DHAKA: Bangladeshi garment exports to Russia have not been disrupted by international sanctions on Moscow, businessmen say, as most of their transactions are made through third countries.
The textile sector is the No. 1 industry in Bangladesh, employing over 4 million people, contributing over 11 percent of the country’s gross domestic product and accounting for 80 percent of its exports.
Russia is a growing destination for Bangladeshi producers and last year imported garments worth about $600 million.
When a host of Western sanctions hit Moscow, following its invasion of Ukraine in February, some Russian banks were banned from the Swift system.
Bangladeshi exporters were initially jittery about the future of their trade, but so far their businesses have not been largely affected, as according to the central bank, most of the transactions are not settled directly with Russia.
“Apart from the Russian banks under sanctions, transactions with other Russian banks are going on normally. Besides, for doing business with Russia, our exporters don’t always need to have contact with Russia,” Serajul Islam, executive director and spokesperson of the Bangladesh Bank, told Arab News in a recent interview, adding that most of the country’s readymade garment business transactions have been through Hong Kong for many years.
“Last year, we had around $600 million in garment exports with Russia. Of this, $450 million payments were settled through Singapore, and the rest of the amount was paid through some other third countries.”
Arshad Jamal Khan, chairman of Tusuka Fashions Ltd., which supplies Melon Fashion Group — one of the biggest players in the Russian fashion market — is regularly receiving payments from his buyers in US dollars and through Swift.
“Most of our payments are being done through the Hong Kong Shanghai Banking Corp.,” Khan said. “In 2022, we are expecting to exceed the exports of the last year. And hopefully, it will be more than $4 million since work orders worth $2.87 million are already in the pipeline.”
Sourav Chowdhury, chief executive of the Bangladesh Knitwear Manufacturers and Exporters Association, told Arab News that exporters have been “mostly receiving export payments like before.”
“In the context of the ongoing Ukraine war, our exports to the Russian market are a little interrupted but not yet stalled,” he said. “Shipments that are being delivered through European ports are getting delayed or interrupted in some cases. But still, we have been able to send goods to Russia.”
Chowdhury was not certain, however, how long Bangladesh would be able to sustain its trade with Russia.
“In case of a prolonged war, our garment exports to Russia will be interrupted a lot. At the moment, we are looking at the decisions taken by the global financial regulators,” he added.
“It’s a fluid situation amid this war, and everything depends on the geopolitical situation.”