Such businesses are also struggling with customs-related issues, with 60 per cent of survey respondents reporting mismatches in harmonised system (HS) codes during raw material imports.
Two-fifths of Bangladesh’s garment businesses are grappling with delays in opening letters of credit due to a shortage of US dollars, a Bangladesh Institute of Development Studies survey revealed.
Such businesses are also struggling with customs-related issues, high bank charges and delayed payments from buyers.
Forty-six per cent of the respondents recommended lowering bank transaction costs.
The study, conducted in June covering 63 firms with focus group discussions with RMG suppliers and stakeholders, also highlighted issues like high bank charges and delayed payments from buyers.
The findings were shared recently at the Annual BIDS Conference on Development 2024 in Dhaka.
Forty-six per cent of the respondents recommended lowering bank transaction costs, while others emphasised introducing telegraphic transfers, maintaining a uniform USD exchange rate, standardising LC charges across banks, reducing tax rates and adopting advanced technologies, according to domestic media reports.
The country faces extended lead times due to its geographic location and reliance on transshipment hubs like Singapore and Malaysia. Unlike Bangladesh, competitors like China, India and Cambodia benefit from greater self-sufficiency in shipping logistics, the report noted.
Another study presented at the conference revealed a 50 per cent rise in technological efficiency could result in the loss of nearly 1.8 million jobs in Bangladesh, with the textile and RMG sector being the most affected. Ten lakh job losses are expected in the RMG sector alone.
The study also identified other vulnerable sectors like leather goods, furniture, plastics and rubber.
Fibre2Fashion News Desk (DS)
