Gcsr Swati Mam.docx

AGLOBAL / COUNTRY STUDY REPORT

ON

BANGLADESH

OF

STEEPLED Analysis of Cotton Industry of Bangladesh for Business Opportunities for Gujarat / India

Gujarat Technological University IN PARTIAL FULFILMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

[Batch : 2014-16]

MBA SEMESTER III

Shri Jairambhai Patel Institute of Business Management

Gandhinagar

Submitted To : Prof. Swati Patel

Prepared By : Group - 4

Name of Students Enrolment Number

Jadhav Dhruv 147690592020

Jain Abhee 147690592021

Javiya Jay 147690592022

Delvadiya Jenish 147690592023

Joshi Bhagyashree 147690592024

Joshi Sharad 147690592025

Page 1

Student’s Declaration

Page 2

Institute Certificate

Page 3

Table of Content

Sr No. Title Page No.

I Student Declaration 7

II Institute Certificate 8

III Preface 9

IV Acknowledgement 10

V Plagiarism Report

VI Executive Summary 11

Chapter 1 Introduction of Bangladesh 13-18

1.1 Geography & Climate

1.2 Economy

1.3 Agriculture

1.4 Industries

1.5 Finance

1.6 Environmental

1.7 Investments

Chapter 2 Cotton Sector 19-28

2.1 Cotton Producers

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2.2 Inter coping

2.3 Activity of cotton Development Board

2.4 Cotton Consumption

2.5 Cotton Market

2.6 Cotton Seed Market

2.7 Gaining Industry

2.8 Problem Associated with cotton production in Bangladesh

2.9 Future Direction

Chapter 3 Introduction of Indian cotton industry 31-37

3.1 Major producer state of cotton in India

3.2 Characteristic of cotton produced

3.3 Cotton production in India compare to other countries

3.4 Price of cotton yarn of 2013-14 in India

3.5 Structure of India’s cotton textile industry

Chapter 4 STEEPLED Analysis of India 40-46

4.1 Social Factor

4.2 Technological Factor

4.3 Economical Factor

4.4 Political Factor

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4.5 Legal Factor

4.6 Environmental Factor

Chapter 5 STEEPLED Analysis of Bangladesh 50-59

5.1 Social Factor

5.2 Environmental Factor




5.6 Legal Factor

Chapter 6 STEEPLED Analysis of cotton textile industry

60-62

6.1 Social Factor




6.5 Legal Factor


Chapter 7 Five Forces analysis of Cotton Industry 63-67

7.1 Bargaining power of customer

7.2 Bargaining power of suppliers

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7.3 Threats of new entrant

7.4 Threats of substitute product

7.5 Competitive revelry

Chapter 8 Five Force analysis of Bangladesh cotton textile industry

68-72

8.1 Competitive revelry

8.2 Bargaining power of suppliers

8.3 Bargaining power of customer

8.4 Threats of new entrant

8.5 Threats of substitute product

Chapter 9 Export Policy of India 73-78

9.1 Export In India

9.2 Objectives of EXIM policy

9.3 Policy regulatory from work towards FDI

9.4 Policies of FDI

9.5 Import policy of Bangladesh

Chapter 10 Import of Bangladesh 79-83

10.1 Introduction

10.2 General Provisions

10.3 Import Registration Certification

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10.4 Steps involved in Import Procedures

10.5 Import Procedure

PREFACE

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As we are very much interested in business, we chose the course of Business Administration. MBA programme is related with administration and management. It is a professional course rather than vocational and the profession requires the situational how it exist in practical.

The Master of Business Administration Programme is well structured is well structured two years post-graduation Programme organised by GTU (Gujarat Technological University) -Ahmedabad

The GTU prescribes “Global Country Study Report (GCSR)” by M.B.A. students and then presents a report to them.

The main objectives of GCR at M.B.A. level is to make students aware about Globalisation, international business as well as application of management concept is practical world. And also to develop skill and knowledge is the student of supplement to the theoretical study of the business management in general management in general. Only book knowledge and class-room discussion is not enough for management students. The M.B.A Programme provides students with a fundamental function and actives as well as an exposure to strategic thinking and management

ACKNOWLEDGEMENT

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The global country report being a team effort. A lot of people have contributed in successfully completing it. We take this opportunity here to extend our gratitude towards each one of them.

We would begin by thanking to “GUJARAT TECHNICAL UNIVERSITY” and our director. Dr. S.O.JUNARE for giving us this platform to enhance our skill and also to all the project guides for their seamless support and cooperation, we would also like to thank our faculty member Prof. Swati Patel who gave us the right direction and guided us all through. At the same time they encouraged our efforts and motivated us .

Finally, we sincerely thanks to everyone who directly or indirectly helped us in this report.

EXECUTIVE SUMMARY

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We have done our global country study report on the topic “ A STEEPLED analysis of Cotton industry of Bangladesh for business opportunities for Gujarat / India” as a part of our third semester. Our objective behind this study was to analyse various factors affecting cotton industry in India and Bangladesh. And also finding various business opportunity between India, Bangladesh.

The cotton sector was primarily part of the process of import substitution industrialization to replace imports. After the liberation, Bangladesh adopted export oriented industrialization by focusing on the cotton industry.

In our project we further with the overview to the country as well as cotton industry of the country. We have done the steeple analysis of India through we got the idea about the business scenario of the India. What kind of social culture in India! we got known that India is mixed culture country. In India there different region people are stay.

There was also export of Indian silk, muslin cloth of Bengal, Bihar and Orissa to other countries by the East Indian Company. The textile industry in India traditionally, after agriculture is the only industry that has generated huge employment for both skilled and unskilled labor in textiles.

The strength of our industry is qualitative raw cotton. In India and Bangladesh the low cost of labor, so the overall cost of product will reduce. For our topic the different opportunities are the, favorable demographics in the domestic market; increasing young population coupled with rising income level than emergence of retail industry as a whole and development of various malls provide huge opportunities for the apparel segments. So the wide range of opportunity through we can find business opportunities.

We have also got known that such major player in India and Bangladesh. Than major exporter from India and Bangladesh. We found them through we can get known that how we can get the row material. For the start the business we get information about how that will help in tread. We also found the visa process to go foreign country. That what documents will required for that, fees for its application.

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We found different opportunities to do business and also find different possibilities to where to invest and where to do partnership.

And feasibility to do business, financial and marketing plan will be done in next semester.

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Introduction

Of Bangladesh

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Bangladesh have a glorious history in textile production. The finest cotton fabric- Moslin once produced in medieval Bengal was famous through out the world. However, the production and trading of Moslin gradually declined during the British rule ultimately resulting to closure of the industry by early nineteenth century. During Pakistan era, there had been limited effort to introduce cotton in this part (East Pakistan) with little support for research and development of the crop and as a consequence cotton remained confined to laboratory until early seventies. Importance of producing cotton domestically strongly soon after the liberation of the country in 1971 when the supply of raw cotton was suspended from Pakistan. Cotton is one of the important cash crops in Bangladesh. It is the main raw materials of textile industry. Annual requirement of raw cotton for textile industry of Bangladesh is estimated around 2.5 million bales. Local production is only about 0.1 million bales. Around 4-5% of the national requirement is fulfilled through the local production, remaining 95-96% is fulfilled by importing raw cotton from USA (40%), CIS (35%), Australia, Pakistan, South Africa.

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1.1 Geography and Climate

Latitude:Bangladesh is a South Asian country lying between 20o 34' and

26o 38' North latitude and between 88o 01' and 92o 41' East Longitude.

Climatic variations:The climate of Bangladesh is tropical monsoon

marked by sweltering temperature and high humidity. Bangladesh has mainly four seasons. Summer (March-May), Monsoon (June-September), Autumn (October-November) and Winter (December-February).

Rainfall:Total rainfall occurs during monsoon ranges from 1194 mm to 3445

mm. Average annual temperature is 26o c and while rainfall is 2540 mm.

Humidity:Highest 99% (July), lowest 36% (December & January).

1.2 EconomyBangladesh has an agrarian economy, although the shear of Agriculture has been decreasing over the last five years. Yet it dominates the economy accommodating major labour force living in the rural areas. From the marketing point of view, Bangladesh has been following a mixed economy that operates on free market principles.

Some macro economic indicators of Bangladesh in the fiscal year 2006 as follows

Total GDP (in constant price): 42.44 billion US$

Total GNI (in constant price): 66.03 billion US$

GDP growth rate: 6.63 %.

Sectora Share of GDP (%):

Agriculture: 19.61

Industry: 27.91

Service: 52.48

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Growth rate in Agriculture: 2.95%

Per capita income: 476 US$.

Total consumption: 49.43 billion US$

Private: 45.99 billion US$

Public: 3.44 billion US$

Total Investment: 15.28 billion US$

Private: 11.55 billion US$

Public: 3.71 billion US$

Total National Savings: 17.14 billion US$

1.3 Agriculture

Agriculture is the driven force of our national economy, 48.1% of the total population are directly involve with the agriculture. Agriculture sector comprises crops & horticulture, Animal farming/livestock, Forest & related service and fishing/fisheries. All of them crop sector alone contribute 11.72% to the GDP of the country. There are many public & private sector organizations are involved in Agricultural development in the country. Rice is the main staple food of Bangladesh and its production is about 26530 thousand metric tones. Other major crops are wheat, Maize, Potato and Jute. Some basic information on agriculture of Bangladesh is as follows.

1. Total cropped area : 14.11 million hectare

4. Cultivated area : 7.98 million hectare

3. Forest area : 2.60 million hectare

5. Cultivable waste : 0.27 million hectare

6. Current fellow : 0.47 million hectare

7. Cropping intensity : 180%

8. Single cropped area : 2.87 million hectare

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9. Double cropped area : 4.13 million hectare

10. Triple cropped area : 1.03 million hectare

11. Growth rate of Agriculture sector : 2.95%

12. Total annual food production : 26.13 million metric tons

13. Total requirement of food crops : 23.85 million metric tons

14. Annual egg production : 4,780 million

15. Annual fish production : 1.99 million metric tons

1.4 Industry

In the total population 35.8 % are involve in the industrial sector in the country. Textile & Readymade Garments alone employed about 5.2 % of the total population. The major Industrial products are Cotton textile, Jute textile, Garments, Paper, Fertilizer, Irons & Steel, Cement, Petroleum products, Cigarettes, Matches, Drugs, Pharmaceuticals, Tea, Salt, Edible Oil etc.

Some basic fact of Industrial sectors of Bangladesh is as follows.

Share of Industrial sector in GDP(%): 27.91

Contribution of Garments industries in GDP: 27%

RMG contributes 7.5% of total export

Production of Cotton textile: 17530

Yarn: 13838 metric ton

Cloth: 3692 thousand meter

Production of Jute textile: 22313

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1.5 Finance

National finance is comprises with tax revenue and non-tax revenue.

Total revenue: 66.89 million US$

Tax revenue: 53.93 US$

Non-tax revenue: 12.96 US$

1.6 Environment

Water and Air pollution are two major concern of Bangladesh environment at the present moment. A World Bank report of 2000 states that the diesel vehicles are accountable for 44% particulate matter and 85% particulate nitrogen oxide pollution of Air in Dhaka city.

1.7 Investment

medium Bangladesh consist low waged and available labour force and manpower resources. There are huge scope to invest in the sector of cotton & Jute Textile, Readymade garments, Frozen Foods, Processed Foods, Agrobased industries and Small & Cottage Industries.

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Cotton Industry

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2.1 Cotton Production

In Bangladesh, cotton is generally grown as a rain fed crop. Two types of cotton are grown in Bangladesh namely- i) Upland cotton (Gossypium hirsutum) & ii) Hill cotton (Gossypium arboreum). American cotton is cultivated in the South western region, Northern region and Central region covering more than 32 districts out of 61 plain districts of Bangladesh. The course type Hill cotton, on the other hand is grown in three hill districts. Hill cotton is an indigenous variety and cultivated in Jhum system. Jhum is a mixed crop cultivated mainly in hill slopes where more than two crops are seeded in a pit and harvested sequentially. The crops mainly cultivated in Jhum are Aus rice, Sesame, cotton, Maize, Marpha, Chili, Pumpkin etc. Hill cotton is used for handloom cloths as well as grown for export. With a total land area suitable for cotton cultivation estimated 2.42 lakh hectares cotton production is taking place in 35 districts out of 64 districts in Bangladesh. After functioning of CDB the crop year 1997-98 saw the area devoted to cotton production peaked at a total of 54,429 hectares, or a utilization rate of 22.5% as a result of gradual expansion of coverage over the past 25 years. During the following crop year 2012-13, however, cotton areas shrank by 17.6% (11,789 ha) to 42,640 ha due to floods, low price, degeneration of yield capacity of existing varieties and lack of modern technologies. In crop year 2001-02 nevertheless, cotton areas reportedly started to increase again. American cotton hectarage, for instance, rose from 29,120 ha to 37,950 ha or an increase of 8,830 ha and ultimately reached at 41975 ha in the crop year 2014-15, an overall increase of 4,025 ha. One of the reasons for the limited increase in hectarage is the shift of farmers from cotton production to other crops. This is because of the declining economic prospect in cotton compared to the profits derived from growing vegetables, spices, tobacco, flowers, banana and other crops.

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2.2 Intercropping

To make the cotton cultivation profitable and to provide additional income to the farmers, the introduction of inter and relay cropping with well experienced management practices have open up a new hope of better competitiveness of cotton crop in cotton cultivation. So, much emphasis and stress have been given to inter and relay cropping of cotton for getting more total income from the same piece of land. This system of cotton cultivation has already gained popularity due to the rational and tireless efforts of CDB extension staff. Among the inter crops Amaranths sp. (Red amaranth, amaranth), radish (as leafy vegetables), onion, mungbean, chili, turmeric, ginger etc. have been successfully cultivated as inter and relay crops with cotton. Farmers are getting about 25%more net profit by growing different leafy vegetables and about 50% by growing turmeric/ginger with cotton. Sowing of wheat between cotton rows in November also revealed encouraging results. Inter cropping of ground nut with cotton was also reported to give more total income over the sole cotton.

2.3 Activities of The Cotton Development Board (CDB)

Cotton Development Board was established through a resolution in 1972, to boost up cotton production in the country under the Ministry of Agriculture, Government of the People's Republic of Bangladesh. The mandate of the Board was to introduce and promote cotton cultivation in Bangladesh. But practically the work started in 1977 with the introduction of a new American variety (Deltapine-16) from USA.

At present all activities of cotton are being conducted by CDB such as

The activities of the CDB have four main focuses.

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These are the following.

i) Research on cotton

ii) Extension Service including technology transfer, training & demonstra tion

iii) Seed Production & distribution and

iv) Marketing and other institutional support.

1) Research.

CDB has 03 Research Training and Seed multiplication farms and one germplasm preservation and evaluation centre for upland cotton. In addition a separate research station and other 3 substations located at three hill districts for research on hill cotton. CDB is conducting research on 5 disciplines viz., plant breeding,, agronomy, soil science, entomology and plant pathology although CDB’s research is not up to the mark due to short of qualified and adequate number of scientists.

2) Extension.

CDB has four regional Offices each having two to four zones to a total of 13 zones in the country and each zone is further divided into10-18 units depending upon the intensity of cotton cultivation. Each unit is headed by a Cotton Unit Officer (CUO). In a number of units, the CUO is assisted by 1-2 Store cum field man (SCFM) and Assistant Cotton Unit Officer (ACUO). Based on the previous years target and achievement, and after consultation with local growers, the Cotton Unit Officers (COU) and Store Cum Field (SCFM) man fix the annual target for cotton acreage for their respective unit and channel this information via the cotton Development Officer (CDO) and Chief cotton development officer (CCDO) to the Deputy Director (DD) at regional office. The DD fixes up the final target for the specific units and forwards it to the Executive

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Director (ED) at the headquarter for the approval. CDB strives to achieve the annual target by under tacking several extension related activities that include the following:

3) Training.

CDB arranges training for contact farmers at three of its Research, Training and Seed Multiplication Farms. Training for contract farmers is organized twice every crop season. There are fully residential training and duration is 5-7 days. CDB also conducted one day training for the general farmers at the farmer’s field for 6 hours. CDB also organizes field days as motivational programme. Training for extension staff and Officers are also designed to communicate information about new technology on cotton production.

4) Seed production and distribution.

One of the important extension activities of the CDB is the production and distribution of cotton seed. CDB ensures supply of 350 tons of certified seed annually to the farmers, fulfilling 60-70% of the national seed requirement. CDB produces breeder seed and foundation seed in 03 seed multiplication farms and certified level of seeds are produced also through contract farmers in selected seed blocks. CDB provides 50% inputs free of cost to the contract farmers for producing seed in the seed block.

5) Credit.

CDB provides credit from its own fund to small and marginal farmers through inputs like seed, fertilizers and pesticides. Every farmer provides quality seed, fertilizers and pesticides. Credit money is recovered at the time of seed cotton procurement. There is a Memorandum of understanding (MOU) between CDB and BKB , RAKAB to provide credit to cotton farmers. Accordingly, Bangladesh Agriculture Bank (BKB) and Rajshahi Krishi Unnayan Bank(RAKAB) provide credit to the cotton farmers.

6) Other activities.

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Field level extension personnel of CDB are fully responsible for dissemination of technical information related to cotton production in the country. Core extension activities at the field level includes regular field visit by the grass-root level CDB staff, interaction with cotton farmers individually and in groups, establishment of demonstration plots, conducting farmer group meetings, field days etc. for the exposure to the farmers.

2.4 Cotton consumption

Medium staple cotton (Upland cotton) is primarily used by the textile Industry, which has an estimated annual installed capacity of about 2.5 million bales. But local production mitigates 4-5% of total requirements. On the other hand 50% of comilla cotton and a part of medium staple cotton are utilized by the cottage industry and individual farm family and rest 50% of the short staple cotton exported in England, Japan and other countries, cotton seeds are also used to extract edible oil in the oil industry. However, the use of cotton plant and its products include among other as fuel, as seed and fiber, as cotton seed cake, cotton seed oil, as yarn for textile, as rug and mattress etc.

2.5 Cotton Market

Cotton Development Board (CDB) and private ginners are the buyers of seed cotton produced in the country. CDB purchases seed cotton from the contact farmers for seed purpose. CDB also purchases seed cotton from general farmers in order to assist farmers in marketing of seed cotton and also to ensure reasonable price for the cotton farmers. Prices of seed cotton and lint are fixed by the government through a committee. The price of the seed cotton is fixed on the basis of current international market price of seed cotton.

2.5.1 Marketing and processing of cotton in the private sector.

Cotton is a cash crop and involved in international trade. Therefore, its marketing system is relatively rather complex. The marketing and processing of cotton starts from the farm gate after harvest of cotton and goes through a process at various steps, which have been depicted.(Annex III). Involvement of different parties is shown in the cotton - marketing channel.

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2.5.2 The place of cotton in foreign trade.

Maximum portion of raw cotton requirement are met from the imported cotton. Local production can meet only 4%~5% of the requirement. Remaining 95-96% are imported from different countries including USA, Uzbekistan, Australia, Pakistan, India, Sudan, Uganda, Turkmenistan, Kazakhstan, Turkey, Egypt, China, Nigeria, South Africa, Cameroon etc.

2.6 Cotton seed industry

Private ginneries produce cotton crude oil. Some of them are used in soap industries and rest of the crude oil is refined by refine industry for edible purpose. The speller machine used by the ginneries for oil extraction, which can extract 10 to 12% crude oil from cotton seeds. Cotton oil refinery industry can produce 78 to 80 kg refined oil from 100kg crude oil. The oil cake is generally used for livestock feeding. Cotton oil cake has high demand in the market for multiple uses. Rural based ginning facilities and cotton oil processing plants is promoting rural industries and creates employment opportunity. This will have very significant social and economic impact both at the farmer level, regional level as well as macro level.

2.7 Ginning industry and capacit

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CDB has nine ginning centers located at different farms and cotton growing areas. The ginning centers have a total of ten Lumus 40×12 inch saw- gins with a capacity of about 3 tons seed cotton per 8- hour shift each. Besides, these there are four local made ginning machines. CDB does provide ginning facilities to the cotton growers, there are large number of private ginners in the nearby locations of the cotton growing areas, who provide ginning facilities to the cotton growers. There are more than 50 private ginners in the country and they play important role for cotton production and marketing. They purchase seed cotton from the farmers through competition. They sell lint to the spinning mills after ginning from their own ginning centers.

2.7.1 Fiber Industry

Total Spinning Mills: 237 Nos

Total Spindles: 4858473 Nos

Total Rotors: 100890 Nos

Annual production of yarn: 500 million kg

2.7.2 Textile and Confection Industry

Total Oven Mills: 1343 Nos

Annual production of Oven fabrics: 1000 million meters

Total Knit & Knit dying Mills : 446 Nos

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Annual production of Knit fabrics: 1400 million meters

Total Ready made Garments Unit: 3800 Nos

Annual production of Ready made Garments: 215 million dozens

Total Hand Looms: 148350 Nos

Annual production of Hand Looms: 92 million meters

2.8 Problems Associated with Cotton Production in Bangladesh

The following are the major problems associated with cotton production in Bangladesh.

2.8.1 Underdeveloped research activities

Research section is considered the key of development. This section did not improved due to lack of trained manpower, laboratory facilities, adequate fund, collaborative project with foreign countries etc.

2.8.2 Low yield

Modern production technologies were not developed. Varieties are low yielding.

2.8. 3 Long duration crop

Long duration crop needs 6-7 month for production. Commercial five varieties are grown in Bangladesh namely, CB-1, CB-3, CB-5, CB-9, and CB-10. Out of five varieties, only CB-5 and CB-9 are hairy varieties which are slightly tolerant

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to sucking pests and all the varieties are long duration and they need at least six months. Some of the private companies have been imported hybrid seeds for trial to see the yield performance but these are not performing better than open pollinated varieties developed by CDB in addition it needs high inputs for cultivation.

2.8.4 High input cost

High input cost, particularly fertilizer and pesticides. This is because of the heavy reliance on pesticides for cotton pest management.

2.8.5 Competition from other crops

At present cotton is highly competitive with other crops and in many cotton growing areas farmers find it more profitable to grow other crops such as rice, maize, vegetables, banana, flowers, tobacco etc. than cotton. That’s why farmers are migrating to other crops.

2.8.6 Insect pests and Diseases of cotton

Similar to many countries, cotton in Bangladesh is major polluter crop due to the heavy and indiscriminate pesticide use, especially insecticides for Aphids, Jassids and cotton bollworms. The number of insecticide sprays exceeds 15-20 per season bringing the cost of insecticides to more than 40% of total input costs and triggering pest resurgence and secondary out breaks. Important insect pests of American cotton in Bangladesh include the chewing insect namely American bollworm, spotted bollworm and pink bollworms and the sucking insects namely the Jassids, aphids and whitefly. Sometime Spodoptera is also become a serious pest in some areas of Bangladesh. The insect pest complex on Hill cotton is similar to American cotton.

2.8.7 Weed problem

During cotton cultivation, in Bangladesh high rainfall and high temperature prevail that enhance huge growth of upland weeds leads to increase cost of production.

2.8.8 Low market price for cotton

In Bangladesh, the price fixed by CDB for its procurement of seed cotton from its contact farmers also influences the general market price. The CDB rate itself is fixed by a committee.International market price is the main factor that is

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considered by fixing the cotton price in Bangladesh. So, cotton price is the important factor in determining future cotton production in Bangladesh.

2.9 Future Direction

2.9.1 Cotton based multiple cropping patterns

The land resource is very much limited in the country. Cropping intensity of Bangladesh is very high (about 180%). Farmers expect to have maximum total return from their land in a given time period. Many farmers show reluctance in cotton cultivation for its long maturation period of about 6 months. As such, a short duration variety of around 4.5 months combined with moderate yield is very much needed to satisfy the long felt demand of farmers. This type of variety may be accommodated very effectively in the cropping patterns of northern districts particularly where winter comes earlier than the other parts of country. More emphasis will be given on intercropping, relay cropping and cotton based sequential cropping.

9.2.2 Insect/Pest Issue

Sucking pest infestation at an early stage of crop growth is quite hazardous and very often escapes the notice of farmers causing heavy damages to the non-hairy cotton varieties under cultivation in the country. Cultivation hairy variety is most effective measure in controlling the infestation. Work on this dimension of research is going on since 1985. A highly tolerant variety to sucking to sucking pest attack associated with higher yield is yet to be found out. The newly evolved variety CB-9 is moderately tolerant Jassid. Research in this line would be strengthening to find out a Jassid tolerant cotton variety with high yield potential. Bollworm especially American bollworm is another virulent insect causes most of the damages to cotton crop. Hand picking of larvae followed by use of insecticides at economic injury level under the IPM concept is found to be very effective and economical in controlling the attack of this insect. However, farmers are not to be attentive in adopting this method. The farmers spraying insecticides, which is not very effective neither the practice is

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economic. The farmers needed training in this area as well as well as they are to be motivated for effective control of bollworm.

2.9.3 Variety Development

An exclusive attempt on exploitation of genetic resources in cotton is very much needed for developing a variety with wide desired variability. CDB has more than 400 germplasms in their gene bank. But due to short of adequate qualified personnel and other required other required facilities, this highly technical aspect of research has not taken up yet. CDB likes to be adequately strengthened with the required facilities to upgrade its capability to embark upon the vital research program for full exploitation of the potential genetic resources already available at our gene bank. Research on genetic resources will be initiated to utilize the broad genetic diversification of the crop especially development of hybrid and transgenic cotton (Bt) which is resistant for specific insect with high yielding capacity. Cotton varieties capable of tolerance to excess moisture and water logged condition of soil will also be considered in due attention

2.9.4 Low cost management

Reduced cost is the basic way of profit. Cost may be reduced through reduced tillage, foliar application of nutrients, use of selective herbicides , IPM practice etc are being introduced.

2.9.5 Education and training

Provision of higher education and training in all level of manpower in CDB to be qualified for research and extension have been planned. Cotton farmers will also o be trained.

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INTRODUCTION

OF

INDIAN

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COTTON INDUSTRY

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3.1 MAJOR PRODUCER STATES IN INDIA OF COTTON

3.2 Characteristics of Cotton Produced India is unique among major cotton-producing countries because a broad range of agro-climatic and soil conditions permit cultivation of all varieties and staple

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lengths of cotton. Indian and international standards use different staple length definitions for classifying cotton. By Indian standards, about one-half of Indian cotton is medium staple length, but, by international standards, only about one-quarter of Indian cotton is considered medium staple. The North zone tends to produce mostly short and medium staple varieties, the South zone mostly long and extra-long staples.

The Central zone a range of medium and long staple .

India has the capacity to produce the full range of staple lengths of cotton needed to meet the needs of its textile industry. And India’s hand- picked cotton is considered superior to mechanically harvested cotton in terms of sheen of finished fabric, amenability to spinning, tensile strength, etc. India, however, has significant problems in meeting other quality needs. In particular, Indian cotton is generally contaminated with other fibers and foreign matter and often consists of admixtures of multiple varieties with different fiber characteristics. These problems reduce efficiency (yarn realization) in the spinning process and result in higher levels of yarn impurities and imperfections. A 2001 survey by

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the International Textile Manufacturer’s Federation indicated that 5 of the world’s 10 most contaminated traded cotton types came from India.

Problems with contamination and other quality attributes of Indian cotton have been a key factor behind the upward trend in cotton imports by India’s export-oriented textile mills since the late 1990s. The risk associated with the unreliable quality of domestic cotton leads some textile producers to prefer imported cotton to meet export orders that demand consistent quality.

The significant problems with admixture of varieties and contamination stem from practices on farms and in market yards that are not amenable to quick solution. Improvements in quality require better onfarm seed management; improved technology of handling, transportation, and ginning; investments in market infrastructure; and a marketing system that provides price premiums that reflect the costs of supplying quality cotton. Accomplishing these changes will likely require implementation of grades and standards for domestic cotton and improvements in marketing that provide adequate incentives to producers, ginners, and traders to adopt quality- related practices.

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3.3 Cotton Production of India as Compare to other Countries:

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3.4 Price of Cotton Yarn of 2013-14 Year in India:

3.5 Structure of India’s Cotton Textile Industry Unlike other major textile-producing countries, India’s textile industry is comprised mostly of small-scale, nonintegrated spinning, weaving, finishing, and apparel-making enterprises. This unique industry structure is primarily a

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legacy of government policies that have promoted labor- intensive, small-scale operations and discriminated against larger scale firms:

• Cotton farming and harvesting. Cotton is grown in tropical as well as sub tropical area in India. Mostly the cotton grown in India is from dry lands and crops mostly depend on the irrigation systems available and not only on the rain water.

• Ginning: Ginning is the process where cotton fiber is separated from the cotton seed. The first step in the ginning process is when the cotton is vacuumed into tubes that carry it to a dryer to reduce moisture and improve the fiber quality. Then it runs through cleaning equipment to remove leaf trash, sticks and other foreign matter. Ginning is accomplished by one of two methods. Cotton varieties with shorter staple or fiber length are ginned with saw gins. This process involves the use of circular saws that grip the fibers and pull them through narrow slots. The seeds are too large to pass through these openings, resulting in the fibers being pulled away from the seed. Long fiber cottons must be ginned in a roller gin because saw gins can damage their delicate fibers.

• Oil mill: in the operation the oil is extracted from the cotton seeds that are coming form the ginning process. The cotton seeds coming from the ginning unit are then passed through the pressing unit and crude cotton oil is produced. The pressed cotton seed oil cake is supplied as the cattle feed. The crude is further modified as the bio-diesel which could be used as the one of the energy source. The refined cotton oil is also used as the edible oil but it is proved to be unfit for the human health.

• Spinning. Spinning is the process of converting cotton or manmade fiber into yarn to be used for weaving and knitting. Largely due to deregulation beginning in the mid-1980s, spinning is the most consolidated and technically efficient sector in India’s textile industry. Average plant size remains small, however, and technology outdated, relative to other major producers. In 2002/03, India’s spinning sector consisted of about 1,146 small-scale independent firms and 1,599 larger scale independent units.

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• Weaving and Knitting. Weaving and knitting converts cotton, manmade, or blended yarns into woven or knitted fabrics. India’s weaving and knitting sector remains highly fragmented, small- scale, and labor-intensive. This sector consists of about 3.9 million handlooms, 380,000 “powerloom” enterprises that operate about 1.7 million looms, and just 137,000 looms in the various composite mills. “Powerlooms” are small firms, with an average loom capacity of four to five owned by independent entrepreneurs or weavers. Modern shuttleless looms account for less than 1 percent of loom capacity.

Page 39

• Fabric Finishing.Fabric finishing (also referred to as processing), which includes dyeing, printing, and other cloth preparation prior to the manufacture of clothing, is also dominated by a large number of independent, smallscale enterprises. Overall, about 2,300 processors are operating in India, including about 2,100 independent units and 200 units that are integrated with spinning, weaving, or knitting units.

• Clothing.Apparel is produced by about 77,000 small-scale units classified as domestic manufacturers, manufacturer exporters, and fabricators (subcontractors).

• Composite Mills.Relatively large-scale mills that integrate spinning, weaving and, sometimes, fabric finishing are common in other major textile-producing countries. In India, however, these types of mills now account for about only 3 percent of output in the textile sector. About 276 composite mills are now operating in India, most owned by the public sector and many deemed financially “sick.”

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STEEPLED

ANALYSIS

OF

INDIA

Page 41

4.1 SOCIAL FACTORS :

Managers and policy makers cannot disregard social variables like education ,knowledge ,rural community norms and beliefs which are predominant in india ,especially in the rural society while cultural differences are unthinkable for any international manager or even an urban Indian manager.

SOCIOCULTURAL SECTOR

Society and culture is an important factor that must be given emphasis by any business, specifically those who are operating in the global arena. It is important that the company must operate in compliance with the social system in order to gain good reputation and effective public image. On the other hand, cultural aspect is equally essential, in order to understand the various needs of different individuals that belongs to different cultures.

- Population growth rate

- Age distribution

- Career attitudes

- Consumer behavior

- Religion and culture itself

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4.2 TECHNOLOGICAL FACTORS

Technology is considered to be one of the most important factors of textile industry. That is why the government, in its industrial policy resolution, industrial licensing policies, MRTP and FERA regulation, and in liberalization policies, assigned great importance to sophisticated technology and technology transfer.

The working group on textile & jute industry for the 11th five year plan (2007-2012) has studied the major problems being faced by the textile industry which include:

1 structural weakness in weaving and processing,2 fragmented and technologically backward textile processing sector,3 fragmented garment industry, 4 inadequate capacity of the domestic textile machinery manufacturing sector,5 inadequate training facilities in textile sector,

At present, the textile industry is undergoing a substantial re-orientation towards other then clothing segments of textile sector, which is commonly called as technical textile. It is moving vertically with an average growing rate of nearly two times of textile for clothing applications and now account for more than half of the total textile outlet. The process in making technical textile require costly machinery and skilled workers.

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4.3 ECONOMICAL FACTORS

Economical factors such as per capita income, national income, resources mobilization, exploitation of natural resources, infrastructure development, capital formation, employment generation, and industrial development influence textile industry.

Textile industry provides one of the most fundamental necessities of the people with huge value-addition at every stage of processing.

Today textile sector account for nearly 14% of the total industries output. Indian fabric is in demand with its ethnic, earthly colored and many textures. The textile sector accounts about 30% in the total export. This conveys that it holds potential if one is ready to innovate. It generates massive potential for employment in the sectors from agricultural to industrial. Employment opportunities are created when cotton is cultivated.

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4.4 POLITICAL FACTORS :

The management of business enterprises and their policies are considerably influenced by the existing political system and an India is a democratic country,

there are probably problem of stability in politics.

Political and government diversity:-The reservation of production for very small companies that was imposed with an intention to help out small scale companies across the country, led substantial fragmentation that distorted the competitiveness of industry. However, most of the sector now have been de-reserved, and major entrepreneurs and corporate are putting-in huge amount of money in establishing big facilities or in expansion of their existing plants.

Secondly, the foreign investment was kept out of textile and apparel production. Now, the government has gradually eliminated this restriction, by bringing down import duties on capital equipment, offering foreign investors to set up manufacturing facilities in India. In recent years, India has provided a global manufacturing platform to other multi-national companies that manufacturing other than products; it can provide a base for textile industry.

And some motivating step taken by the government, other problems still sustains like various taxes and excise imbalances due to diversification into states and union territories. However, an outline of VAT is being implements in place of all other tax diversification, which will clear these imbalances once it is imposed fully.

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4.5 LEGAL FACTORS :

Legal environment plays very vital role in textile industry. Laws relating to industrial licensing factory administration, industrial disputes, monopoly control, and foreign exchange regulation are examples of legal business environments in India.

And other factors are lack of trade membership, which restrict to tap other potential market. And also lacking to generate economies of scale is another legal factor to this industry. A government has charged higher indirect taxes, power and interest rates. The uneven supply base also leads barriers in attaining integration between the links in supply chain. This issue creates uncontrollable, unreliable and inconsistent performance. The liberalization being carried in the 1990’s also ushered in a new era for India’s textile industry. It led to the relaxation of many of the constraints previously imposed on the textile sector. Licensing was removed in the early 90’s by the statements of industrial policy and the textile development and regulation order. In 1995, India signed the agreement of traffic and trade bringing some of its policies at with those at an international level.

At present, the single biggest factor influencing the textile industry appear to be the end of the textile quota regime of quantitative import restrictions under the multi-fiber arrangement (MFA) on 1st January 2005

Under The World trade organization (WTO) agreement on textile and clothing. The removal of quotas, seen as an opportunity by many, including the government, is driving investment and liberalization in the textile space.

India can also grab opportunities in the export market. The industry has the potential of attaining $34bn export earnings by the year 2010, the regulatory polices is helping out to enhance infrastructures of apparel parks, specialized textile parks, EPZs and EOUs.

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4.6 ENVIRONMENTAL FACTORS :

Environment protection and preservation is responsibility of the textile industry. The government of India is committed to the preservation of ecological balance.

Environment factor, growing awareness of the potential impact of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

The relatively rapid gains in productivity in the predominately rainfed Central zone since 1990 are due to technological advances that, if combined with a continuation of recent modest growth in the North and South zones, could lead to a substantial hike in national average yields and production.

While this productivity gap indicates that significant further onfarm yield improvements are possible, a range of technical, economic, and institutional factors prevent realization of the potential of the varieties cultivated

Following are the few factors which contributes towards the low yield

• Delayed Sowing.Late sowing of cotton reduces yields by providing less optimal sunlight conditions for crop development and, in some areas, by allowing less time for picking the mature crop before clearing the field for the following crop. Sowing delays are caused either by the late arrival of seasonal rainfall needed for sowing or by delays in harvesting the preceding crop. Yield losses associated with late sowing and shortened harvest times may be reduced by new shorter duration varieties and better management, but crop competition will likely continue to limit yields in some areas.

• Monsoon Dependence.Erratic monsoon rainfall affects 60-70 percent of cotton area, reducing yields through moisture stress and creating risk that reduces investment in seed, fertilizer, and pesticide inputs. Even with improved varieties and management, average yields in the mostly rainfed Central and South zones are likely to remain below those achieved in other countries with more reliable rainfall.

• Poor Seed Quality. Poor seed quality is a pervasive problem in cotton cultivation. Only about 35 percent of cotton area is sown with certified seed with assured varietal purity and germination. Commercially available seeds

Page 47

are often of poor quality, with sale of uncertified, substandard, and second generation (F2) hybrid seeds not uncommon. Although supplies of certified seed are generally available, financial constraints lead most farmers to use retained seeds or lower priced uncertified seeds from the market.

The proliferation of cotton varieties in markets and farmers’ fields confounds efforts to improve seed quality, maintain varietal purity, and improve crop management practices. Roughly 100-130 cotton varieties developed in both the public and private sectors are now cultivated in India. A study by the Central Institute for Cotton Research (CICR) indicates that the average cotton farmer

11

in the Central and South zones plants 3-4 varieties on farms averaging about 2 hectares, a practice that greatly complicates crop and seed management.

• Plant Protection.Insect and disease infestations, including bollworms, white fly, jassids, and leaf curl virus, are significant problems in India’s three cotton production zones. Although per hectare use of pesticides is higher for cotton than for any other crop, effective plant protection is constrained by poor farm management, pesticide subsidies that encourage indiscriminant use, and problems with pesticide quality. Improved onfarm pest management practices, including appropriate crop rotations, pest surveillance, pesticide applications, and adoption of Integrated Pest Management (IPM) practices have proved difficult to implement on small, resource- constrained farms.

• Crop Management.Large gaps between average on farm yields and the potential of existing varieties also stem from poor management practices, including use of inappropriate varieties, seed rates, seed spacing, and fertilizer dosages. As in the case of plant protection, improvement of crop management practices is complicated by the need to extend recommended practices to large numbers of small, limited-resource farmers.

• Lack of Suitable Varieties.Cotton yields are affected by lack of varieties— or genotypes— suitable for some agronomic conditions. Indian scientists cite three priorities for plant breeding efforts: (1) higher yielding, short-duration, and pest-resistant cultivars for the irrigated North zone, (2) higher yielding varieties for the drought-prone Central zone, and (3) varieties suited for the soils on rice fallow common in the South zone.

Water Management issues

Page 48

Water resources need to be protected from unsustainable use and pollution – between 1970 and 1995, 25% of the world’s freshwater ecosystems were lost. Agriculture takes up about 69% of global freshwater withdrawal and rice, wheat and cotton together account for 58% of the worldwide irrigated area, making these three crops the major consumers of freshwater (WWF, 1999). Approximately 73% of cotton is produced in irrigated fields and only 27% under rain-fed conditions. Most irrigation systems in cotton production rely on the technique of flood irrigation – freshwater is drawn from its source and transported to the place of its consumption. Losses of freshwater can occur through evaporation, seepage and poor water management.

Water losses can be drastically cut through good water management practices which are integral to the farming approach taken in the Fairtrade cotton standard including input of organic matter, crop rotation, and appropriate irrigation methods (if needed). In areas of water shortage, appropriate measures should be taken to improve water storage and collection systems.

Bt cotton issue

Bt cotton is one of the variety of cotton which gives the lager yield and the less quantity of pesticides are needed because of its inbuilt pest resistance capacity. But the research was carried out and it was found that the cotton growers who are using the Bt cotton at their farm need to use more the amount of pesticides compared to the other normal cotton growers after third year of the Bt cotton and the yield of the cotton goes down compared to the normal cotton growers. So it has a major impact on the cotton growers and also the resistance of the insect increases with the frequent use of Bt cotton.

Water Pollution

Large quantity of water is used at various stages of the cotton textile from Cotton farming to cotton finishing. Water gets polluted due to excess use of pesticides in the cotton faming. During rainy season these excess pesticides gets mixed with the surface water as well as the ground water intern causing the bad effect on the human health as well as the aquatic life.

Soil Pollution

Soil in the cotton growing region and near by region is getting polluted because of the excessive use of the chemical pesticides resulting into the low yield. This can be avoided by using the organic pesticides for growing the cotton.

Page 49

Pollution due to Lint

The pollution due to lint in the cotton ginning industry is very hazardous to health. Most of the worker working at this place suffers form the lungs diseases because of the pollution problems.

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STEEPLED

ANALYSIS

OF

BANGLADESH

Page 51


Gender impact

Rural women in several smallholder contexts provide substantial labour input to most aspects of cotton production cycle, frequently as unpaid ‘family labour’ or low-paid day-labourers and commonly performing some of the most arduous tasks – with over-representation in manual work such as picking.

Women in many regions face significant difficulties in gaining access to input credit facilities, due principally to men’s ownership of land and other assets, and hence struggle to achieve economic independence through cotton farming. Decision-making within farming families in many regions is gender-biased and women are often neglected in decision-making process. Because of the above, and the increased labour requirements of more ecologically sound farming cultivation methods, the development of such methods may risk an increase in the labour burden on rural women workers.

Health and safety

Given the nature of cotton farming work, worker/farmer health and safety is a critical issue in cotton cultivation: the key risks are that workers – family or hired, depending on regional context – are exposed to harmful toxins, primarily because they are not provided with – or do not wear – adequate personnel protective equipment (PPE) while spraying chemical pesticides and herbicides.

Children are particularly vulnerable to arduous work on cotton farms; however, there are few reports of children working with toxic materials.

In the context of worker health and safety, special attention should be given to working conditions in ginneries – work characterised by seasonality, dust pollution, machine danger and long hours, albeit with differences between regions

Child labour

In several regions, children – including young children – contribute labour to cotton growing; depending on the age of the child and the nature of the activity – particularly whether it affect the child’s health and schooling – this may or may not be acceptable under international standards (ILO conventions provide

Page 52

for light work for over-12s and make exception for children’s work on family smallholdings where produce is for local consumption)

Children are primarily involved in cotton picking, and to a lesser degree in weeding and nutritional activities.

Key issues are children’s health and safety, and access to education (though the latter may depend on factors outside the control of parents, such as availability of local facilities).

Child labour is difficult to assess and monitor as it is (almost by definition) informal

Forced labour / labour coercion

Forced labor constitutes a violation of a fundamental international human right – freedom of employment – and there are few cultural relativities in the debate surrounding its continued use.

The underlying factors that contribute to forced labor and bonded labor include the use of labor intermediaries providing casual labor under conditions which compromise the workers’ rights, recruitment agencies with service fees which can be repaid only by continued work, social exclusion, often connected to caste or tribe, asymmetric information, whereby illiterate workers are not aware of their rights, labor migration – particularly ‘irregular’ migrant workers, who are commonly unaware but also unable to assert their legal labor rights, as non-registered workers, inequitable loan or credit schemes managed by the employer; in-kind remuneration, which allows employers to exacerbate dependent relations and hide low wages

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5.2 ENVIRONMENTAL FACTORS :

The state governments are authorized to grant environmental clearances to the stand alone grinding unit. For the purpose of environmental clearances, port based/inland bulk handling terminal should be treated at per with the stand alone grinding units and state governments should be authorized in this regard.

Those targets if achieve will transform the socioeconomic environments. Along with upper per capita income the governments vision 2021 presents a growth where citizens will have a top standard of living be better-educated, face better social justice, and have a more equitable socioeconomic environment and the sustainability of growth will be ensured through better protection from climate change and natural disaster.IDA commitments to Bangladesh have growth extraordinarily in the past five years, topping $1 billion for the first time in FY 2009. The world Banks presents collection in Bangladesh amount to $4.2 billion and includes 32 projects. The world Banks country support strategy for FY-11-14 is supporting the governments vision of quick poverty reduction through sustainable accelerate, and comprehensive growth, underpinned by stringer governance at central and local level. To ensure better outcome the world banks plan seeks to scale up incomplete operations with provable results, connect in strategic interventions with a transformative impact and innovate through small pilots with high country ownership.

Low Yields in Cotton

The relatively rapid gains in productivity in the predominately rainfed Central zone since 1990 are due to technological advances that, if combined with a continuation of recent modest growth in the North and South zones, could lead to a substantial hike in national average yields and production.

While this productivity gap indicates that significant further onfarm yield improvements are possible, a range of technical, economic, and institutional factors prevent realization of the potential of the varieties cultivated

Following are the few factors which contributes towards the low yield

Page 54

• Delayed Sowing. Late sowing of cotton reduces yields by providing less optimal sunlight conditions for crop development and, in some areas, by allowing less time for picking the mature crop before clearing the field for the following crop. Sowing delays are caused either by the late arrival of seasonal rainfall needed for sowing or by delays in harvesting the preceding crop. Yield losses associated with late sowing and shortened harvest times may be reduced by new shorter duration varieties and better management, but crop competition will likely continue to limit yields in some areas.

• Monsoon Dependence.Erratic monsoon rainfall affects 60-70 percent of cotton area, reducing yields through moisture stress and creating risk that reduces investment in seed, fertilizer, and pesticide inputs. Even with improved varieties and management, average yields in the mostly rainfed Central and South zones are likely to remain below those achieved in other countries with more reliable rainfall.

• Poor Seed Quality.Poor seed quality is a pervasive problem in cotton cultivation. Only about 35 percent of cotton area is sown with certified seed with assured varietal purity and germination. Commercially available seeds are often of poor quality, with sale of uncertified, substandard, and second generation (F2) hybrid seeds not uncommon. Although supplies of certified seed are generally available, financial constraints lead most farmers to use retained seeds or lower priced uncertified seeds from the market.

The proliferation of cotton varieties in markets and farmers’ fields confounds efforts to improve seed quality, maintain varietal purity, and improve crop management practices. Roughly 100-130 cotton varieties developed in both the public and private sectors are now cultivated in India. A study by the Central Institute for Cotton Research (CICR) indicates that the average cotton farmer

in the Central and South zones plants 3-4 varieties on farms averaging about 2 hectares, a practice that greatly complicates crop and seed management.

• Plant Protection.Insect and disease infestations, including bollworms, white fly, jassids, and leaf curl virus, are significant problems in India’s three cotton production zones. Although per hectare use of pesticides is higher for cotton than for any other crop, effective plant protection is constrained by poor farm management, pesticide subsidies that encourage indiscriminant use, and problems with pesticide quality. Improved onfarm pest management practices, including appropriate crop rotations, pest surveillance, pesticide applications, and adoption of Integrated Pest Management (IPM)

Page 55

practices have proved difficult to implement on small, resource- constrained farms.

• Crop Management.Large gaps between average onfarm yields and the potential of existing varieties also stem from poor management practices, including use of inappropriate varieties, seed rates, seed spacing, and fertilizer dosages. As in the case of plant protection, improvement of crop management practices is complicated by the need to extend recommended practices to large numbers of small, limited-resource farmers.

• Lack of Suitable Varieties. Cotton yields are affected by lack of varieties— or genotypes— suitable for some agronomic conditions. Indian scientists cite three priorities for plant breeding efforts: (1) higher yielding, short-duration, and pest-resistant cultivars for the irrigated North zone, (2) higher yielding varieties for the drought-prone Central zone, and (3) varieties suited for the soils on rice fallow common in the South zone.

Water Management issues

Water resources need to be protected from unsustainable use and pollution – between 1970 and 1995, 25% of the world’s freshwater ecosystems were lost. Agriculture takes up about 69% of global freshwater withdrawal and rice, wheat and cotton together account for 58% of the worldwide irrigated area, making these three crops the major consumers of freshwater (WWF, 1999). Approximately 73% of cotton is produced in irrigated fields and only 27% under rain-fed conditions. Most irrigation systems in cotton production rely on the technique of flood irrigation – freshwater is drawn from its source and transported to the place of its consumption. Losses of freshwater can occur through evaporation, seepage and poor water management.

Water losses can be drastically cut through good water management practices which are integral to the farming approach taken in the Fairtrade cotton standard including input of organic matter, crop rotation, and appropriate irrigation methods (if needed). In areas of water shortage, appropriate measures should be taken to improve water storage and collection systems.

But cotton issue

Bt cotton is one of the variety of cotton which gives the lager yield and the less quantity of pesticides are needed because of its inbuilt pest resistance capacity. But the research was carried out and it was found that the cotton growers who

Page 56

are using the Bt cotton at their farm need to use more the amount of pesticides compared to the other normal cotton growers after third year of the Bt cotton and the yield of the cotton goes down compared to the normal cotton growers. So it has a major impact on the cotton growers and also the resistance of the insect increases with the frequent use of Bt cotton.

Water Pollution

Large quantity of water is used at various stages of the cotton textile from Cotton farming to cotton finishing. Water gets polluted due to excess use of pesticides in the cotton faming. During rainy season these excess pesticides gets mixed with the surface water as well as the ground water intern causing the bad effect on the human health as well as the aquatic life.

Soil Pollution

Soil in the cotton growing region and near by region is getting polluted because of the excessive use of the chemical pesticides resulting into the low yield. This can be avoided by using the organic pesticides for growing the cotton.

Pollution due to Lint

The pollution due to lint in the cotton ginning industry is very hazardous to health. Most of the worker working at this place suffers form the lungs diseases

because of the pollution problems.

Page 57

5.3 TECHNOLOGICAL FACTORS :

Bangladesh and india are the top two textile producers in the world . The proceeds from textile and apparel exports have contributed greatly to the economic development of both countries. Millions of jobs are created in the related sectors. The continuous development of the textile industry is thus vital to both countries’ socio-economic health. Interestingly, textile enterprises in Bangladesh and India have adopted quite deferent business models and have followed divergent growth tracks.Through comparison of the textile industries India and Bangladesh, this paper aims to demonstrate the various technological evolution dynamisms in both countries and explore the reasons behind them. Before the analysis, it should be pointed out that technological innovations do not always refer to automation for high-tech. Sometimes enterprises may simply reorganised productions producers to increases the workers productivity. Structural and organisational changes are innovations too. Every countries has its own unique experience in establishing and developing new business models, in which the factors of post, productivity, quality , technology and design are adjusted according to market demands and the enterprises capacity. These improvements may be based on upgrading hardware, but often they are just the results of better managements of the existing technology. The booming Bangladesh and Indian textile and appealer industries show us detailed , multi-faceted technological developments in their specific and historical and social context.

Technology Improvement and Adaptation

The aforementioned characteristics describe the general trends of technology management in the textile and apparel companies in Bangladesh so far. In specific development phases and concrete enterprises, more varieties of developing approaches and strategies can be observed. These are continuous experiments for technological improvement , however, development is always a try-and-fail-process. The final success of the technological transformation usually means the adaptation of technology into the local social and market circumstances. Thus, there are also various development tracks in Bangladesh lately with the arrivals of new technologies.

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5.4 ECONOMIC FACTORS

Prices of Cotton

The Minimum Support Prices of Kapas (Seed cotton) for fair average quality announced for the cotton season 2005- 2006 (Oct – Sept), was fixed at last year’s level (2004-05) i.e. Rs.1760/- per quintal for medium staple variety (F-414/J-34/H- 777). The support price for H-4 (Long staple variety) has been fixed at Rs.1980/ - per quintal, an increase of Rs.20/- per quintal over support price of 2004-05. The MSP fixed for F-414/H-777/J-34 variety of Kapas will be applicable only to Rajasthan. The price of this variety, grown in Haryana and Punjab has been fixed keeping in view the respective quality differential, vis-à-vis Rajasthan, obtaining in these States.

The Cotton Corporation of India Ltd. (CCI) undertook massive MSP operations through out 2004- 05 in all the cotton growing states, and procured kapas equivalent to lint cotton of 27.52 lakh bales. In 2004-05, due to favourable seasonal conditions, there was a sharp rise in productivity, which peaked to a record 463 Kg. Lint/hectare, as compared to 399 kg. / lint per hectare during 2003-04, the ultivated area increased to 89.20 lakh hectares in 2004-05, as compared to 76.30 lakh hectares in 2003-04, and the production touched 243 lakh bales in 2004-05, as compared to 179.00 lakh bales in 2003-04.

5.5 POLITICAL FACTORS :

Bangladesh is rapidly changing as a dominant two-party system; BPN (center Right) and awami league (center left), to a very belief liberation movement. In short, Bangladesh has a parliamentary democracy.

PARTIES IN BANGLADESH

•Bangladesh awami league

•The Bangladesh Nationality party (BNP)

•The Bangladesh jamat-e-islami(BJI)

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5.6 LEGAL FACTORS :

TAXATION POLICY

In Bangladesh, the principal direct taxes are personal income taxes and corporate income taxes, and a value-added tax of 15% levied on all important consumer goods. The tax rate for characters in 25%. For the 2011-12 tax year starting from 1 july, 2011 & ends on 30 june,2012 the upper corporate rate was 45%. However, publicly traded companies registered in Bangladesh are charged a lower rate of 27.5%. Bank, financial institutions and insurance companies are charged the 45% rate. All the other companies are taxed at the 37.5% rate.

The constitution of Bangladesh was draft in the year of 1972 and has undergone 15 amendments. The utmost judicial body is the Supreme Court and justice are selected by the president and the judicial & law enforcement institute are feeble. Separation of powers judicial from executive was finally implemented on1st November, 2007. It is expected that this separation will make the judicial stronger & impartial. Law are loosely based on English general law family laws such as marriage & inheritance are based on religious scripts ,& therefore differ between religious communities.

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STEEPLED

ANALYSIS

OF

COTTON TEXTILE

INDUSTRY

Page 61


Textile industry of India based on cotton and cotton as the agricultural product, which found in rural areas so the social responsibility of the textile industry. Social stratification plays a vital role in rural societies. India is a culture include wide subculture families from these subcultures are having their own norms, beliefs, attitudes as well as their different culture of dressing various from different castle to castle culture to culture. Such as Bengalis wore cotton attire, gujarati, wear bandhani saris etc many more are there.

6.2 TECHNOLOGICAL FACTORS :The government has undertaken series of progressive messures like introduction of technology mission on cotton (TMC) technology upgradation found schemes for integrated textile park (SITP), reduction in customs duty on import of state of the art machinery, debt restructuring schemes,setting up of apparel training and design center(ATDCS), 100% foreign direct investment in the textiles sector under automatic route, setting up of national institute of fashion technology(NIFT) etc,for upgrading and strengthening the textiles sector in india. At present, the textiles industry is under going a substaintial reorientation towards other then clothing segments of textile sector, which is commonly called as technical textile.

6.3 ECONOMICAL FACTORS :Textile exports are targeted to reach $50 billion by 2010, $25 billion of which will go to the US. other markets include UAE, UK, Germany, France, Italy, Russia, Canada, Bangladesh and Japan.the name of these countries with their background can give thousands of insights to the thinking mind. The slant cut that will be producing a readymade garment will a sell at a price of 600 Indian rupees, making the value addition to be profitable by 300%.

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6.4 POLITICAL FACTORS

The centralized corrupt inefficient state structure is a hindrance to development. There is limited accountability and transparency, which has created a breeding ground for corruption and a growing mistrust from the public. The public administration also lacks financial and adequate human resource to perform its duties. Which indirectly affects the textile manufacturing business as all the business includes human being in it.

6.5 LEGAL FACTORS

Due to many legal policy trading in the textile factor has been liberalized such as by publicly traded companies traded companied registered in Bangladesh are charged rate of 27.5%. Banks, Financial institution and insurance companies are charged the 45% rate. All other companies are taxed at the 37.5% rate.

6.6 ENVIRONMENTS FACTORS

The state governments are authorized to grants environments’ to the stand alone grinding units. For the purpose of environments clearances, port based/inland bulk handling terminal should be treated at per with the stand alone grinding units and state governments should be authorized in this regard.

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PORTER ’ s

FIVE FORCE MODEL

OF

COTTON TEXTILE

INDUSTY

Page 64

One of the worst hit sectors during the skyrocketing interest rate scenario in the late 90s and early 2009s, the debt-laden Indian Cotton Textile Industry has spun many turn-around stories since the+n. Aided by lower interest rates, restructuring packages from financial institutions and the recent dismantle of quotas, the sector is today well poised to capture growth opportunities. In 2015, the sector contributed 20% to industrial production, 9% to excise collections, 18% of employment in industrial sector, nearly 20% to the country's total export earnings and 4% to the GDP. The textile sector employs nearly 35 m people and is the second highest employer in the country. Infect, it is estimated that one out of every six households in the country directly or indirectly depend on this sector. Here we analyse the sector's dynamics through Porter's five-factor model.

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7.1 Bargaining power of customers (demand scenario) :

Global textile & clothing industry is currently pegged at around US$ 440 bn. US and European markets dominate the global textile trade accounting for 64% of clothing and 39% of textile market. With the dismantling of quotas, global textile trade is expected to grow (as per Mc Kinsey estimates) to US$ 650 bn by 2010 (5 year CAGR of 10%). Although China is likely to become the 'supplier of choice', other low cost producers like India would also benefit as the overseas importers would try to mitigate their risk of sourcing from only one country. The two-fold increase in global textile trade is also likely to drive India's exports growth. India's textile export (at US$ 15 bn in 2005) is expected to grow to US$ 40 bn, capturing a market share of close to 8% by 2010. India, in particular, is likely to benefit from the rising demand in the home textiles and apparels segment, wherein it has competitive edge against its neighbour. Nonetheless, a rapid slowdown in the denim cycle poses risks to fabric players.

7.2 Bargaining Power of Suppliers :

India is the third largest producer of cotton in the world after China and US and has the largest area under cultivation. Cotton, a key raw material in the textile and garment industry, accounts for about 30% of the fabric cost and 13% of the garment cost. India has an abundant supply of locally grown long staple cotton, which lends it a cost advantage in the home textile and apparels segments. Other countries, like China and Pakistan, have relatively lower supply of locally grown long staple cotton. Moreover, low cotton prices due to a bumper cotton crop would enable India to lower its production cost and sustain pricing pressure. Further, efforts on improving the yield per hectare would ensure

Page 66

higher productivity and production, thereby providing the much-needed security of raw-material supply to textile producers.

India also enjoys a significant lead in terms of labour cost per hour (US$ 0.6 in 2004), over developed countries like US (US$ 15.1) and newly industrialised economies like Hong Kong (US$ 5.1), Taiwan (US$ 7.1), South Korea (US$ 5.7) and China (US$ 0.9). Also, India is rich in traditional worker ’s adept at value-adding tasks, which could give Indian companies significant margin advantage.

7.3 Threat of new entrants:

In the quota free regime, capacity expansion is the name of the game in the textile sector. Resultantly, smaller players who cannot venture into the global markets are flooding the domestic markets with excess supply, thus weakening the pricing scenario. Be it denim (Arvind Mills), home textiles (Welspun and Alok Industries) or branded apparels (Raymond), new capex and consolidation with international players is also not likely to safeguard margins for the larger players, unless they can tap a significant pie of the overseas markets.

7.4 Threat of substitutes :

Low cost producing countries like Pakistan and Bangladesh (labour cost 50% cheaper) are also posing a threat to India's exports demand. Infect, players like Arvind Mills have already started feeling the pinch as overseas buyers have started shifting to 'alternative sources', thus impacting their incremental volume off-takes.

7.5 Compétitive rival :

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India's logistic disadvantage due to its geographical location can give it a major thumbs-down in global trade. The country is distant from major markets as compared to its global competitors like Mexico, Turkey and China, which are located in relatively close vicinity to major global markets of US, Europe and Japan. As a result, high cost of shipments and longer lead-time coupled with lack of infrastructure facility may prove to be major hindrances.

The fragmented structure of the industry has also stood in the way of achieving true integration between the various links in the supply chain. The sector has one of the longest and most complex supply chains in the world, which the larger players are trying to correct by integrating their operations and improving efficiency levels.

Textiles being a fairly regulated sector till the recent past (quota regime), another indispensable leg of the above analysis is government regulations. Technology Upgradation Fund Scheme (TUFS) was launched in FY99 for a period of five years (later extended up to FY07) to promote the upgradation of the textile and jute industry. The scheme aimed at providing loans to the sector at internationally comparable rates of interest (5% lower than the domestic interest rates), which enabled the players to upgrade their technology at lower cost of capital. Establishment of 'Apparel Export Parks' and fiscal incentives in the recent budgets also indicate the government's resolve to aid the sector's growth and international competitiveness.

As one can comprehend from the above analysis, the potential for the sector's growth are ample, but the trick lies in competing effectively against rivals. Consolidation of the industry and delivery of better quality at effective rates and minimum lead time would certainly help the players surmount all competitive pressures.

PORTERS ’ Page 68

FIVE FORCES ANALYSIS

OF

BANGLADESH COTTON TEXTILE

INDUSTRY

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8.1 Competitive Rivalry between Existing Players :

Bangladesh is the 6th largest apparel and textile supplier in the US & EU market. It is shaping itself as a potential market player by providing the most quality with the cheapest price possible. Whilst the market is controlled by the bigger players like China and India, the role of Bangladesh is still important. Among the very few suppliers, Bangladesh imports most of its raw materials, but utilizes other factors of production to produce in a cheaper manner. It offers investment friendly atmosphere for the brand names to outsource their production process in Bangladesh. Bangladesh is putting up a show against other competitors like China and India. by providing available cheap labor. It has been facing tremendous growth even after thealleviation of the quota from the US market. This is due close customer

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relationship and quality production. Bangladesh has this advantage against its rivals. Bangladesh is one of those countries who cannot fulfil its quota provided by the larger markets. As a result of that, many foreign companies are merging in to use Bangladesh as a hub to prepare their product by outsourcing in Bangladesh and then gaining entrance to markets which were previously unavailable to them. Bangladesh is taking advantage of this and inviting investors, and foreign companies to place orders to attain this facility. It should focus on placing more orders instead of making its export rates efficient and strong

8.2 Bargaining Power of Suppliers :

Bangladesh has always been enjoying the upper hand in ordering its inputs from it suppliers. Bangladesh has very few input or raw materials of its own. Most of them are imported. Although this leads to a problem in reducing the opportunity to initiate back ward linkage, and thus increasing the supplier power, Bangladesh still manages to acquire the inputs at world price from its suppliers.But the most importing aspect of Bangladesh’s export industry would always be theenthusiasm and the prospect of growth it provides to the stakeholders in terms of successand prosperity. Bangladesh’s domestic suppliers’ power is increasing in a slow but steadymanner as more and more local companies are stepping up to the task. They are creating an integrated system of supply channel management by which the manufacturer’s work load isreduced. Companies are more prone to order through local suppliers who themselves apply to the task of importing raw materials and components necessary for the production process. And the favourable attitude of the government is also helping this growth. The back to back LC process was approved by the government to facilitate the growth of the industry. Bangladesh has a good reputation in terms of timely payment to the suppliers. This reputation is helping create a longer term relationship with the suppliers (foreign) and is also giving the local firms initiative to step into the supply chain. Bangladesh gives the suppliers a large scale advantage as the industry is quite concentrated in area basis. A good global reputation is helping Bangladesh match the price with international quoting with the suppliers both foreign and local ones. Suppliers although having a sort of upper hand over Bangladesh, also regard Bangladesh as a reliable source of repayment. This reputation has been helping Bangladesh to ensure prompt supply of raw goods

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8.3 Bargaining Power of Customers :Bangladeshi manufactures realize that the buyer possess more power than themselves.China’s lead and India’s march to thetop keep the Bangladeshi manufacturers/ suppliers on their toes. Bangladesh is providing a large space of choice to the provider in terms of quality and cost. It is offering the lowest possible production price and also work that is best in quality. Due to high switching opportunities for the customers, Bangladesh has to perform or allow the customers to win in many cases. Bangladesh plans to use cost-effectiveness to present itself as the best option to the buyers. The important factor here is that many of the companies in Bangladesh are either franchises or subsidiaries. Along with them the local companies are giving Bangladesh a look of the best outsourcing place of the lot. Many of the reputed companies, brands are outsourcing their products in Bangladesh as they get the most quality in the cheapest price possible. Buyers are also interested in the growth aspect of the Bangladeshi suppliers. Bangladesh is growing as a major player in the textile and apparel industry globally and due to the quota system it is quite an important player in the field. Bangladesh still has its quota left in the EU market where countries like China don’t have the entry. So, many countries are planning to use Bangladesh as a hub and buy the service to export under its label. That gives Bangladesh a comparative advantage against the buyers of its services. And due to immense quality assurance, Bangladesh is continuing to be the best choice for many buyers in the industry.

8.4 Threat of New Entrants :Bangladesh has yet to reach economies of scale in terms of production. Thus it allows potential entrants to pose a threat to its growth. But again, if we just analyse the growth of textile and RMG sector, this threat might seem negligible. Textile in Bangladesh is in agrowing stage. It’s growing in a rapid pace and is posing itself as an entrant to the moreestablished players. Thus the threat of new entrants is quite minimal to its concern.Moreover, new entrants would have to gain an advantage against Bangladesh whose growth ratio is almost 20% per year even after the MFA. A newer entrant would thus cause fewer troubles to Bangladesh. The greatest advantage that Bangladesh has right now is its cheap labour. Cheap labour would continue to be available until the living standards go up. Till that happens, labours will have low rates in terms wages and keep

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Bangladesh safe from any sort of new entrants. One factor has to be kept in mind that, due to the unstable political scenario in recent years, investors and foreign firms are reluctant in investing in Bangladesh. Using this opportunity, countries like Sri Lanka and other small Latin American countries can steal away potential buyers from Bangladesh.

8.5 Threat of Substitutes :

Bangladesh, in terms of substitutes, plays both the roles of an affected and an opportunist. China and India are growing their customer base at a higher pace than Bangladesh. This is due to poor country branding, and less power to influence customers. Due to these reasons, customers sometimes prefer China or India to Bangladesh. More to add, Bangladeshi products are being substituted due to lack of supplier power andgovernment’s reputation. Many firms, buyers, investors are now hesitating to invest in Bangladesh due to unstable political scenario. Thus the opportunity for Bangladesh is being substituted to either China or India. Also, the substitute cost is not that high for buyers to switch to a Chinese producer or even to a Sri Lankan producer. On the other hand, due to the lower production cost, Bangladesh plays a major role in substituting the Chinese and Indian manufacturers. This opportunity has to be nurtured by the Bangladeshi industry to ensure its growth and profitability. Bangladesh possess the ultimate weapon of cheap labour and thus at times, it has to use it to substitute opportunities from its competitors.

Page 73

EXPORT

POLICY

OF

INDIA

Page 74

9.1 EXPORT Policy in India:

• Additional benefit of 2% bonus, over and above the existing benefits of 5% / 2% under Focus Product Scheme, allowed for about 135 existing products.

• 256 new products added under FPS (at 8 digit level), which shall be entitled for benefits @ 2% of FOB value of exports to all markets.

• Tea and CSNL Cardinol included for benefits under VKGUY @ 5% of FOB value of exports.

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• Zero duty EPCG scheme, introduced in August 2009 and valid for only two years upto 31.3.2011, has been extended by one more year till 31.3.2012.

• Duty Entitlement Passbook (DEPB) scheme has been extended beyond 31.12.2010 till 30.06.2011.

• Concessional Export Credit: Interest subvention of 2% for pre-shipment credit for export sectors namely, Handloom, Handicraft, Carpet and SMEs for all export sectors.

• Exporters shall now have the flexibility to get a high value EPCG authorisation by filing their EPCG application on Annual basis.

• Clarification on the availability of 4% SAD refund benefit.

• Facility of a data preparation module for Advance Authorization and Export Promotion Capital Good (EPCG) has been provided on an offline mode.

• Finished Leather export shall be entitled for Duty Credit Scrip @ 2% under FPS.

• Duty free import of specified trimmings, embellishments etc. shall be available on Handloom made-ups exports @ 5% of FOB value of exports.

• Readymade Garment sector granted enhanced support under MLFPS for a period of further 6 months

9.2 OBJECTIVES OF EXIM POLICY :

• To facilitate sustained growth in exports from India and import in India.

• To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods scheme required for augmenting production and providing services.

• To enhance the technological strength and efficiency of Industry Agriculture industry and services, thereby improving their competitive

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http://www.eximguru.com/exim/dgft/exim-policy/2008/chapter_5_export_promotion_capital_goods_epcg_scheme.aspx

http://www.eximguru.com/exim/dgft/exim-policy/2008/chapter_5_export_promotion_capital_goods_epcg_scheme.aspx

strength while generating new employment opportunities, and to encourage the attainment of internationally accepted standards of quality.

• To provide clients with high-quality goods and services at globally competitive rates. Canalization is an important feature of Exim Policy under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies.

The Government of India notifies the Exim Policy for a period of five years (1997-2002) under Section 5 of the Foreign Trade (Development and Regulation Act), 1992. The current policy covers the period 2002-2007. The Export Import Policy is updated every year on the 31st of March and the modifications, improvements and new schemes became effective from 1st April of every year.

All types of changes or modifications related to the Exim Policy is normally announced by the Union Minister of Commerce and Industry who co-ordinates with the Ministry of Finance, the Directorate General of Foreign Trade and its network of regional offices.

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http://www.eximguru.com/exim/dgft/offices.aspx

http://www.eximguru.com/exim/dgft/default.aspx

http://www.eximguru.com/exim/dgft/acts-and-rules/foreign-trade-development-and-regulation-act-1992.aspx

http://www.eximguru.com/exim/dgft/acts-and-rules/foreign-trade-development-and-regulation-act-1992.aspx

http://www.eximguru.com/exim/dgft/exim-policy/2008/default.aspx

9.3 POLICY AND REGULATORY FRAMEWORK TOWARD FDI :

The Government has put in place a policy framework on Foreign Direct Investment. which is embodied in the Circular on Consolidated FDI Policy, issued which is updated every six months, to capture and keep pace with the regulatory changes. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India makes policy pronouncements on FDI through Press Notes/ Press Releases which are notified by the Reserve Bank of India as amendments to the Foreign Exchange Management (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000 (notification No.FEMA 20/2000-RB dated May 3, 2000).

The procedural instructions are issued by the Reserve Bank of India vide A.P. DIR. (series) Circulars. Thus, regulatory framework for FDI consists of Acts, Regulations, Press Notes, Press Releases, Clarifications, etc.

FDI policy is reviewed on an ongoing basis and measures for its further liberalization are taken. Change in sectoral policy/sectoral equity cap is notified from time to time through Press Notes by the Department of Industrial Policy & Promotion. Policy announcement by DIPP are subsequently notified by RBI under FEMA

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9.4 POLICIES OF FDI :

· 100% FDI allowed in medical devices

· FDI cap increased in insurance & sub-activities from 26% to 49%

· 100% FDI allowed in the telecom sector.

· 100% FDI in single-brand retail.

· FDI in commodity exchanges, stock exchanges & depositories, power exchanges, petroleum refining by PSUs, courier services under the government route has now been brought under the automatic route.

· Removal of restriction in tea plantation sector.

· FDI limit raised to 74% in credit information & 100% in asset reconstruction companies.

· FDI limit of 26% in defence sector raised to 49% under Government approval route. Foreign Portfolio Investment up to 24% permitted under automatic route. FDI beyond 49% is also allowed on a case to case basis with the approval of Cabinet Committee on Security.

· Construction, operation and maintenance of specified activities of Railway sector opened to 100% foreign direct investment under automatic route.

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IMPORT

POLICY

OF

BANGLADES

Page 80

10.1 IMPORT POLICIES IN BANGLADESH :

What is Import :

Import trade of Bangladesh is controlled under the Import & Export control Act (IEC) 1950. Authorized Dealer Banks will import the goods into Bangladesh following import policy, public notice, F.E circular & other instructions from competent authorities from time to time.

Definition on Import:

Buying of goods & services from foreign countries for sales is considered as import. The person or organization who import the goods & services from foreign countries is known Importer and from which goods & services are imported is known as Exporter. In case of Import, the importers are asked by their Exporters to open a Letter of Credit (L/C). So that there payment against goods & services is ensured.

10.2 GENERAL PROVISION FOR IMPORT :

Regulation of Import – Import of goods under this order shall be regulated as under:

Banned list: Banned goods are not allowed to import through the foreign exchange transaction. Such as Live Swine, Eggs of shrimps and prawns etc.

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Restricted list: Any item, which is restricted by the “Import Policy Order 1997-2002” in Annexure –1(b) shall be importable only on fulfillment of the conditions (b) specified therein against the item.

Free Importable Items: The items which are not included either in the Banned list or Restricted list shall be freely importable:

In addition to the conditions mentioned in the Restricted and Banned Lists the conditions restrictions and procedures for import of various items mentioned in the test portion of this Order, shall as usual apply in case of import of those items.

Types of Importer :

Goods are imported for personal use, commercial or industrial purpose. So there are three kinds of importer such as:

Personal Importer.

Commercial Importer.

Industrial Importer.

Letter of Credit (L/C)

Letter of Credit (L/C) is a payment guarantee to the seller by the issuing bank on behalf of the importer. In other words, it is a letter of the Issuing Bank to the beneficiary undertaking to effect payment under some agreed conditions. L/C is called documentary Letter of Credit, because the undertaking of the Issuing Bank is subject to presentation of some specified documents. Through the L/C Buyers & Sellers enter into a contract for buying and selling goods/ services and the buyer instructs his bank to issue L/C in favor of the seller. Here bank assumes fiduciary function between the buyer and seller.

Import Procedure

To import a person should be an importer. In accordance with Import & Export Control Act, 1950 the office of chief Controller of Import & Export provides the registration to the importer. After getting this person has to secure a letter of

Page 82

credit authorization from Bangladesh Bank. Then he becomes a qualified importer; He is the person who requests or instructs the opening bank to open an L/C. He is also called opener or applicant of the Letter of Credit

10.3 Import Registration Certificate

Import Registration Certificates are issued by the office of chief controller of imports and exports. Intending importers are to submit applications to CCI & for registration along with required documents are as follows:

Application

Trade License

Nationality Certificate

Income tax certificate along with TIN

Bank Certificate

Membership certificate from Trade Association Certificate of incorporation, Article and Memorandum of Association. Partnership Deed for partnership firm.

10.4 Steps Involved in Import procedures :

Procurement of IRC from the concerned authority

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Signing purchase contract with the seller

Requesting the concerned bank (importer’s bank) to open an L/C on behalf of the importer favoring the exporter/seller/beneficiary.

The issuing bank opens/issues the L/C in accordance with the instructions/request of the importer & request another bank (advising bank) located in sellers exporter’s country to advice the L/C to the beneficiary. The issuing may also request the advising bank to confirm the credit, if necessary.

The advising bank advises the seller that the L/C has been issued.

As soon as the exporter /seller receives the L/C & is satisfied that he can meet L/C terms & conditions, he is in na position to make shipment of the goods

10.5 Import Procedure:

Import of goods from outside Bangladesh is regulated by the Ministry of Commerce in accordance with Import & Export (Control) Act, 1950 and the notification issued thereunder. In terms of the importers, Exporters & indentors (Registration) order, 1981 no person can import goods into Bangladesh unless he is registered with the chief controller of Import & Export (CCI&E) or exempted from the provision of the said order. Before any Letter of Credit is opened or remittance made on behalf of any importer for import into Bangladesh, Authorized Dealers must verify that the importer is registered with the CCI&E or otherwise exempted from such registration. Import shall be allowed only against opening of irrevocable Letters of Credit unless otherwise authorised by CCI&E in certain exceptional cases as mentioned/ in the Import Policy order in force.

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Future Possibilities For Trading Of Raw Cotton In Bangladesh

India has promised to supply up to 20 lakh bales of raw cotton to Bangladesh every year irrespective of any ban that may be imposed on its exports in future.

There is, however, yet to be an agreement on whether the cotton purchase pact would be Business-to-Business (B2B) or Business-to-Government (B2G). While India wants it to be a B2G arrangement, with public sector procurement agency Cotton Corporation of India canalising the exports, Bangladesh wants it to be strictly a B2B affair.

“Bangladesh feels that it is a lot cheaper to buy it from a private seller rather than a Government agency and it also takes less time,” a Textile Ministry official told Business Line.

But India’s argument is that when there is a ban on exports of the raw material in the country, the only feasible way to export it would be through a canalising agency

BTMA AND BGMEA are represent readymade garments sector and there future possibilities of fabric manufacture, knidwear, the fabric dyes units are very high. So to sell there raw cotton with high quality will great opprtuinity for us

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References :

http://www.indiaonestop.com/cotton/cotton.htmhttp://www.ers.usda.gov http://www.citiindia.com/industry_overview/india_industry_overview.html http://cicr.nic.in/

http://www.infodriveindia.com/india-export-data/cotton-raw-cotton-export/fc-bangladesh-report.aspx

http://www.business-standard.com/article/markets/cotton-exports-may-fall-by-40-114102900590_1.html

WWW.equitymaster.com/detail.asp ?

Satudytex.blogspot.in/2014

www.agra-net.net

icebusinesstimes.net

www.ers.usda.gov

http://www.financialexpress.com/artical/market/commodity/cci-comes-out-with-global-tender-for-export-of-cottan-to-bangadesh/81887/

http;//cotcorp.gov.in/pdf/annual_rep1314.pdf

www.slidshare.net/iconner/steeple

http://www.google.co.in/?gfe_rd=cr&ei=jt9nvviqkq7gv8aef-pgadgws_rd=ssl#q=steepaled+analysis+f+cottanindustry+in+bangladesh

http://www.google.co.in/?gfe_rd=cr&ei=jt9nvviqkq7gv8aef-

http://www.google.co.in/?gfe_rd=cr&ei=jt9nvviqkq7gv8aef-pgadgws_rd=ssl#q=steepaled+analysis+f+cottanindustry

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http://www.google.co.in/?gfe_rd=cr&ei=jt9nvviqkq7gv8aef-



http://www.agra-net.net/

http://WWW.equitymaster.com/detail.asp





http://cicr.nic.in/

http://globaledge.msu.edu/countries/bangladesh

http://en.m.wikipedia.org/wiki/Bangladesh

http://www.suddefeance-developpement.com/en/countryprofiles/bangladesh/presentation.html

https://www.google.co.in/search?client=ms-android-asusandq=introduction+of+bangladesh+countryandoq=introduction+ofbangladesh+and aqs=mobile-gws-lite,.1.0l5#q=taxation+policy+of+Bangladesh

http://wrap.warwick.ac.uk/36239/

http://saadislan.wordpress.com/2012/10/27/taxation-in-bangladesh-project-for-nsu-students-act-322-nsu/

http://www.thehindubusinessline.com/economy/agri-business/bangladesh-to-get-20-lakh-bales-indian-cotton/article5039007.ece

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http://en.m.wikipedia.org/wiki/Bangladesh

http://globaledge.msu.edu/countries/bangladesh



http://wrap.warwick.ac.uk/36239/



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