According to merchants, international sanctions against Russia have had no effect on Bangladeshi garment exports to Russia because the majority of their transactions are conducted through other nations.
Bangladesh’s textile industry is the country’s largest, employing over 4 million people and accounting for over 11 percent of the country’s GDP and 80 percent of its exports.
Bangladeshi manufacturers are increasingly turning to Russia, which imported clothing worth $600 million last year.
Following a slew of Western sanctions imposed in the aftermath of Moscow’s invasion of Ukraine in February, some Russian banks were barred from using the Swift system.
Bangladeshi exporters were originally concerned about the future of their trade, but their operations have so far been unaffected, as most transactions are not settled directly with Russia, according to the central bank.
“With the exception of the Russian banks that are subject to sanctions, transactions with other Russian banks are proceeding normally.” Furthermore, our exporters do not always require interaction with Russians in order to conduct business with them.” In a recent interview with Arab News, Serajul Islam, executive director and spokesperson of the Bangladesh Bank, said that most of the country’s readymade garment industry transactions had been conducted through Hong Kong for many years.
“We exported roughly $600 million worth of garments to Russia last year.” Payments totaling $450 million were sent through Singapore, with the remainder made through various third nations.”
Arshad Jamal Khan, chairman of Tusuka Fashions Ltd., which provides Melon Fashion Group, one of the largest players in the Russian fashion sector, receives payments in US dollars and through Swift on a monthly basis from his consumers.
“The Hong Kong Shanghai Banking Corp. handles the majority of our payments,” Khan explained. “We intend to outperform our shipments from the previous year in 2022.” Work orders for $2.87 million are already in the queue, so hopefully it will be more than $4 million.”
Exporters have been “mainly receiving export payments like before,” according to Sourav Chowdhury, chief executive of the Bangladesh Knitwear Manufacturers and Exporters Association.
“Our exports to the Russian market have been slightly disrupted but are not yet blocked,” he said, referring to the continuing Ukraine conflict. “In certain situations, shipments being delivered through European ports are being delayed or disrupted. Nonetheless, we were able to ship items to Russia.”
Chowdhury, on the other hand, was unsure how long Bangladesh would be able to maintain its trading relations with Russia.
“In the event of a protracted war, our clothing exports to Russia will be severely disrupted.” We’re currently examining the judgments made by global banking regulators,” he continued.
“In the midst of this fight, the situation is fluid, and everything is dependent on the geopolitical scenario.”