The Apparel Digest Report Analysis
In recent years, there has been a significant shift in the export climate of Bangladesh, with South Korea emerging as an important destination for Bangladeshi commodities. The most crucial factors that have contributed to this expansion include strategic efforts, beneficial trade policies, and a common objective of fostering economic cooperation between the two nations being discussed. In the past, most Bangladesh’s export efforts were concentrated on well-established markets in Europe and North America. Despite this, Bangladeshi exporters have embarked on a journey to explore new horizons after coming to the realization that diversification is necessary and that East Asian markets offer untapped potential. South Korea has emerged as a viable market for Bangladeshi exports.
The textile and garment industry are the primary contributor to Bangladesh’s economy. This sector has been at the forefront of the country’s export expansion by capitalizing on its expertise in producing high-quality clothes at prices that are affordable. With the major introduction of growing industries such as pharmaceuticals, ceramics, and leather products into the South Korean market, Bangladesh’s export portfolio has become broader, and the country’s economy has become more robust. This is a direct effect of the South Korean market. When it comes to opening markets and addressing regulatory concerns, the establishment of productive relationships between politicians, trade groups, and industry players has been necessary. Initiatives that foster business-to-business interactions, participation in international trade fairs, and bilateral trade missions have produced an environment that is both friendly and conducive to the collaboration of businesses in the trade sector.
In the five years leading up to the fiscal year (FY) 2016–17, Bangladesh’s export trajectory to South Korea has been historically relatively low, with annual shipments ranging from $200 million to $300 million. This is a significant decrease from the previous five years. On the other hand, this trend experienced a significant turnaround because of the dedicated efforts of exporters and the legislative support for trade. Over the subsequent years, there was a steady rise in exports, which reached a considerable peak in the fiscal year 22 (FY22), when the amount of goods sent to South Korea surpassed the threshold of half a billion dollars. Exports had a spectacular 18% year-over-year growth, totaling $624 million, which showed that the rising trajectory continued into the fiscal year 23. The Export Promotion Bureau (EPB) reports that this development trend maintained during the first half of the current fiscal year, with exports growing by an additional 7% year over year to cross $330 million. Over the course of this period, exports have surpassed $330 million.
This increase in exports to South Korea is particularly remarkable because Bangladesh’s export landscape has always been dominated by shipments to Western nations, primarily those in Europe and North America. As a result of the fact that a significant majority of Bangladesh’s garment exports are destined for the United States of America, the United Kingdom, Germany, and nine other Western countries, efforts to diversify trade destinations have gathered steam in recent years. Since January, the East Asian nation has offered duty-free and quota-free admittance to most Bangladeshi products. This is one of the primary reasons for the rise in the amount of goods that are being exported to South Korea. By encouraging manufacturers to research and capitalize on the immense potential of the South Korean market, this legal amendment has increased exports. This has resulted in a considerable increase in exports.
The coordinated efforts of the industry’s stakeholders have also been a key contributor to the expansion of exports. These efforts have been backed by government assistance in the form of a 4% cash incentive on shipments to new markets until the 31st of December of the previous year. Although the rate was reduced to three percent on January 1 of this year, the policy aid continues to assist exporters in becoming more competitive and confident when entering new markets.
Finally, the journey that Bangladesh has taken in terms of exports to South Korea over the course of the past five years is a fascinating tale of strategic diversification, policy backing, and industry longevity. As a result of Bangladesh’s strategic utilization of market opportunities, its dedication to innovation, and its commitment to maintaining quality standards, the nation is in an excellent position to increase its market share in South Korea and therefore to strengthen the economy of the country.
