Impact of International Trade in Bangladesh Economy

BBA
INTERNATIONAL TRADE OF BANGLADESH &

ITS 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.
Bangladeshs import needs are substantial; hence the
need to rapidly increase exports is immediate. In order
to finance the imports and also to reduce the countrys
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 Bangladeshs export
and import performance compared to various countries,
regions and the world over the years. We also discuss
the sources of Bangladeshs imports and directions of
Bangladeshs 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:
IBAIS University, Dhaka, Bangladesh
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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.

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
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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 holds especially true for products that arent
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
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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 companys prospective market is
situated out of the country. And it just wont 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 wont 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
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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 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.
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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:
paper.
Not available in this term
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
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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 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
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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 nations 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.
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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 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 economys 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
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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
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issues with other countries. There will be up and down

times that each country will face when attempting to
trade a good or service 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
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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 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.
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"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
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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 countrys GDP is sent off
abroad as Bangladesh exports instead of being enjoyed
by the countrys own people, it also allows for a steady
influx of foreign currency. Currently Bangladeshs 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 countrys 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 countrys 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 economys annual GDP is
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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, lets
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 (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. Its 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
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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 countrys
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 nations 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.
Lets 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
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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 versus the Taka has thus
diminished the U.S. exporters 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 exporters 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
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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
worlds 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 interest rate differential
between two nations is 2%, the currency of the higherinterest-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
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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 nations 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

nations 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
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While data on a nations exports and imports of

physical goods can be collated from customs
documents such as export declarations and import
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 Departments
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

BEAs estimates of service transactions between
foreign countries and the U.S., based on periodic
surveys and partial information from monthly reports.
BBA

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
Numerous factors affect a countrys 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 nations trade balance.
BBA

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.
BBA

Chinas 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 Canadas 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 Indias 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 nations

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
BBA

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 nations economic
performance.
Chapter: 3: An Overview Of Bilateral Trade Among SARCC Nations
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
meeting
SAARC Preferential Trading Arrangement (SAPTA)
AARC Preferential Trading Arrangement (SAPTA)
The Agreement on South Asian Free Trade Area

(SAFTA)
SAARC Framework Agreement on Trade in Services
Trade
Negotiating
Committee
(TNC)
BBA

(SAFAS)
7
Bilateral FTA with India, Pakistan and Sri Lanka
Standing Committee for

Cooperation (COMCEC)
Economic
and
Trade
Standing Committee for

Cooperation (COMCEC)
Economic
and
Trade
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
Development (UNCTAD)
on
Trade
and
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)]
BBA

3.2. Bangladesh-Bhutan Bilateral Trade
Value in Million Taka (Value in Million US $)
BBA

Trade
Year
Export
Import
199900
40.50 (0.80) 220.60 (4.38) 1 : 5.47
200001
63.64 (1.18) 305.10 (5.65) 1: 4.79
Ratio
200191.37 (1.57) 225.00 (3.92) 1: 2.50

02
3.3 Bangladesh-India
Trade
200203
91.17 (1.57) 18.90 (2.74)
200304
172.54 (2.93) 330.20 (3.35) 1: 1.14
200405
287.95 (4.65) 528.30 (8.60) 1:1.84
200506
101.74 (1.52) 784.00 (11.68)1: 7.68
200607
96.60 (1.40) 689.30 (9.98) 1: 7.39
200708
92.61 (1.35) 942.50 (13.73)1:10.18
200809
42.09 (0.61) 836.50 (12.12)1:19.87
200910
154.96 (2.24) 8289 (11.98)
201011
222.48 (3.12) 1325.5 (18.58)1: 5.95
1: 1.74
1: 5.35

BBA

Year
Export
1998-99 2870.14(59.74)
1999-00 3264.11(64.88)
2000-01 3329.49(62.28)
2001-02 2865.96(50.28)
2002-03 4868.23(84.08)
2003-04 5261.57(89.27)
8869.13
(144.19)
16262.13(241.9
2005-06
6)
19969.98(289.4
2006-07
3)
24564.29(358.0
2007-08
8)
18391.95
2008-09
(274.26)
2009-10 21074 (304.62)
2010-11 36040 (512.51)
2004-05
3.4
Import
Trade
Ratio
59350.90(1234.93
1: 13
)
41889.00(832.62) 1: 19
63887.20(1183.39
1: 17
)
58109.82(1019.47
1: 20
)
78453.50(1352.64
1: 16
)
94438.20(1602.27
1: 18
)
124646.30
1: 14
(2042.06)
125330.00(1864.7
1: 8
4)
156636.00(2268.1
1: 8
1)
232138.60(3383.9
1:9
4)
186093.00
1:10
(2863.19)
159586 (3202.8) 1:10.5
320659 (4560)
1:8.9
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
IBAIS
University,
Dhaka, Bangladesh
Page 31
tramway-rolling stock and parts and accessories
BBA

3.6 Bangladesh - Maldives Trade
Value in Million Taka

Year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Export
0.48
0.02
0.27
0.08
0.14
0.74
0.93
Import
0
0
0
0
0
0.86
1.44
Bangladesh - Nepal Trade
Trade Ratio
3.7
1:1.16
1:1.55
BBA
INTERNATIONAL
TRADE
OF BANGLADESH
&
Value
in Million Taka (Value
in Million
US $)
ITS IMPACT
ON ECONOMY
Year
Export
Import
Year
Export
Import
Trade
Trade
Ratio
Ratio
1996-97
1659.20(38.97
2872.40
(67.26) 1:
1: 3.24
1.72
2000-01
108.38(2.01)
352.20(6.53)
)
1997-98
2026.67(44.67 3638.34(80.03) 1: 1.79
2001Value
in Million
Taka (Value 191.80(3.34)
in Million US $)1: 1.14
168.04(2.92)
2002 )
1998-99 1829.47(38.13 3979.00(82.79) 1: 2.17
Year
Export
Import
Trade Ratio
) 190.91(3.29) 320.90(5.54) 1: 1.68
2002-03
1999-00 238.76(4.77) 420.20(8.35) 1 : 1.75
1999-00 1597.34(31.75 4212.10 (83.72) 1 : 2.64
2000-01 141.37(2.62) 431.00(7.98) 1: 3.04
) 150.36(2.55) 242.80(4.12) 1: 1.61
2003-04
2001-02
118.88 (2.07) 352.60(6.10) 1:2.94
2000-01 1715.00(32.08 5142.38(95.30) 1: 2.97
2002-03 217.49(3.76) 462.30(7.98) 1: 2.12
) 290.81(4.74) 105.20(1.71) 1: 0.36
2004-05
2003-04
610.42(10.35) 578.87(9.82) 1: 0.94
2001-02 1642.50(28.60 3866.00(67.32) 1: 2.35
2004-05 683.11(11.11) 631.60(10.29) 1:0.93
) 305.00(4.55) 180.60(2.69) 1: 0.59
2005-06
2005-06
888.81(13.25) 728.30(10.86) 1: 0.82
2002-03 1857.00(31.51 5331.70(92.08) 1: 2.92
2006-07 )1023.47(14.82 1131.10(16.37)1: 1.10
) 58.592
2006-07
411.7 (5.96) 1:7.02
2003-04 2659.68(45.11
6637.80(112.62)
1: 2.49
(0.848)
2007-08 )1325.35(19.32 1047.20(15.26)1: 0.78
)
2004-05 3942.35(64.09 8578.00(139.46)
1: 2.21
3632.8
2008-09
1283.56(18.67
1276.70(18.57)1:
0.99
2007-08
1:7.90
) 460.16 (6.70) (52.95)
)
2005-06 2880.71(57.74 10072.90(149.87 1:2.60
2009-10 )1642.33(23.74)1574.8(22.76) 1: 0.95
) 604.06 (8.78) 4728.5
2008-09
1:7.82
2006-07 4243.05(61.06 12983.80(188.00
1: 3.08
(68.73)
2009-10 )1642.33(23.74)1574.8(22.76) 1: 0.95
)
2007-08 4871.27(71.01 16393.50(238.97
1: 3.36
2984.3
2010-11
2476.5
(34.73)
1966.4
(27.57)
1:
0.79
2009-10
556.8
(8.78)
1:4.91
)
) (43.13)
2008-09 5243.25(76.21 19840.00(280.37 1: 3.67
3.12 Major export items in 2008-09 (value in million US$):
)
) 3455.8
2010-11
773
(10.84)
1:
4.47
2009-10 5373.14
22393.56
1:4.16
(48.46)
Chemical
products (7.63),
Jute goods (1.12),
Agri(77.67)
(323.7)
products (0.66), Knitwear (3.02), Woven garments
2010-11
(669.3)
1:7.71
Major
export
items from 4765.17
Bangladesh
to Nepal
in 2004(1.02)
etc.6103.07
05 (Value (86.79)
in million Tk)
3.13 Major import items
in 2008-09
(value
in million
US$) :
Pharmaceutical
Products
(0.23),
Fertilizer
(1.33),
3.9 Major export items (Value in million US$) (2008-09)
Textile and Textile article (2.40), Electrical machinery
Chemicals Products (5.09), Plastic and plastic
and equipment (0.53) etc.
products (0.53), Rubber and rubber products (0.59),
Major
import
items
into
Bangladesh
in 2004-05
(Value
Raw
jute
(45.81);
Tea
(9.16);
Chemical
Products
Cotton
(2.83),
Man-made
filament
(1.23),
Transport
in
million
Tk)
(2.88);
Agree-products
Jute goods
(3.18)etc.
etc.
equipment,
electric and(3.16),
machinery
equipment
Edible Vegetable and certain roots and tubers (0.92),
Residues
waste
from food
industries
(0.21),
Sources: Exportand
Statistics,
EPB &Bangladesh
Bank, Import
Statistics, Bangladesh
Bank
Cereals
(0.32)
etc.
3.10 University,
Major
import
items
(ValuePage
in million
US$) (2007-08)
IBAIS
Dhaka,
Bangladesh
33
Information Source: EPB & Bangladesh Bank.
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),
BBA

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.
BBA

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
BBA

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.
Figure: 1
4.2 Major Product - Wise Export of Bangladesh
Amounts in Million US$
BBA

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
1
Category
Agar Products/Agar Wood
BBA

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Agricultural Equipments
Animal Casing
Agricultural Equipments-1
Aluminums Products
Artificial Flowers
Audio & Video (CD, VCD, DVD, VCR, Paper,
Magazine)
Automobile Products
Ball Pen
Bamboo Products
Basket Ware
Batik Items
Battery (Auto)
Battery Dry cells
Beach Chair
Bees Wax
Betel Leaves & Nut
Bi-Cycle
Biscuits
Blade
Blazer And Coats
Blouses, Ladies Shirts & Fashion
Books & Periodicals
Brass Products
Bricks
Broom Sticks
Cables
Candles
Cane Products
Canned Fruits
Canned Fruits
Canvas Shoes
BBA

33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Carbon Rod
Carpet Backing Cloth
Carpet
Carton
Cement Exporters
Cement
Ceramic Products
Chemical Products
Computer Paper
Condensed Milk
Copper Wire
Cotton Waste
Cosmetics
Cotton Bags
Crabs
Crushed Bone
Cut Flower
Data Entry
Dehydrated
Door Shutter
Dry Fish
Dry Foods
Electrical Products
Espadrilles
Embroidery
Fan
Feathers
Fertilizer
Fish Maws
Fish Meals
Fishing Net
Flush Door
BBA

65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
Food Products
Footwear & Leather Goods
Footwear
Fresh Fish
Fresh Fruits & Vegetables
Fruit Juices
Furniture
G I Pipe
Galantine
Gift Items
Glass Products
Gloves
Grey Fabrics
Hand Bags
Hand Made Paper
Handicrafts
Handloom Products
Hanger
Herbal Medicine
Hessian Cloth
Home Textiles-Specialized Textiles Exporter
Honey
Hooves
Human Hair
Jam & Jelly
Jamdani Sharee
Jewelers
Jute Backing Cloth
Jute Braid
Jute Goods
Jute Mat
Jute Shoes
BBA

97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
Jute Yarn & Twine

Jute Shopping Bag
Kitchen Ware
Knitwear
Leather (Crust & Finished)
Leather Garments
Leather Products
Light Engineering Products
Home Textiles-Specialized Textiles Exporter
List Of Firms Approved By EU
List Of Knitwear Exporters
List Of Oil Cake Manufacturers
List Of Readymade Garments Exporters
List Of Tea Exporters
List Of The Members Firm Of Bffea_Usa
Luggage, Toys & Fashion Products
Marine Fish
Matches
Meat & Meat Products
Medical Equipment
Melamine Products
Metal Products
Molasses
Mosquito Net
Ms Pipe
Mushrooms
Muslin
Nakshi Katha
Naphtha
Newspaper
Newsprint
Oil
BBA

129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
Orchid-Plants
Paper Board
Particle Board
Pharmaceuticals
Pink Pearl
Plastic Products
Plastic Sheets
Plywood
Poly Bags
Potato Flakes
Potato
Pottery
Poultry Feed
Poultry
Printing Materials
Processed Fruits
PVC Cables
PVC Pipes-PVC Products
Quilt
Raw Cotton
Raw Jute
Readymade Garments-1
Refr Actory Bricks
Refrigerator
Rice
Rubber
Sanitary Ware
Seed
Sewing Thread
BBA

161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
Shark Fins
Shark Meat
Shell Products
Shopping Bags
Shrimps
Silk Fabrics
Silk Sharee
Soap (Toilet)
Socks, Vest, Rompers, Stuffed Toys, Quilts
Soft Drinks
Software & It Service
Spices
Sports Shoes
Stationary Products
Sugar
Tapestry
Tarpaulins
Tea
Telecommunication
Television
Tent
Terry Towel
Textile Fabrics
Tiles
Timber
Tissue Paper
Tobacco
Tooth Brush
Transformer
Travel Bags
Twill
Tyre
BBA

193
194
195
196
197
Umbrella
Ups
Watch
Wooden Products
Yarn
4.4 Trend-in-Export-Trade and Product-Wise Structural Change

over 4 Decades
Woven
Garments
4.4.1 Export from Bangladesh
1972-73
to 2008-2009 38.25%
Trend-in-Export-Trade (In product & market)

BBA

1972-73
Growth
ITS IMPACT ON
ECONOMY 2008-2009
No.
of25
Product
No. of Market 68
173
592%
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
4.4.4 Export By Major Products ( Upper one)
BBA

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)
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%
BBA

08.
Other
Table : 3
4.8 Export Chart Data at a Glance
1.8%
BBA

Chart: 1
4.9 Bangladesh exports to several countries of the world
BBA

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.
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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
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.
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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 selfsufficiency 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 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,
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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 Bangladeshs biggest export earner with value of
over $ 16 billion of exports in 2009-10. Our factories
design and produce for the worlds 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
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RMG EXPORTS AND IT'S SHARE IN TOTAL EXPORT OF BANGLADESH
Export Of RMG
(In Million Us$)
Year
Total Export Of
Bangladesh
(In Million Us$)
% Of RMG's To
Total Export
1983-84
31.57
811.00
1984-85
116.2
934.43
1985-86
131.48
819.21
1986-87
298.67
1076.61
1987-88
433.92
1231.2
1988-89
471.09
1291.56
1989-90
624.16
1923.70
1990-91
866.82
1717.55
1991-92
1182.57
1993.90
1992-93
1445.02
2382.89
1993-94
1555.79
2533.90
1994-95
2228.35
3472.56
1995-96
2547.13
3882.42
1996-97
3001.25
4418.28
1997-98
3781.94
5161.20
1998-99
4019.98
5312.86
1999-00
4349.41
5752.20
2000-01
4859.83
6467.30
2001-02
4583.75
5986.09
2002-03
4912.09
6548.44
2003-04
5686.09
7602.99
2004-05
6417.67
8654.52
2005-06
7900.80
10526.16
2006-07
9211.23
12177.86
2007-08
10699.80
14110.80
2008-09
12347.77
15565.19
2009-10
12496.72
16204.65
2010-11 (July3971.52
5029.05
Sep)
Data Source Export Promotion Bureau Compiled by BGMEA
3.89
12.44
16.05
27.74
35.24
36.47
32.45
50.47
59.31
60.64
61.40
64.17
65.61
67.93
73.28
75.67
75.61
75.14
76.57
75.01
74.79
74.15
75.06
75.64
75.83
79.33
77.12
78.97
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
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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 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
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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
Sub-sector
No.
unites
Textile spinning
341
Textile weaving
400
Installed
machine
capacity
Production
capacity (m)
Manpower
1,600 kg
400,000
25,000 SL/SLL
1,600 mtr
80,000
Specialized textile and

1,065
power loom
23,000 SL/SLL
400 mtr
43,000
Handloom (GF/F)
498,000 handloom 837 mtr
1,020,000
148,342
of
7.20 ml. spld

0.18 ml. rotor
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
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
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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 countrys 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
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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 countrys 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 $19.08 billion in
the FY 12. Garment industry people and many of the
experts, however, were shaky about achieving the
target for FY 2013-14 against the backdrop of Rana
Plaza collapse that killed more than 1,100 garment
workers in April. The Rana Plaza incident and the
Tzaneen Fashions fire that killed 113 workers in
November, 2012 created an international outcry over
the factory safety standard in the country. Bangladesh
Garment Manufacturers and Exporters Association
leaders earlier said that the international buyers were
putting less order in Bangladesh following the Rana
Plaza incident while the impact of the building collapse
would be seen in the export figure in SeptemberOctober.
[Note: we could not find the data of the month of September-October in the website of EPB.]
4.18 Present Challenges in RMG Sector
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Garment industry in Bangladesh is facing multidimensional problems such as acute power crisis
followed by non tariff restriction, chronic labor unrest,
lack of infrastructural facilities, inadequate supply of
material and accessories, inability or lack of efforts to
diversify the products and markets, irregularities
relating to customs, bond, and shipping (Uddin and
Jahed 2007). These major problems disrupt the
production and increase the cost of production
significantly. Weak and inadequate infrastructures such
as poor energy supply, poor port facilities are the
common challenges facing by the RMG sector in
Bangladesh (Rahman and Anwar 2007). Another
problem is port congestion. RMG sector often faces
huge losses due to the inefficiency of Bangladesh port.
To remain competitive in the world market one of the
important
strategies
is
product
and
market
diversification (Rahman and Anwar 2007). Moreover,
natural calamity often affected garment industry. For
instance, due to the flood in 1998, garment order of Tk
1,000 (US$ 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
Bangladeshs 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
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productivity gains in the case of RMG sector (Berik and

Rodgers 2008). RMG exports are also 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
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Bangladesh.
It
suggests
that
better
export
diversification beyond clothing is needed garments
account for more than 75% of Bangladeshs 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
countrys Sixth Five-Year preparation. Lead country
economist at The World Bank, Sanjay Kathuria said:
While
Chinas
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.
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, Bangladeshs 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
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report estimates, still if raw materials are sourced from

out of the country. In the meantime, it warns that
Bangladeshs 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 governments 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
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(0.60). Overtime allowance is also inadequate in the

garment 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
firms ineffectiveness, low motivation, boredom for
specialized work, rapid technological change and high
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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, owners 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 oclock 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 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
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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
supervisors 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 workers
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 workers 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
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major 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 compliancerelated 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
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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
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
BBA

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 Bangladeshs 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 firsts 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
BBA

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 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
BBA

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-GDPs
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
BBA

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 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 "PreShipment
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
BBA

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)
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.
BBA

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 semisolid palm oil, some kinds of cloth, tendu leaves, undenatured 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
BBA

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).
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
Bangladesh's commerce.
from
entering
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
BBA

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
are required. "To order" B/Ls is acceptable. For
airfreight, an air waybill (AWB) is required.
BBA

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
BBA

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 list of participating
countries). Initiating and governing authority for ATA
Carnets is the International Chamber of Commerce
(ICC).
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.]
[Note:
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
BBA

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.
5.17.2 Import of Bangladesh, 1970-2012
BBA

Figure: 2
5.17.3 Import per capita in Bangladesh, dollars, 1970-2012
BBA

5.17.4 Import share in GDP in Bangladesh, %, 1970-2012
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, 19702012
Bangl
adesh
Year
197
0
197
1
197
2
197
3
197
Myan
mar
India
0.55
0.34
2.4
3.29
0.42
0.35
2.7
3.47
0.6
0.28
2.7
3.58
0.56
0.24
4.1
4.9
0.61
0.21
5.9
6.72
Total
BBA

4
197
5
197
6
197
7
197
8
197
9
198
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
0.53
0.23
6.8
7.56
1.3
0.24
6.3
7.84
0.88
0.3
7.5
8.68
1.5
0.47
9.1
11.07
1.8
0.65
12
14.45
2.6
0.71
17
20.31
2.6
0.78
17
20.38
2.6
0.82
17
20.42
2.5
0.65
18
21.15
2.6
0.61
17
20.21
2.7
0.57
18
21.27
2.5
0.33
18
20.83
2.8
0.29
20
23.09
3.2
0.2
23
26.4
3.7
0.13
25
28.83
3.9
0.19
28
32.09
BBA

199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
3.7
0.15
25
28.85
3.8
0.13
28
31.93
4.5
0.14
28
32.64
4.7
0.13
33
37.83
6.6
0.13
45
51.73
7.4
0.13
45
52.53
7.4
0.12
51
58.52
7.8
0.062
54
61.862
8.4
0.049
62
70.449
8.7
0.043
66
74.743
9.8
0.04
66
75.84
0.027
78
87.027
10
0.017
94
104.017
12
0.013
138
150.013
13
0.011
184
197.011
15
0.014
230
245.014
18
0.014
295
313.014
BBA

7
200
8
200
9
201
0
201
1
201
2
23
0.022
371
394.022
24
0.022
340
364.022
25
0.037
448
473.037
34
9.1
583
626.1
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
BBA

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
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
BBA

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
0.01
91.99
100.0
2005
6.6
0.01
93.4
100.0
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
13
1971
13
1972
10
1973
1974
10
1975
11
1976
18
10
1977
12
12
BBA

1978
19
14
14
1979
22
19
18
1980
32
21
24
1981
31
22
24
1982
30
23
23
1983
28
18
24
1984
28
16
22
1985
29
15
23
1986
26
23
1987
28
24
1988
31
28
1989
35
29
1990
36
32
1991
34
28
1992
34
31
1993
39
30
1994
40
35
1995
55
47
1996
60
46
1997
59
51
1998
61
54
1999
65
60
2000
66
63
2001
73
62
2002
66
72
BBA

2003
72
86
2004
85
124
2005
91
163
2006
104
201
2007
123
255
2008
155
316
2009
161
286
2010
165
372
2011
222
174
477
2012
233
189
478
5.18.4 Import share in GDP in Bangladesh and its neighbors, %, 19702012

Year
Bangladesh
Myanmar
India
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
7.1
6.4
1978
10.7
10
6.7
1979
10.6
12
1980
13.7
12
9.2
1981
13.7
13.2
8.6
BBA

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
1986
10.9
6.6
7.3
1987
10.8
5.9
7.3
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
BBA

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
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
Year
Bangladesh
Myanmar
India
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
BBA

1986
92.6
57.9
100
1987
112
87.9
111.1
1988
114.3
69
115
1989
115.6
65
108.7
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
BBA

2010
104.2
168.2
131.8
2011
136
24594.6
130.1
2012
105.9
109.9
101.4
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
Banglad United
esh
States
Chin Germa Japa Great

a
ny
n
Britain
1970 0.55
56
2.5
37
20
27
1971 0.42
62
43
21
29
1972 0.6
74
3.8
51
25
34
1973 0.56
91
5.2
68
42
46
BBA

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
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
BBA

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
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
103
1335
4
699 835
2008 23
2556
123
1517
2
849 850
2009 24
1976
111
1238
3
621 663
2010 25
2362
152
1389
0
768 742
2011 34
2670
189 1648
947 827
BBA

8
2012 36
2743
207
1572
0
992 835
5.20.2 Import per capita in Bangladesh and leaders, dollars,

1970-2012
Year
Banglad United
esh
States

a
ny
n
Britain
1970 8
267
467
193 485
1971 6
293
541
200 520
1972 9
346
640
234 608
1973 8
422
853
389 820
1974 9
589
1091
612 1122
1975 7
561
1204
578 1120
1976 18
682
1381
643 1173
1977 12
814
1584
708 1315
1978 19
939
16
1901
807 1545
1979 22
1110
25
2484
110
2043
4
1980 32
1277
34
2918
134
2380
6
1981 31
1368
35
2543
141
2149
2
1982 30
1291
28
2420
129 2094
BBA

1
1983 28
1388
27
2385
123
2093
2
1984 28
1691
31
2360
131
2179
6
1985 29
1724
39
2421
124
2247
2
1986 26
1854
34
2998
123
2614
6
1987 28
2062
43
3594
147
3224
9
1988 31
2222
57
3944
189
3901
4
1989 35
2346
59
4186
216
4101
7
1990 36
2475
45
5293
238
4614
0
1991 34
2427
50
5838
239
4393
6
1992 34
2573
58
6175
238
4659
7
1993 39
2745
77
5327
245
4456
0
1994 40
3067
86
5837
274
4945
0
BBA

1995 55
3369
104 7024
330
5673
2
1996 60
3554
118 6967
348
6137
6
1997 59
3846
130 6743
334
6564
3
1998 61
4014
130 7102
278
6782
6
1999 65
4445
149 7282
302
7049
8
2000 66
5179
196 7472
354
7379
8
2001 73
4862
210 7382
323
7316
9
2002 66
4926
253 7480
312
7807
9
2003 72
5272
345 9202
347
8727
8
2004 85
6085
463 10889
413
10336
3
2005 91
6795
540 11916
464
11328
6
2006 104
7447
643 13829
511
12834
3
2007 123
7821
775 15973 549 13695
BBA

3
2008 155
8335
918 18194
666
13859
8
2009 161
6385
824 14883
487
10745
6
2010 165
7565
111
603
16732
11955
8
0
2011 222
8479
138
743
19881
13247
7
8
2012 233
8639
150
779
18986
13300
3
6
5.20.3 Import share in GDP in Bangladesh and leaders, %, 19702012
Year
Banglade United
sh
States

a
ny
n
Britain
1970 7.9
5.2
2.7
17.7
9.6
21.6
1971 6.7
5.3
3.1
17.8
8.9
20.6
1972 8.6
5.8
3.4
17.6
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
4.5
21.9
12.5 29.1
1977 8
8.7
4.3
21.7
11.3 28.8
BBA

1978 10.7
21.1
9.2
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
8.9
25.2
12
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
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
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
26.8
25.3
BBA

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
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
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
29.2
32.3
5.20.4 Import growth dynamics of Bangladesh and leaders, %,

1971-2012
Year
Banglad United
esh
States

a
ny
n
Britain
197
76.4
1
110.7
120
116.2 105
107.4
197 142.9
119.4
126. 118.6 119
117.2
BBA

197
93.3
3
123
136.
133.3 168
8
197
108.9
4
140.7
144.
159.
127.9
137
2
5
197
86.9
5
96.1
98.7 110.3 95.5 100
197
245.3
6
122.8
91.9 114.6
197
67.7
7
120.5
108.
111.
114.5
112.1
8
1
197
170.5
8
116.5
202.
119.8 115
7
117.6
197
120
9
119.3
160
132.2
198
144.4
0
116.2
137.
122.
117.3
116.5
5
8
198
100
1
108.2
106.
87
1
105.
90.3
8
198
100
2
95.3
80
95
92.1 97.5
198
96.2
3
108.6
100
98.4
96.1 100
198
104
4
123.1
114.
98.9
3
135.3
112.
104.8
5
130.5 138
107.
104.2
5
BBA

198
103.8
5
103
128.
102.7 94.9 103.3
1
198
92.6
6
108.6
90.2 124.1 100
198
112
7
112.4
127
198
114.3
8
108.8
136.
128.
110.2
121.3
2
5
198
115.6
9
106.7
106.
114.
106.7
105.4
3
8
199
105.4
0
106.6
76.5 127.2
110.
112.8
2
199
94.9
1
99
113.
111
5
101
199
102.7
2
107.1
118.
106.6 100
6
199
118.4
3
107.8
134.
86.9
3
199
104.4
4
112.9
112.
112.
110.3
111.3
8
2
199
140.4
5
111.1
121.
120.
120.9
115
7
9
199
112.1
6
106.8
114
120.3
99.5
116.5
120.
123.6
1
95.5
106.3
103.
95.9
1
105.
108.5
8
BBA

199
100
7
109.5
111.
96.9
6
199
105.4
8
105.7
100
199
107.7
9
112.1
115.
108.
102.5
104.3
9
9
200
103.6
0
117.8
132.
117.
102.6
105.1
1
4
200
112.6
1
94.8
108
98.9
200
91.8
2
102.3
121
101.5 96.8 107.2
200
111.1
3
108
136.
111.
123.2
112.3
9
4
200
120
4
116.5
135.
119.
118.4
119
2
1
200
108.3
5
112.7
117.
112.
109.4
110.2
3
6
200
115.4
6
110.6
119.
110.
115.9
113.9
8
2
200
120
7
106
121.
107.
115.3
107.3
2
5
200
127.8
8
107.6
119.
121.
113.6
101.8
1
5
96.1 107.3
105.3 83.5 103.7
91.5 99.5
BBA

200
104.3
9
77.3
90.3 81.6
201
104.2
0
119.5
136.
123.
112.2
111.9
6
7
201
136
1
113
124.
123.
118.6
111.5
9
3
201
105.9
2
102.7
109.
95.4
1
5.21 Composition
Bangladesh:
and
Performance
73.1 78
104.
101
8
of
Imports
of
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
BBA

petroleum products increased significantly in FY 200001 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).
5.22 Major Product - Wise Import of Bangladesh
Amounts in Million US$

01.Petroleum Products
20092010-11
10
2021
3280
02.Chemicals
972
1271
966
1319
04.Cotton
1440
2718
05.Yarn
719
1412
Sl. Product
03.
Plastics
Articles
&
Rubber
BBA

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

certification before Customs clearance
under
mandatory
A. Food Products (18 Items):
Sl. No Name of the products

1
Milk Powder and Cream Powder
2
Fruit Cordial
3
Biscuit
4
Sauce (Fruit & Vegetable)
5
Lozenges
6
Tomato Ketchup
7
Jams (Fruits Preserves) & Jelly
8
Marmalade
9
Infant Formula
10
Soybeans Oil
11
Soft Drink Powder
12
Sugar
13
Instant Noodles
14
Fruit or vegetable Juice
15
Edible Sun Flower Oil
16
Chips/Crackers
17
18
19
Standards NO.
BDS/CAC 207:08
BDS 508:2006
BDS 383:2001
BDS 512:2007
BDS 490:2007
BDS/CAC 530:2002
BDS/CAC 79:2008
BDS/CAC 80:2008
BDS CAC 72:2003
BDS 909: 2000
BDS 1586:2007
BDS/CAC212:2006
BDS 1552:2007
BDS 513:2002
BDS CAC 23: 2002
BDS
1556:1997;Amend1:2
004
Taffies
BDS 1000:2001
Honey
BDS /CAC 12:2007
Processed Cereal based Foods for Infants and youngBDS 074: 2007
childrens
B. Chemical Products (08 items):

Sl.
No
1
Name of the products
Standards NO.
Coconut Oil
BDS 99:2007
BBA

2
Skin Cream
BDS 1382:2006
Tooth Paste
BDS 1216:2006
Skin Powder
BDS 1337:2006
Shampoo, Synthetic Deter-gent based
BDS 1269:2002
Lipstick
BDS 1424:2006
Toilet Soap
BDS 13:1994
After Shave Lotion
BDS 1524:2006
C. Textile Product (2) Items

Sl.
No
1
Standards NO.
Polyester blend Suiting
BDS 1175:2001
Polyester blend Shirting (Market Varieties)
BDS 1148:2003
D. Electrical & Electronic Products (07) Items

Sl.
No
1

Primary Batteries:
a) Part-1 General
Standards NO.
BDS IEC
1):2005
b) Part-2 Physical and Electrical Specification
BDS IEC
2):2005
c) Part-3 Watch Battery
BDS IEC
3):2005
d) Part -4 Safety of Lithium batteries
BDS IEC
4):2005
e) Part-5 Safety of Batteries with Aqueous BDS IEC
Electrolyte
5):2005
2
3
4
5
6
7
60086
(Part-
60086
(Part-
60086
(Part-
60086
(Part-
60086
(Part-
Performance & Construction of Electric circulating BDS 818:1998 (BDS 181:

Fans
&
'98, Amend 1: 06)
Regulators (Ceiling & dec head fans, pedestal fans
& table/cabin fans with in-built regulators)
Tubular & other switches for domestic & similar BDS 117:2005
purposes (Push button, Piano etc.)
Tubular Fluorescent Lamps
BDS 292:2001
Ballast for Fluorescent
Lamps PerformanceBDS /IEC 60921:05
Requirements
Two-Pin Plugs & Socket-Outlets Reversible type for BDS 102:2005
domestic use
Three-Pin Plugs & Socket-Outlets
BDS 115:2005
BBA

E. Engineering Products (04) Items
Sl.
No
1
Standards NO.
Cement
BDS EN 197-1:2003
Ceramic Table wares
BDS 485:2006
G P Sheet (Including Corrugated Sheet)
BDS 1122: 2007
Ceramic Tiles- definitions, Classifications characteristics &BDS/ISO

marking
2006
13006:
5.24 Bangladesh Imports by Product Section in US Dollars - Yearly
Section
2010
2011
Live Animals; Animal

$105,764,259
$109,429,766&
INTERNATIONAL
TRADE
OF BANGLADESH
Products
BBA ITS
IMPACT ON ECONOMY
2012
$171,618,433
Vegetable Products
$665,219,787
$1,034,222,203
$1,607,928,144
Animal or Vegetable Fats

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

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

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

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

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

Fibrous Cellulosic
Material; Recovered
(Waste and Scrap) Paper $173,024,827
or Paperboard; Paper and
Paperboard and Articles
Thereof
$219,490,186
$230,763,881
Textiles and Textile

Articles
$2,619,577,970
$2,550,583,616
$2,424,690,835
Footwear, Headgear,
Umbrellas, Sun
IBAIS
University,
Dhaka, Bangladesh Page 109
Umbrellas,
WalkingSticks, Seat-Sticks,
BBA

Source: United Nations Commodity Trade Statistics Database.
5.25 A Major
Products
Imported
Product
by
Bangladesh-Petroleum
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).
BBA

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, 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
BBA

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.
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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
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
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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
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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
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 years estimated import target at about
5.8 million tones of petroleum products to meet the
growing demand from various sectors.
5.26 Petroleums 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
BBA

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.
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
BBA

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
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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:
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
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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
Frozen Food
Jute Goods
Leather
Chemical Products
Raw Jute
Agri Products
Tea
Others
|75.65%
|4.22%
|2.60%
|2.19%
|1.77%
|1.21%
|0.72%
|0.06%
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 Bangladeshs 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
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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.
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 countrys 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.
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Figure: 8
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).
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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.
Bangladesh main imports partners are China (17% of
total), India, Indonesia, Singapore and Japan.
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Figure: 10
Chapter 7: Findings and Conclusion

7.1 Findings
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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
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Economist specialist says that the outcome of 20122013 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.
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
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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.
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BBA

INTERNATIONAL TRADE OF BANGLADESH &

Trade is an integral part of the total developmental

This paper has been prepared from the corner of two

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

To give a concrete idea about the export and

To know the various terms of export and import.

In this Term Paper, we have discussed the composition,

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

trade of Bangladesh. This paper has been made to

There are many factors that discourage local

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

resources that can raise productive efficiency. Simply

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

against the likelihood for high costs and abrupt changes

It is very known that, international Business is

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

o The study will help us to gather knowledge about

This research is basically descriptive in nature and from

Not available in this term

1.6.3 Sources of Secondary Data

o Official websites of Central bank of Bangladesh.

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

The paper has focused mainly on limited items of

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

Chapter >2: Literature Review

International trade has truly expanded to encompass

IBAIS University, Dhaka, Bangladesh

INTERNATIONAL TRADE OF BANGLADESH &

benefit of the WTO is that they allow for trading on

Production possibility frontier.

The production possibilities frontier is a curve that

IBAIS University, Dhaka, Bangladesh Page 10

INTERNATIONAL TRADE OF BANGLADESH &

television sets on the other side of the frontier.

IBAIS University, Dhaka, Bangladesh Page 11

INTERNATIONAL TRADE OF BANGLADESH &

The simulation focused on trade policy and the terms of

INTERNATIONAL TRADE OF BANGLADESH &

and the other an unstable agrarian economy with a

IBAIS University, Dhaka, Bangladesh Page 13

INTERNATIONAL TRADE OF BANGLADESH &

issues with other countries. There will be up and down

The idea of trade between nations has been around for

INTERNATIONAL TRADE OF BANGLADESH &

delimitation of exports in national accounts is given

IBAIS University, Dhaka, Bangladesh Page 15

INTERNATIONAL TRADE OF BANGLADESH &

"Imports" consist of transactions in goods and services

IBAIS University, Dhaka, Bangladesh Page 16

INTERNATIONAL TRADE OF BANGLADESH &

the international market. This means that it is far more

According to the expenditures method of calculating

INTERNATIONAL TRADE OF BANGLADESH &

the sum total of C + I + G + (X M), where C, I and G

IBAIS University, Dhaka, Bangladesh Page 18

INTERNATIONAL TRADE OF BANGLADESH &