Bangladesh will lose duty-free access given by the European Union (EU) on readymade garment (RMG) exports in 2020 as it is expected to cease being a ‘least developed nation’ by then. If the central government provides adequate support to the industry then exporters could reap the benefits of Bangladesh’s loss. As per data from the United Nations Conference on Trade and Development, Bangladesh’s per capita income stood at $1,355 in 2016, a 39 per cent increase compared to 2013 ($974).
By 2020, its per capita income is predicted to overtake India’s, which stood at $1,706 in 2016. As per the World Trade Organisation, if the country’s per capita income remained more than $1,000 continuously for three years, it could be classified as a developing nation. Bangladesh may become a developing nation with a fast-growing economy.
Since the duty-free access given by the EU was one of main advantages enjoyed by exporters in Bangladesh, Tirupur knitwear exporters have been repeatedly saying that there was no level playing field. They have been urging the government to provide adequate sops to sustain the industry. Tirupur Exporters Association (TEA) president Raja M Shanmugham stated Indian exporters may not benefit even though Bangladesh is predicted to be stripped of the duty-free access by the EU.