Despite the current halt of Bangladesh readymade garments (RMG) export to Russia due to Russia’s military operation in Ukraine, an opportunity has been created to sell a larger volume of apparel to the European country in the near future.
It was earlier feared that the Russia-Ukraine war would affect Bangladesh economy, including the RMG sector, as Russia is one of the potential and emerging markets for Bangladesh RMG exports.
Experts, however, say the situation is not alarming for the sector as Russia is trying to import a larger quantity of apparel from Bangladesh with many other countries stopping the sale of products to Russia over the war.
Shipping lines’ unwillingness to carry goods to the war zones and the economic sanctions imposed by the United States and several other Western countries on Russia have made it difficult to ship goods to Russia.
Russian Ambassador in Dhaka, while talking to newsmen recently, however, floated an idea of introducing barter trade with Bangladesh suggesting that Dhaka can send RMG to Moscow in exchange for different goods from that country skipping the use of any currency.
RMG exporters say Russian importers in greater numbers are contacting them and discussing the purchase of apparel from Bangladesh as they are facing problems in sourcing products from many other countries.
“We’re working on their samples. We hope the export to Russia will make a leap. But it will take some time for maturity,” said Glorius Sun Fashion Garments Ltd Managing Director Muhammad Rubaet Ahmed while talking to the Bangladesh Post.
Prof Mustafizur Rahman, an eminent economist and distinguished fellow at the Centre for Policy Dialogue (CPD), said though the factory owners whose consignments have been delayed and payments stuck are facing problems, but the entire RMG sector is not suffering that much.
He, however, expressed fear that if the war continues for long, it might have an effect on the European Union market, one of the top export destinations of Bangladesh.
“Bangladesh’s export to the EU countries might be affected in that case,” he added.
Dr Nazneen Ahmed, Country Economist at UNDP (United Nations Development Programme), echoed Mustafizur’s views.
She said Russia is still not a significant export destination for Bangladesh and thus would not make a huge impact on the total export volume.
Bangladesh exports apparel worth only US $600 million to Russia out of its entire $40 billion overseas sales.
Talking to the Bangladesh Post, BGMEA First Vice-President Syed Nazrul Islam said RMG export to Russia has stopped and the factory owners who had received orders from that country are not in a good state.
According to Export Promotion Bureau (EPB), Bangladesh exported garment products worth $593 million to Russia in the fiscal year 2020-2021.
Russia has recently come under a wide range of sanctions imposed by a number of countries with the European Union blocking Russian banks’ access to the SWIFT (Society for Worldwide Interbank Financial Telecommunication) international payment system, thus creating a major challenge for the trade with the European country.