.037 448 473.037
2011 34 9.1 583 626.1
2012 36 10 591 637
5.18.2 Import of Bangladesh and its neighbors, % 1970-2012
Year Bangladesh Myanmar India Total
1970 16.72 10.33 72.95 100.0

1971 12.1 10.09 77.81 100.0
1972 16.76 7.82 75.42 100.0
1973 11.43 4.9 83.67 100.0
1974 9.08 3.13 87.8 100.0
1975 7.01 3.04 89.95 100.0
1976 16.58 3.06 80.36 100.0
1977 10.14 3.46 86.41 100.0
1978 13.55 4.25 82.2 100.0
1979 12.46 4.5 83.04 100.0
1980 12.8 3.5 83.7 100.0
1981 12.76 3.83 83.42 100.0
1982 12.73 4.02 83.25 100.0
1983 11.82 3.07 85.11 100.0
1984 12.86 3.02 84.12 100.0

BBA
1985 12.69 2.68 84.63 100.0

1986 12 1.58 86.41 100.0
1987 12.13 1.26 86.62 100.0
1988 12.12 0.76 87.12 100.0
1989 12.83 0.45 86.72 100.0
1990 12.15 0.59 87.25 100.0
1991 12.82 0.52 86.66 100.0
1992 11.9 0.41 87.69 100.0
1993 13.79 0.43 85.78 100.0
1994 12.42 0.34 87.23 100.0
1995 12.76 0.25 86.99 100.0
1996 14.09 0.25 85.67 100.0
1997 12.65 0.21 87.15 100.0
1998 12.61 0.1 87.29 100.0
1999 11.92 0.07 88.01 100.0
2000 11.64 0.06 88.3 100.0
2001 12.92 0.05 87.03 100.0
2002 10.34 0.03 89.63 100.0
2003 9.61 0.02 90.37 100.0
2004 8 0.01 91.99 100.0
2005 6.6 0.01 93.4 100.0

BBA
2006 6.12 0.01 93.87 100.0

2007 5.75 94.24 100.0
2008 5.84 0.01 94.16 100.0
2009 6.59 0.01 93.4 100.0
2010 5.28 0.01 94.71 100.0
2011 5.43 1.45 93.12 100.0
2012 5.65 1.57 92.78 100.0
5.18.3 Import per capita in Bangladesh and its neighbors, dollars, 1970-2012
Year Bangladesh Myanmar India
1970 8 13 4
1971 6 13 5
1972 9 10 5
1973 8 8 7
1974 9 7 10
1975 7 8 11
1976 18 8 10
1977 12 9 12
1978 19 14 14
1979 22 19 18
1980 32 21 24
1981 31 22 24
1982 30 23 23
1983 28 18 24

BBA
1984 28 16 22
1985 29 15 23
1986 26 8 23
1987 28 7 24
1988 31 5 28
1989 35 3 29
1990 36 5 32
1991 34 4 28
1992 34 3 31
1993 39 3 30
1994 40 3 35
1995 55 3 47
1996 60 3 46
1997 59 3 51
1998 61 1 54
1999 65 1 60
2000 66 1 63
2001 73 1 62
2002 66 1 72
2003 72 0 86
2004 85 0 124
2005 91 0 163
2006 104 0 201
2007 123 0 255
2008 155 0 316

BBA
2009 161 0 286
2010 165 1 372
2011 222 174 477
2012 233 189 478
5.18.4 Import share in GDP in Bangladesh and its neighbors, %, 1970-2012
1970 7.9 12.6 3.9
1971 6.7 12.5 4.1
1972 8.6 10.8 3.8
1973 7.4 7.3 4.8
1974 6.7 5.3 6.1
1975 5.6 6.2 6.8
1976 11.8 5.9 6.2
1977 8 7.1 6.4
1978 10.7 10 6.7
1979 10.6 12 8
1980 13.7 12 9.2
1981 13.7 13.2 8.6
1982 15.3 13.4 8.5
1983 13.9 10.3 8.2
1984 12.4 9.4 7.8
1985 12.3 8.6 8
1986 10.9 6.6 7.3
1987 10.8 5.9 7.3

BBA
1988 11.4 4.4 7.6
1989 12.3 2.7 8.3
1990 12.2 3.7 8.6
1991 10.9 2.8 8.6
1992 10.9 2.2 9.6
1993 12.5 2.2 9.9
1994 12.4 1.8 10.2
1995 15.3 1.7 12.2
1996 16.4 1.5 11.6
1997 16.1 1.3 12.1
1998 16.3 1.1 12.7
1999 16.8 0.7 13.7
2000 17.1 0.6 14.1
2001 19.2 0.5 13.7
2002 17 0.3 15.4
2003 17.2 0.2 15.9
2004 19 0.1 19.3
2005 20 0.1 22
2006 22.1 0.1 24.3
2007 23.4 0.1 24.5
2008 25.6 0.1 28.7
2009 24 0.1 25.4
2010 22.3 0.1 26.3

BBA
2011 28.1 16.5 30.3
2012 28.3 16.9 31.5
5.18.5 Import growth dynamics of Bangladesh and its neighbors, % 1971-2012
1971 76.4 102.9 112.5
1972 142.9 80 100
1973 93.3 85.7 151.9
1974 108.9 87.5 143.9
1975 86.9 109.5 115.3
1976 245.3 104.3 92.6
1977 67.7 125 119
1978 170.5 156.7 121.3
1979 120 138.3 131.9
1980 144.4 109.2 141.7
1981 100 109.9 100
1982 100 105.1 100
1983 96.2 79.3 105.9
1984 104 93.8 94.4
1985 103.8 93.4 105.9
1986 92.6 57.9 100
1987 112 87.9 111.1
1988 114.3 69 115
1989 115.6 65 108.7

BBA
1990 105.4 146.2 112
1991 94.9 78.9 89.3
1992 102.7 86.7 112
1993 118.4 107.7 100
1994 104.4 92.9 117.9
1995 140.4 100 136.4
1996 112.1 100 100
1997 100 92.3 113.3
1998 105.4 51.7 105.9
1999 107.7 79 114.8
2000 103.6 87.8 106.5
2001 112.6 93 100
2002 91.8 67.5 118.2
2003 111.1 63 120.5
2004 120 76.5 146.8
2005 108.3 84.6 133.3
2006 115.4 127.3 125
2007 120 100 128.3
2008 127.8 157.1 125.8
2009 104.3 100 91.6
2010 104.2 168.2 131.8
2011 136 24594.6 130.1
2012 105.9 109.9 101.4

BBA
5.19 Import of Bangladesh and its neighbors, %, 2012
5.20 Comparison of import of Bangladesh and leaders
5.20.1 Import of Bangladesh and leaders, billions dollars, 1970-2012
Year Bangladesh United States China Germany Japan Great Britain

1970 0.55 56 2.5 37 20 27
1971 0.42 62 3 43 21 29
1972 0.6 74 3.8 51 25 34
1973 0.56 91 5.2 68 42 46
1974 0.61 128 7.5 87 67 63
1975 0.53 123 7.4 96 64 63
1976 1.3 151 6.8 110 72 66

BBA
1977 0.88 182 7.4 126 80 74

1978 1.5 212 15 151 92 87
1979 1.8 253 24 197 127 115
1980 2.6 294 33 231 156 134
1981 2.6 318 35 201 165 121
1982 2.6 303 28 191 152 118
1983 2.5 329 28 188 146 118
1984 2.6 405 32 186 157 123
1985 2.7 417 41 191 149 127
1986 2.5 453 37 237 149 148
1987 2.8 509 47 285 179 183
1988 3.2 554 64 314 230 222
1989 3.7 591 68 335 264 234
1990 3.9 630 52 426 291 264
1991 3.7 624 59 473 294 252
1992 3.8 668 70 504 294 268
1993 4.5 720 94 438 303 257
1994 4.7 813 106 483 340 286
1995 6.6 903 129 584 411 329
1996 7.4 964 147 581 435 357
1997 7.4 1056 164 563 418 383

BBA
1998 7.8 1116 164 593 349 397

1999 8.4 1251 190 608 380 414
2000 8.7 1474 251 624 446 435
2001 9.8 1398 271 617 408 433
2002 9 1430 328 626 395 464
2003 10 1544 449 771 440 521
2004 12 1798 607 913 524 620
2005 13 2026 712 999 590 683
2006 15 2241 853 1158 650 778
2007 18 2376 1034 1335 699 835
2008 23 2556 1232 1517 849 850
2009 24 1976 1113 1238 621 663
2010 25 2362 1520 1389 768 742
2011 34 2670 1898 1648 947 827
2012 36 2743 2070 1572 992 835
5.20.2 Import per capita in Bangladesh and leaders, dollars, 1970-2012

1970 8 267 3 467 193 485
1971 6 293 4 541 200 520
1972 9 346 4 640 234 608
1973 8 422 6 853 389 820

BBA
1974 9 589 8 1091 612 1122

1975 7 561 8 1204 578 1120
1976 18 682 7 1381 643 1173
1977 12 814 8 1584 708 1315
1978 19 939 16 1901 807 1545
1979 22 1110 25 2484 1104 2043
1980 32 1277 34 2918 1346 2380
1981 31 1368 35 2543 1412 2149
1982 30 1291 28 2420 1291 2094
1983 28 1388 27 2385 1232 2093
1984 28 1691 31 2360 1316 2179
1985 29 1724 39 2421 1242 2247
1986 26 1854 34 2998 1236 2614
1987 28 2062 43 3594 1479 3224
1988 31 2222 57 3944 1894 3901
1989 35 2346 59 4186 2167 4101
1990 36 2475 45 5293 2380 4614
1991 34 2427 50 5838 2396 4393
1992 34 2573 58 6175 2387 4659
1993 39 2745 77 5327 2450 4456
1994 40 3067 86 5837 2740 4945

BBA
1995 55 3369 104 7024 3302 5673

1996 60 3554 118 6967 3486 6137
1997 59 3846 130 6743 3343 6564
1998 61 4014 130 7102 2786 6782
1999 65 4445 149 7282 3028 7049
2000 66 5179 196 7472 3548 7379
2001 73 4862 210 7382 3239 7316
2002 66 4926 253 7480 3129 7807
2003 72 5272 345 9202 3478 8727
2004 85 6085 463 10889 4133 10336
2005 91 6795 540 11916 4646 11328
2006 104 7447 643 13829 5113 12834
2007 123 7821 775 15973 5493 13695
2008 155 8335 918 18194 6668 13859
2009 161 6385 824 14883 4876 10745
2010 165 7565 1118 16732 6030 11955
2011 222 8479 1387 19881 7438 13247
2012 233 8639 1503 18986 7796 13300
5.20.3 Import share in GDP in Bangladesh and leaders, %, 1970-2012

1970 7.9 5.2 2.7 17.7 9.6 21.6

BBA
1971 6.7 5.3 3.1 17.8 8.9 20.6

1972 8.6 5.8 3.4 17.6 8 21
1973 7.4 6.4 3.8 17.6 9.9 25.1
1974 6.7 8.3 5.3 20.2 14.2 31.8
1975 5.6 7.3 4.6 20.2 12.5 26.7
1976 11.8 8 4.5 21.9 12.5 29.1
1977 8 8.7 4.3 21.7 11.3 28.8
1978 10.7 9 7 21.1 9.2 26.8
1979 10.6 9.6 9.1 23.1 12.2 27.3
1980 13.7 10.3 10.7 25.1 14.4 24.7
1981 13.7 9.9 11.9 25.9 13.7 23.5
1982 15.3 9.1 9.5 25.4 13.6 24
1983 13.9 9 8.9 25.2 12 25.3
1984 12.4 10 10.1 26.5 12.1 28
1985 12.3 9.6 13.3 26.9 10.8 27.4
1986 10.9 9.9 12.2 23.4 7.3 26
1987 10.8 10.5 14.2 22.7 7.2 26.1
1988 11.4 10.5 15.5 23.2 7.6 26.1
1989 12.3 10.4 14.8 24.7 8.8 27.2
1990 12.2 10.5 12.9 24.9 9.4 25.9
1991 10.9 10.1 13.9 26.1 8.3 23.6

BBA
1992 10.9 10.2 14 24.4 7.6 24.2

1993 12.5 10.5 14.7 21.8 6.9 25.8
1994 12.4 11.1 18.2 22.5 7 26.5
1995 15.3 11.8 17 23.1 7.7 27.9
1996 16.4 11.9 16.5 23.8 9.2 28.7
1997 16.1 12.3 16.6 26.1 9.7 27.7
1998 16.3 12.3 15.7 27.2 8.9 26.9
1999 16.8 12.9 17.3 28.5 8.6 27.3
2000 17.1 14.3 21 33.1 9.4 29.1
2001 19.2 13.2 20.6 32.8 9.8 29.2
2002 17 13 22.5 31.2 9.9 28.6
2003 17.2 13.4 27.2 31.8 10.2 27.8
2004 19 14.6 31.2 33.5 11.3 27.9
2005 20 15.5 31.1 36.1 12.9 29.4
2006 22.1 16.2 30.5 39.9 14.9 31.3
2007 23.4 16.4 29.5 40.2 16 29.2
2008 25.6 17.4 27.1 41.9 17.5 31.6
2009 24 13.7 21.8 37.5 12.3 30
2010 22.3 15.8 25.5 42 14 32.3
2011 28.1 17.2 26 45.4 16.1 33.6
2012 28.3 16.9 24.8 45.9 16.6 33.8

BBA
5.20.4 Import growth dynamics of Bangladesh and leaders, %, 1971-2012

1971 76.4 110.7 120 116.2 105 107.4
1972 142.9 119.4 126.7 118.6 119 117.2
1973 93.3 123 136.8 133.3 168 135.3
1974 108.9 140.7 144.2 127.9 159.5 137
1975 86.9 96.1 98.7 110.3 95.5 100
1976 245.3 122.8 91.9 114.6 112.5 104.8
1977 67.7 120.5 108.8 114.5 111.1 112.1
1978 170.5 116.5 202.7 119.8 115 117.6
1979 120 119.3 160 130.5 138 132.2
1980 144.4 116.2 137.5 117.3 122.8 116.5
1981 100 108.2 106.1 87 105.8 90.3
1982 100 95.3 80 95 92.1 97.5
1983 96.2 108.6 100 98.4 96.1 100
1984 104 123.1 114.3 98.9 107.5 104.2
1985 103.8 103 128.1 102.7 94.9 103.3
1986 92.6 108.6 90.2 124.1 100 116.5
1987 112 112.4 127 120.3 120.1 123.6
1988 114.3 108.8 136.2 110.2 128.5 121.3
1989 115.6 106.7 106.3 106.7 114.8 105.4

BBA
1990 105.4 106.6 76.5 127.2 110.2 112.8

1991 94.9 99 113.5 111 101 95.5
1992 102.7 107.1 118.6 106.6 100 106.3
1993 118.4 107.8 134.3 86.9 103.1 95.9
1994 104.4 112.9 112.8 110.3 112.2 111.3
1995 140.4 111.1 121.7 120.9 120.9 115
1996 112.1 106.8 114 99.5 105.8 108.5
1997 100 109.5 111.6 96.9 96.1 107.3
1998 105.4 105.7 100 105.3 83.5 103.7
1999 107.7 112.1 115.9 102.5 108.9 104.3
2000 103.6 117.8 132.1 102.6 117.4 105.1
2001 112.6 94.8 108 98.9 91.5 99.5
2002 91.8 102.3 121 101.5 96.8 107.2
2003 111.1 108 136.9 123.2 111.4 112.3
2004 120 116.5 135.2 118.4 119.1 119
2005 108.3 112.7 117.3 109.4 112.6 110.2
2006 115.4 110.6 119.8 115.9 110.2 113.9
2007 120 106 121.2 115.3 107.5 107.3
2008 127.8 107.6 119.1 113.6 121.5 101.8
2009 104.3 77.3 90.3 81.6 73.1 78
2010 104.2 119.5 136.6 112.2 123.7 111.9

BBA
2011 136 113 124.9 118.6 123.3 111.5

2012 105.9 102.7 109.1 95.4 104.8 101
5.21 Composition and Performance of Imports of Bangladesh:
5.21.1 Import Composition and Growth:
To analyze the import composition of Bangladesh it is observed that the

import share of principal primary commodities (in total imports) showed a
declining trend in recent years. On the other hand, the shares of principal
industrial goods and capital goods reported a slight increase. The import
payments for principal primary commodities, in FY 1998-99, were US$
1,448 million representing 18.06% of total import payments. These figures
decreased to US$ 980 million and $ 1,098 million (11.66% and 11.73%
of total import payments) in FY 1999-2000 and 2000-01 respectively.
The import shares of principal industrial goods increased to 14.58% and
15.34% in FY 1999-2000 and FY 2000-01 from 13.77% in FY 1998-
99. The share of import payments for capital goods in total imports
increased to 25.63% in FY 2000-01 from 24.56% in FY 1998-99.
Import payments for rice and wheat significantly decreased in FY 1999-
2000 and FY 2000-01 compared to FY 1998-99, which implies that the
country is making progress in food production. The share of import payments
for petroleum products increased significantly in FY 2000-01 compared to
FY 1998-99. Total import payments stepped up to US$ 9363 million in
FY 2000-01 from US$ 8403 million in FY 1999-2000 recording an
increase by 11.42% (GOB 2002; Bangladesh Bank 2002-03). 13.21%
increased by the FY 2012-2013.
5.21.2 Import Shares of Consumer and Capital Goods:
The variations in the share of consumer and capital goods are not notable
for the period 1995/96-1998/99 except for consumer goods in FY
1996-97, when the share dropped to 28% from 39% in FY 1995-96.
The shares of consumer goods dominate throughout the period recording
38% to 39% of total import payments. Capital goods, on the other hand,
registered 13% to 16% of total import payments during this time. The share
for combination of consumer goods and materials represented 63% to 68%
of total import payments, whereas the same for capital goods and materials
together was 32% to 37% during the stated period (BBS 2000: 251).

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5.22 Major Product - Wise Import of Bangladesh

Amounts in Million US$
Sl. Product 2009-10 2010-11
01. Petroleum Products 2021 3280
02. Chemicals 972 1271
03. Plastics & Rubber Articles 966 1319
04. Cotton 1440 2718
05. Yarn 719 1412
06. Textiles and Articles 1986 2716
07. Iron & Steel 1453 2032
08. Capital Machineries 1594 2359
09. Food Grains 837 1932
10. Edible Oil 1050 1080
5.23 List of Imported Products brought under mandatory certification before
Customs clearance
A. Food Products (18 Items):

Sl. No Name of the products Standards NO.
1 Milk Powder and Cream Powder BDS/CAC 207:08
2 Fruit Cordial BDS 508:2006
3 Biscuit BDS 383:2001
4 Sauce (Fruit & Vegetable) BDS 512:2007
5 Lozenges BDS 490:2007
6 Tomato Ketchup BDS/CAC 530:2002
7 Jams (Fruits Preserves) & Jelly BDS/CAC 79:2008
8 Marmalade BDS/CAC 80:2008
9 Infant Formula BDS CAC 72:2003
10 Soybeans Oil BDS 909: 2000
11 Soft Drink Powder BDS 1586:2007
12 Sugar BDS/CAC212:2006
13 Instant Noodles BDS 1552:2007
14 Fruit or vegetable Juice BDS 513:2002
15 Edible Sun Flower Oil BDS CAC 23: 2002
16 Chips/Crackers BDS
1556:1997;Amend1:200
4

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17 Taffies BDS 1000:2001

18 Honey BDS /CAC 12:2007
19 Processed Cereal based Foods for Infants and young BDS 074: 2007
children’s
B. Chemical Products (08 items):

1 Coconut Oil BDS 99:2007
2 Skin Cream BDS 1382:2006
3 Tooth Paste BDS 1216:2006
4 Skin Powder BDS 1337:2006
5 Shampoo, Synthetic Deter-gent based BDS 1269:2002
6 Lipstick BDS 1424:2006
7 Toilet Soap BDS 13:1994
8 After Shave Lotion BDS 1524:2006
C. Textile Product (2) Items

1 Polyester blend Suiting BDS 1175:2001
2 Polyester blend Shirting (Market Varieties) BDS 1148:2003
D. Electrical & Electronic Products (07) Items

1 Primary Batteries:
a) Part-1 General BDS IEC 60086 (Part-1):2005
b) Part-2 Physical and Electrical Specification BDS IEC 60086 (Part-2):2005
c) Part-3 Watch Battery BDS IEC 60086 (Part-3):2005
d) Part -4 Safety of Lithium batteries BDS IEC 60086 (Part-4):2005
e) Part-5 Safety of Batteries with Aqueous Electrolyte BDS IEC 60086 (Part-5):2005
2 Performance & Construction of Electric circulating BDS 818:1998 (BDS 181: '98,
Fans & Amend 1: 06)
Regulators (Ceiling & dec head fans, pedestal fans &
table/cabin fans with in-built regulators)
3 Tubular & other switches for domestic & similar BDS 117:2005
purposes (Push button, Piano etc.)
4 Tubular Fluorescent Lamps BDS 292:2001

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5 Ballast for Fluorescent Lamps Performance BDS /IEC 60921:05

Requirements
6 Two-Pin Plugs & Socket-Outlets Reversible type for BDS 102:2005
domestic use
7 Three-Pin Plugs & Socket-Outlets BDS 115:2005
E. Engineering Products (04) Items
Sl. Name of the products Standards NO.

No
1 Cement BDS EN 197-1:2003
2 Ceramic Table wares BDS 485:2006
3 G P Sheet (Including Corrugated Sheet) BDS 1122: 2007
4 Ceramic Tiles- definitions, Classifications characteristics & BDS/ISO 13006: 2006

marking
5.24 Bangladesh Imports by Product Section in US Dollars - Yearly
Section 2010 2011 2012
Live Animals; Animal

$105,764,259 $109,429,766 $171,618,433
Products
Vegetable Products $665,219,787 $1,034,222,203 $1,607,928,144
Animal or Vegetable Fats

and Oils and Their
Cleavage Products;
$646,889,973 $956,357,797 $1,553,757,562
Prepared Edible Fats;
Animal or Vegetable
Waxes
Prepared Foodstuffs;
Beverages, Spirits and
Vinegar; Tobacco and $324,402,630 $485,547,480 $534,364,521
Manufactured Tobacco
Substitutes
Mineral Products $525,706,783 $631,299,180 $693,220,761
Products of the Chemical

$1,071,632,413 $1,118,803,531 $1,395,561,553
or Allied Industries

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Plastics and Articles

Thereof; Rubber and $457,161,087 $601,180,557 $759,422,931
Articles Thereof
Raw Hides and Skins,

Leather, Fur skins and
Articles Thereof; Saddlery
and Harness; Travel
$5,877,490 $6,572,673 $7,846,798
Goods, Handbags and
Similar Containers; Articles
of Animal Gut (Other Than
Silk-Worm Gut)
Wood and Articles of

Wood; Wood Charcoal;
Cork and Articles of Cork;
Manufactures of Straw, of $23,518,960 $10,633,640 $9,886,546
Esparto or of Other Plaiting
Materials; Basket ware and
Wickerwork
Pulp of Wood or of Other

Fibrous Cellulosic Material;
Recovered (Waste and
Scrap) Paper or $173,024,827 $219,490,186 $230,763,881
Paperboard; Paper and
Paperboard and Articles
Thereof
Textiles and Textile Articles $2,424,690,835 $2,619,577,970 $2,550,583,616
Footwear, Headgear,
Umbrellas, Sun Umbrellas,
Walking-Sticks, Seat-Sticks,
Whips, Riding-Crops and
Parts Thereof; Prepared $27,349,697 $67,321,442 $53,273,596
Feathers and Articles
Made Therewith; Artificial
Flowers; Articles of Human
Hair
Articles of Stone, Plaster,

Cement, Asbestos, Mica or
Similar Materials; Ceramic $58,296,340 $57,773,447 $69,321,412
Products; Glass and
Glassware

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Natural or Cultured Pearls,

Precious or Semi-Precious
Stones, Precious Metals,
$2,049,828 $3,560,450 $4,725,255
Metals Clad With Precious
Metal and Articles Thereof;
Imitation Jewellery; Coin
Base Metals and Articles of

$633,887,536 $765,660,835 $900,726,785
Base Metal
Machinery-and
Mechanical Appliances;
Electrical Equipment; Parts
Thereof; Sound Recorders
and Reproducers,
$2,517,800,784 $3,100,436,283 $2,929,889,782
Television Image and
Sound Recorders and
Reproducers, and Parts
and Accessories of Such
Articles
Vehicles, Aircraft, Vessels

and Associated Transport $772,213,630 $945,363,190 $894,347,708
Equipment
Optical, Photographic,
Cinematographic,
Measuring, Checking,
Precision, Medical or
Surgical Instruments and $139,329,950 $154,821,347 $147,687,635
Apparatus; Clocks and
Watches; Musical
Instruments; Parts and
Accessories Thereof
Arms and Ammunition;

Parts and Accessories $30,380,333 $11,081,327 $27,168,425
Thereof
Miscellaneous
$105,247,794 $95,766,573 $99,522,106
Manufactured Articles

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Works of Art, Collectors'

$239,659 $436,637 $46,263
Pieces and Antiques
Other $445,903 $29,784 $273,650,795
Total $10,711,130,498 $12,995,366,298 $14,915,314,508
Source: United Nations Commodity Trade Statistics Database.
5.25 A Major Imported Product by Bangladesh-Petroleum Products
Bangladesh is not a petroleum producing country though it has a refinery

plant ERL, where imported crude oils from Saudi Arabia and Abu Dhabi are
processed with a small quantity of oil from Haripur Gas Field and the
products are marketed by several marketing companies. Hence, Bangladesh
has to depend on imported oil. The present annual demand of petroleum
products in the country is 3,300,000 tons. Total storage capacity of
petroleum products in the country is 687,500 tons, of which the storage
capacity at Eastern Refinery Limited is 365,000 tons. In the main
installations of three oil-marketing companies of ERL in Chittagong (Padma
Oil Company Ltd, Jamuna Oil Company Ltd, Meghna Petroleum Ltd), the
total storage capacity is 205,600 tons. Other than Chittagong, oil companies
have 19 (nineteen) oil depots in different parts of the country, located at
Godenail, Fatullah, Daulatpur, Bhairab, Chandpur, Baghabari, Balashi,
Chilmari, Ashuganj, Rangpur, Dhaka, Barisal, Jhalokati, Sreemangal, Sylhet,
Parbatipur, Rajshahi, Natore and Harian (Rajshahi).
From Chittagong, 82% of petroleum products are transported by river
(coastal tanker), 6% by Railway (Tank wagon or Box wagon), 10% by
road (Tank) and 2% by other local means (boat, push cart or van etc).
There are 72 coastal tankers (850-1200 tons capacity each) for
transportation of petroleum products from Chittagong to Godenail, Fatullah,
Daulatpur, Barisal, Jhalokati, Chandpur, Ashuganj and Bhairab depots. There
are 33 shallow Draft Tankers (400-450 tons capacity each) for
transportation of products from Godenail or Fatullah to Baghabari, Chilmari,
Balashi and Chandpur depots. There are about 1,000 railway tank wagons
(meter gauge and broad gauge). From Chittagong, products are dispatched
to Sylhet, Sreemangal, Rangpur and Dhaka oil depots by rail through meter
gauge railway. From Daulatpur products are dispatched to Natore, Parbatipur,
and Harian and Rajshahi depots by rail through broad gauge railway. There
are 759 filling stations, 37 consumer pumps, 1,480 agents/distributors,

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1273 LPG dealers and 305 Packed Point Dealers appointed by three oil-
marketing companies in the country for retail trading. There are more than
6,000 tank Lorries owned by dealers/distributors for transportation of
petroleum products from oil company depots to their selling points. During
1997-1998 the Corporation imported 5,13,000 tons crude oil from Abu
Dhabi and 6,31,000 tons crude oil from Saudi Arabia thus totaling
11,44,000 tons under state to state annual contract basis. The C&F cost
of this imported crude oil was US$ 151.56 million equivalent to Tk
7,141.51 million. The average C&F import cost was US$ 132.48 per tons.
Similarly in 1997-1998 the Corporation imported about 17,23,000 tons of
various grades of Refined Petroleum Products from KPC, SHELL and ESSO
and also procured about 12,000 tons bitumen from Iran under international
tender. The C&F cost for the above import amounted to US$ 268.06
million equivalent to Tk 12,630.99 million. The imported refined products
included 100 thousand tons petrol, 272 thousand tons SKO, 126 thousand
tons jet petrol and 1,225 thousand tons HSD. The average C&F cost for
this was US$ 154.36 per tons while the average C&F import cost of
bitumen was nearly US$ 173.64 per tons. During the mentioned period
Bangladesh Petroleum Corporation (BPC) also imported about 39,742 tons
different grades of Lube base oil at a C&F cost of US$ 11.78 million
equivalent to Tk 555.07 million and the average import cost was US$
296.41 per tons. So during 1997-98, BPC imported 29, 19,000 tons of
crude and refined products and the total import cost amounted to US$
431.40 million equivalent to Tk 20327.57 million.
During the same period the Corporation exported 1,10,968 tons surplus
petroleum products like 10,459 tons naphtha and 1,00,509 tons furnace oil
from the refinery and earned US$ 10.11 million equivalent to Tk 476.38
million. In that year the country's only refinery produced 11,560,00 tons
various finished petroleum products by refining imported crude oils including
38 thousand tons condensate received from the gas fields. At the same time
the sole Bitumen plant of the country 'Asphaltic Bitumen Plant' produced
57,462 tons of bitumen and LPG bottling plant 'LP Gas Limited' bottled a
total 10,61,000 cylinders (each cylinder containing 12.5 Kg LPG) which
were delivered to the three oil marketing companies for marketing purpose.
Two lube blending plants of BPC, namely Standard Asiatic Oil Company Ltd
and Eastern Lubricants Blenders Ltd, blended different grades of 39,042
tons lubricating oil and supplied to three oil marketing companies. Last year
BPC took several initiatives for activating the country wide marketing and
distribution of various petroleum products by giving greater importance to the

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oil demand of the Northern regions. The government raised the price of
0.25% sulfur gasoil, superior kerosene, 95 RON and 92 RON gasoline by
Taka 5 (6.75 cents)/liter and the price of 180 CST high sulfur fuel oil by
Taka 8/liter. Officials said the government had decided to hike the prices
four months after the previous hike on May 6, 2011 as multilateral donor
agencies including the International Monetary Fund had suggested adjusting
the prices of petroleum products in line with the prices in the international
market. In May, the government had raised all petroleum product prices by
Taka 2/liter. BPC had earlier projected that it would require around Taka
460 billion in the current fiscal year 2011-12 (July-June), up 53% from
the previous fiscal year's Taka 300 billion to import an increased quantity of
fuel to feed domestic demand. And it said that the government subsidy to
BPC might have to increase more than three times to Taka 260 billion in
the current fiscal year, from the previous year's Taka 80 billion, if the
domestic oil prices were not increased.BPC will require to import around
6.50 million mt of petroleum products in fiscal year 2012-13, up 27.45%
from previous fiscal year's 5.10 million mt. The demand might soar to
around 7 million mt for 2012-13 depending on fuel requirements of the
new gasoil and HSFO-fired power plants. BPC has planned to import around
4.0 million mt of gasoil and 1.5 million mt of HSFO to meet the mounting
oil demands in 2011-12 fiscal years. The remaining 1 million mt of
petroleum products include kerosene, A-1 jet fuel, gasoline and other fuels.
The country's petroleum demand is rising fast as the government has moved
to widen its range of energy sources by installing dozens of high-cost diesel
and furnace oil power plants in both the private and public sectors, the
sources added.
Twenty seven diesel and furnace oil-fired rental and quick rental power
plants are now operational across the country and a dozen more are
expected to come online soon.BPC is struggling to make payments for
petroleum imports; and suppliers especially the Malaysian Petro, the trading
arm of state-owned PETRONAS, and the Philippines National Oil Company
recently offered BPC a deferred payment mechanism to pay for import bills
within six months with interest to ensure payments. In the past 10 years of
operations, BPC has made profit only in fiscal 2008-2009 of Taka 3.22
billion when oil prices in the international market went down following the
global economic meltdown. BPC incurred losses of around Taka 72.08
billion for fiscal 2010-2011. In fiscal 2009-2010, the losses were at
Taka 20.49 billion. Bangladesh's petroleum import bill surged about 41
percent year on year to nearly 5 billion U.S. dollars in the last 2011-12
fiscal that ended in June, said a central bank official Monday. This is

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compared to 3.18 billion dollars the South Asian nation of 152.52 million
people spent in the previous 2010-11 fiscal year (July 2010-June
2011). The settlement of letters of credit (LCs), generally known as actual
imports, for petroleum products stood at 4,479.21 million dollars in the
2011-12 fiscal year (July 2011-June 2012). In the last fiscal, he said
the country's overall fuel import orders also increased by 51.40 percent year
on year. The overall import orders, officially known as fresh opening of
import letters of credit, increased to 4.671 billion dollars in 2011-12
against 3.085 billion dollars in the previous fiscal year, said the official
quoting the Bangladesh Bank (BB) data. State-run Bangladesh Petroleum
Corporation (BPC), the country's sole importer of petroleum product, said it
raised import of fuel to cope with greater demand in the power and transport
sectors and farm irrigation.17 percent of the fuel oil imported in the last
fiscal was spent on power generation. Communications and irrigation also had
35 percent and 42 percent shares of total import respectively in the last
fiscal year. In the current fiscal year’s estimated import target at about 5.8
million tones of petroleum products to meet the growing demand from various
sectors.
5.26 Petroleum’s Impact on Economy
Bangladesh's overall electricity generation is now reportedly hovering at about

5,600 megawatts (mw) per day against a demand of around 7,000 mw.
The import of fuel oil has increased mainly to run the rental and quick rental
power plants. Bangladesh economic analysts have long been saying that the
country's macro-economy is under severe strain due to the huge import
liability of fuel oils for the quick rental power plants. Bangladesh's annual
demand of fuel oil, which had been hovering around 3 million tons a year
until it jumped to 4.48 million tons in the last fiscal year, marking a sharp
rise due mainly to installation of many rental and quick oil-fired power plants
in recent years and growing dependency of farm machinery on diesel
generators for energy because of insufficient and unreliable electricity supply.
Bangladesh's two development partners -- Asian Development Bank (ADB)
and International Monetary Fund (IMF) -- few months ago said one of the
major reasons for macroeconomic pressures in the country is rising oil
import. Although the government in the last fiscal year hiked fuel oils more
than thrice, BPC, which sells fuel oil to the local market at much lower
rates than import prices, reportedly lost around 100 billion taka in the last
fiscal year. According to BPC, Bangladesh imports crude oil from Kingdom of
Saudi Arabia and Abu Dhabi.

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There are some important economic indicators with a bit discussion on

historical base data are given below that will help us to find out the
performance of export and import and its real impact on our economy.
The economy of Bangladesh is a rapidly developing market-based economy.
Its per capita income in 2012 was estimated to be US$2,100 (adjusted by
purchasing power parity). According to the International Monetary Fund,
Bangladesh ranked as the 44th largest economy in the world in 2012 in
PPP terms and 57th largest in nominal terms, among the Next Eleven (N-
11) of Goldman Sachs and D-8 economies, with a gross domestic product
of US$306 billion in PPP terms and US$153.6 billion in nominal terms.
The economy has grown at the rate of 6-7% per annum over the past few
years. More than half of the GDP is generated by the service sector; while
nearly half of Bangladeshis are employed in the agriculture sector. Other
goods produced are textiles, jute, fish, vegetables, fruit, leather and leather
goods, ceramics, ready-made goods.
Exports of textiles and garments are the largest source of foreign exchange
earnings. Shipbuilding, pharmaceuticals and consumer goods manufacturing
are important emerging industries, while the jute sector is re-emerging with
increasing global demand for green fibers. Remittances from Bangladeshis
working overseas, mainly in the Middle East, are another major source of
foreign exchange earnings. Other important export sectors include fish and
seafood, ceramics, cement, fertilizer, leather and leather goods, food
products, software and IT services. Bangladesh has also made major strides
in its human development index. The land is devoted mainly to rice and jute
cultivation as well as fruits and other produce, although wheat production has
increased in recent years; the country is largely self-sufficient in rice
production. Bangladesh's growth of its agricultural industries is due to their
fertile deltaic lands that depend on its six seasons and multiple harvests.
Transportation, communication, water distribution, and energy infrastructure are
rapidly developing. Bangladesh is limited in its reserves of oil, but recently
there has been huge development in gas and coal mining. The service
sector has expanded rapidly during last two decades and the country's
industrial base remains very positive. The country's main endowments include
its vast human resource base, rich agricultural land, relatively abundant
water, substantial reserves of natural gas and coal, major seaports at
Chittagong and Mongla, and its central strategic location at the crossroads of
the two large burgeoning economic hub groups of SAARC and ASEAN.
Chapter VI:

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Chapter 6: Overall Impact of Export &Import on Economy

of Bangladesh
According to a 2012 projection by HSBC, Bangladesh will be the world's
31st largest economy in 2050 when ranked by total gross domestic product
(GDP) and 89th when ranked by GDP per capita. The global economy is
familiar with specific terms defining the economic powers that influence trade
and industry beyond their borders. The Asian Tigers, for example, are the
four highly-developed countries (Hong Kong, Singapore, South Korea, and
Taiwan) that account for a good percentage of market exports around the
planet. Whether these nations will remain on top is up for debate, but as
implied by Goldman Sachs those included in the Next Eleven group may
prove competitive in the future. One such country is Bangladesh.
[Note: See the table shows the contribution of export on our economy:]
Table:
Major Products Export From Bangladesh And Contribution.
to GDP - 2013 ( Financial Express)
RMG |75.65%
Frozen Food |4.22%
Jute Goods |2.60%
Leather |2.19%
Chemical Products |1.77%
Raw Jute |1.21%
Agri Products |0.72%
Tea |0.06%
Others 11.56%
6.1 Bangladesh GDP-2013
The Gross Domestic Product (GDP) in Bangladesh was worth 115.61

billion US dollars in 2012. The GDP value of Bangladesh represents 0.19
percent of the world economy. GDP in Bangladesh is reported by the World
Bank. From 1960 until 2012, Bangladesh GDP averaged 31.9 USD Billion
reaching an all time high of 115.6 USD Billion in December of 2012 and
a record low of 4.3 USD Billion in December of 1960. The gross domestic
product (GDP) measures of national income and output for a given
country's economy. The gross domestic product (GDP) is equal to the total
expenditures for all final goods and services produced within the country in a
stipulated period of time.

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Source: World Bank Figure: 1
6.2 Bangladesh GDP Growth Rate
The Gross Domestic Product (GDP) in Bangladesh expanded 6.01 percent

in the fiscal year 2012/2013 from the previous year. GDP Growth Rate in
Bangladesh is reported by the Bangladesh Bank. From 1994 until 2013,
Bangladesh GDP Growth Rate averaged 5.6 Percent reaching an all time
high of 6.7 Percent in June of 2011 and a record low of 4.1 Percent in
June of 1994. Bangladesh is considered as a developing economy. Yet,
almost one-third of Bangladesh’s 150m people live in extreme poverty. In
the last decade, the country has recorded GDP growth rates above 5
percent due to development of microcredit and garment industry. Although
three fifths of Bangladeshis are employed in the agriculture sector, three
quarters of exports revenues come from producing ready-made garments.

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Source: Bangladesh Bank Figure: 2
6.3 Bangladesh GDP Annual Growth Rate
The Gross Domestic Product (GDP) in Bangladesh expanded 6.01 percent

in the fiscal year 2012/2013 from the previous year. GDP Annual Growth
Rate in Bangladesh is reported by the Bangladesh Bank. From 1994 until
2013, Bangladesh GDP Annual Growth Rate averaged 5.6 Percent reaching
an all time high of 6.7 Percent in June of 2011 and a record low of 4.1
Percent in June of 1994. In Bangladesh, services are the biggest sector of
the economy and account for 50 percent of total GDP. Within services the
most important segments are: wholesale retail and trade (14 percent of total
GDP); transport, storage and communication (11 percent) and real estate,
renting and business activities (7 percent). Industry accounts for 30 percent
of GDP. Within industry, the manufacturing segment represents 18 percent of
GDP while construction accounts for 9 percent. The remaining 20 percent is
contributed by agriculture and forestry (16 percent), and fishing (4
percent).

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Figure: 3
Figure: 4
6.4 Bangladesh Gross National Product
Gross National Product in Bangladesh increased to 4773.82 BDT Billion in

2013 from 4488.39 BDT Billion in 2012. Gross National Product in
Bangladesh is reported by the Bangladesh Bureau of Statistics. Gross
National Product in Bangladesh averaged 3606.21 BDT Billion from 2003
until 2013, reaching an all time high of 4773.82 BDT Billion in 2013 and
a record low of 2483.46 BDT Billion in 2003.

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Figure: 5
6.5 Bangladesh GDP per capita
The Gross Domestic Product per capita in Bangladesh was last recorded at
597.49 US dollars in 2012. The GDP per Capita in Bangladesh is
equivalent to 5 percent of the world's average. GDP per capita in
Bangladesh is reported by the World Bank. From 1960 until 2012,
Bangladesh GDP per capita averaged 311.6 USD reaching an all time high
of 597.5 USD in December of 2012 and a record low of 219.3 USD in
December of 1972. The GDP per capita is obtained by dividing the
country’s gross domestic product, adjusted by inflation, by the total
population.

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Figure: 6
6.6 Bangladesh Current Account to GDP
Bangladesh recorded a Current Account surplus of 1.40 percent of the

country's Gross Domestic Product in 2012. Current Account to GDP in
Bangladesh is reported by the Bangladesh Bank. From 1980 until 2012,
Bangladesh Current Account to GDP averaged -1.1 Percent reaching an all
time high of 3.7 Percent in December of 2010 and a record low of -4.4
Percent in December of 1988. The Current account balance as a percent of
GDP provides an indication on the level of international competitiveness of a
country. Usually, countries recording a strong current account surplus have
an economy heavily dependent on exports revenues, with high savings
ratings but weak domestic demand. On the other hand, countries recording a
current account deficit have strong imports, a low saving rates and high
personal consumption rates as a percentage of disposable incomes.

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Figure: 7
6.7 Bangladesh Terms of Trade
Terms of Trade in Bangladesh decreased to 70.10 Index Points in the fiscal

year 2011/2012 from 70.80 Index Points in the fiscal year 2010/2011.
Terms of Trade in Bangladesh is reported by the Ministry of Finance,
Bangladesh. From 1986 until 2012, Bangladesh Terms of Trade averaged
87.7 Index Points reaching an all time high of 104.7 Index Points in June
of 1988 and a record low of 70.1 Index Points in June of 2012. In
Bangladesh, Terms of Trade (TOT) correspond to the ratio of Price of
exportable goods to the Price of importable goods.
Figure: 8

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6.8 Bangladesh Current Account
Bangladesh recorded a Current Account deficit of 97 USD Million in the

second quarter of 2013. Current Account in Bangladesh is reported by the
Bangladesh Bank. From 2005 until 2013, Bangladesh Current Account
averaged 470.4 USD Million reaching an all time high of 1975.0 USD
Million in March of 2013 and a record low of -1638.0 USD Million in
December of 2011. Current Account is the sum of the balance of trade
(exports minus imports of goods and services), net factor income (such as
interest and dividends) and net transfer payments (such as foreign aid).
Figure: 9
6.9 Bangladesh Balance of Trade
Bangladesh recorded a trade deficit of 643.50 USD Million in August of

2013. Balance of Trade in Bangladesh is reported by the Bangladesh Bank.
From 1995 until 2013, Bangladesh Balance of Trade averaged -1105.0
USD Million reaching an all time high of -32.3 USD Million in July of
2013 and a record low of -5370.6 USD Million in June of 2008.
Bangladesh exports mainly readymade garments including knit wear and
hosiery (75% of exports revenue). Others include: Shrimps, jute goods
(including Carpet), leather goods and tea. Bangladesh main exports partners
are United States (23% of total), Germany, United Kingdom, France, Japan
and India. Bangladesh imports mostly petroleum product and oil, machinery
and parts, soya bean and palm oil, raw cotton, iron and steel and wheat.

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Bangladesh main imports partners are China (17% of total), India,

Indonesia, Singapore and Japan.
Figure: 10

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Chapter 7: Findings and Conclusion
7.1 Findings
Even though Bangladesh is a member of the Third World but today,

Bangladesh maintains its rank among nations with high potential developing
an economy that has shown impressive growth over the years. One might
think, given the assumed paucity of natural resources and industry in the
country that Bangladesh doesn't offer much in the way of goods to export.
Quite the contrary, though our neighbor to India doesn't enjoy the same
GNP level of the United States or nearby Asian nations. Bangladesh's two
development partners are respectively Asian Development Bank (ADB) and
International Monetary Fund (IMF) few months ago said one of the major
reasons for macroeconomic pressures in the country is raising oil import.
Bangladesh exported in 2009 more than $18 billion worth of supplies
annually, a significant growth from $5 billion seven years prior. Although
import in 2013 has been decreased by around $3000 million by the time
mid august but still economy is depended on import. There are around 650
million USD trade deficits in Bangladesh for 2013. Economist says the
government needs to look for alternative means to ease pressure on
economy caused by growing import of petroleum products and also the cause
of deficits for importing heavy machineries and parts, iron and steel and
again petroleum products. The country buys refined fuel oil from varieties
companies from different countries.
7.2 Conclusion
Economist specialist says that the outcome of 2012-2013 may not continue
in near future because international pressure is increasing day by day on
RMG particular issues. So it is very important task of government to resolve
the all problems of garments workers like maintaining workplace safety and
international standard hour working and standard figure of salary, bonus as
well as overtime payment.
One of the ways to empower workers may be by following Toyota Production

System in manufacturing. Role of Trade Union and Labor Rights Conflicting
Relationship with First Line Supervisors Demand for Work-life Balance Need
for Self-respect and Participation Job Turnover and Absenteeism Efficiency
and Productivity of Workers Motivational Issues should be reviewed sincerely.

BBA
However, all negative things, we strongly believe Bangladesh can be a

country to watch in the next decade for development faster than others third
world if the government take step to reduce import of those products are
expensive that make deficits of trade every year and make our economy
slower. Bangladesh can reduce some items of imported products as
agriculture based economy by producing those like soya bean and palm oil,
raw cotton and so on.
We have found also the biggest obstacles to sustainable development in

Bangladesh are also overpopulation, poor infrastructure, corruption, political
instability and a slow implementation of economic reforms. So the government
of Bangladesh should be active to solve those all problems to increase GDP
by giving favorable environment to establish new industry will reduce imported
products that will carry exponential growth continually and impact on our
economy as well as to neighboring nations.

BBA
Chapter 8: Bibliography
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INTERNATIONAL TRADE OF BANGLADESH &

1.1 BACKGROUND OF THE STUDY

 To give a concrete idea about the export and import activities of

 To know the various terms of export and import.

IBAIS University, Dhaka, Bangladesh Page 2

 To know the present, past and potential or future trading of

In this Term Paper, we have discussed the composition, performance,

 To fulfill partial requirements of course completion of the International

IBAIS University, Dhaka, Bangladesh Page 3

It is very known that, international Business is considered as a big path for

IBAIS University, Dhaka, Bangladesh Page 4

1.6.1 Data Collection

This research is basically descriptive in nature and from the secondary

1.6.2 Sources of primary data: Not available in this term paper.

o Official websites of Central bank of Bangladesh.

IBAIS University, Dhaka, Bangladesh Page 5

1.7 LIMITATIONS OF THE STUDY

IBAIS University, Dhaka, Bangladesh Page 6

Chapter >2: Literature Review

 Production possibility frontier.

IBAIS University, Dhaka, Bangladesh Page 7

depict a specified quantity produced if all resources were used to produce

IBAIS University, Dhaka, Bangladesh Page 8

IBAIS University, Dhaka, Bangladesh Page 9

IBAIS University, Dhaka, Bangladesh Page 10

IBAIS University, Dhaka, Bangladesh Page 11

According to the expenditures method of calculating gross domestic product,

IBAIS University, Dhaka, Bangladesh Page 12

(the importers) to overseas entities (the exporters).However, imports per se

Consider an electronic component priced at $10 in the U.S. that will be

IBAIS University, Dhaka, Bangladesh Page 13

IBAIS University, Dhaka, Bangladesh Page 14

A nation’s merchandise trade balance report is the best source of information

While data on a nation’s exports and imports of physical goods can be

IBAIS University, Dhaka, Bangladesh Page 15

IBAIS University, Dhaka, Bangladesh Page 16

Numerous factors affect a country’s trade balance. These include:

The utility of trade balance data as an economic indicator depends on the

IBAIS University, Dhaka, Bangladesh Page 17

The balance of trade is a key indicator of a nation’s health. Trade balance

Chapter: 3: An Overview Of Bilateral Trade Among SARCC Nation’s

IBAIS University, Dhaka, Bangladesh Page 18

1. Asia Pacific Trade Agreement (APTA)

IBAIS University, Dhaka, Bangladesh Page 19

3.2. Bangladesh-Bhutan Bilateral Trade

Year Export Import Trade Ratio

Major Export Items:

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3.3 Bangladesh-India Trade

Value in Million Taka (Value in Million US $)

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3.6 Bangladesh - Maldives Trade

Value in Million Taka

Value in Million Taka (Value in Million US $)

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article (2.40), Electrical machinery and equipment (0.53) etc.

3.8 Bangladesh - Pakistan Bilateral Trade

Value in Million Taka (Value in Million US $)

Raw jute (45.81); Tea (9.16); Chemical Products (2.88); Agree-

3.10 Major import items (Value in million US$) (2007-08)

Cotton (129.73); Cereals (8.95); Sugar and sugar confectionery