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Tuesday, Apr 16, 2002

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Dhaka ban on cotton yarn imports irks textile trade

Badal Sanyal

The National Board of Revenue of Bangladesh imposed the ban on imports of Indian yarn with effect from March 11, while the decision to increase the import duty on Indian yarn from 7.5 per cent to 17.5 per cent was announced on Saturday.

KOLKATA, April 15

THE Bangladesh Government seems to be in the mood to discourage textile mills from using Indian cotton yarn. This is the impression the city-based Chamber of Textile Trade & Industry (COTTI) has got following the ban on exports of Indian yarn to Bangladesh through land ports and the imposition of 10 per cent additional regulatory duty on import of Indian yarn.

The National Board of Revenue of Bangladesh imposed the ban on imports of Indian yarn with effect from March 11, while the decision to increase the import duty on Indian yarn from 7.5 per cent to 17.5 per cent was announced on Saturday. COTTI feels that, as a sequel to these two measures, the landed cost of Indian yarn in Bangladesh will, on an average, be higher by Rs 22 per kg.

Though these measures have upset Indian yarn exporters who dominate the Bangladesh market, necessary arrangements have been made by local exporters to despatch yarn through seaports. A total of 85 containers carrying about 1,400 tonnes of cotton and other types of yarn have been shipped from Haldia port to Chittagong. MV Jammy, a Bangladeshi flag vessel, was fully booked, the shipping being arranged by Hapag Llyod, a P&O containers shipping line. The vessel sailed from Haldia port on April 10.

Mr Pramod Modi, Chairman of the international trade committee of COTTI, told Business Line he was happy that a good start had been made to exports of cotton yarn by sea. But he hastened to add that the shipping cost from Haldia to Chittagong was still prohibitively high. While the shipping freight from Mumbai to South Korea was just $300 per 40 FCL (full cargo load), the comparable Haldia-Chittagong service was costing as much as $900-$1,000.

He said that this was all the more surprising because while the Korea-Mumbai trip took about 15 days, it took just two days to sail from Haldia to Chittagong. The other disadvantages were: High container stuffing charges being demanded by unionised dockhands and high local transportation charges. He said Indian exporters were being made to pay through their nose for the ban on exports by land.

Meanwhile, the Union Commerce Ministry has linked duty-free access for 40 items from Bangladesh to India with the lifting of the Bangladesh ban on the import of sugar and yarn from India through land ports. The matter is reported to have been referred by the Dhaka Government to the Bangladesh National Board of Revenue.

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