They said central bonded warehouse is not essential for survival of RMG industry in the quota-free regime as every export-oriented garment manufacturing unit has an individual warehouse for keeping imported raw materials.

The textile millers said if BGMEA (Bangladesh Garment Manu-facturers and Exporters Association) agree to close down the individual warehouses, they will also lobby for setting up of central bonded warehouses.

Leaders of Bangladesh Textile Mills Association (BTMA) said this at a press conference clarifying their position on the demand of garment exporters who believe central bonded warehouses will help them cut lead time significantly.

"Still we think that there is no need of setting up central bonded warehouse," said MA Awal, chairman of BTMA. "But central bonded warehouses can be set up replacing the existing individual bonded warehouses," he added.

RMG exporters have long been demanding government permission to set up central bonded warehouse where raw materials imported in advance without opening L/C would be preserved for avoiding unnecessary delay in import process.

But textile mill owners think setting up of such warehouses would be harmful to local textile industry, which is capable to supply significant volume of raw materials to the export-oriented garment factories.

RMG, the largest export earning sector, fetched $5 billion in 2002-03 fiscal year, of which $2.77 billion came from garments based on imported fabrics and $2.27 billion from garments based on locally made fabrics.

The textile millers said value addition in garments made of local fabrics is almost three times of the imported fabrics-based garments.

The BTMA president said there is no logical basis of BGMEA leaders' claim that RMG export volume would increase by four times once the central bonded warehouse is established and European Union's rules of origin are eased.

He said the RMG manufacturers rather concentrate on capacity building, setting up of special economic zone and compliance issues to retain their export market in the post-MFA (multi-fibre arrangement) era beginning next year.

Referring to BGMEA's view exchange meeting on May 30 last, Awal said those who conveyed their theoretical opinions at the meeting on the central bonded warehouse and rules of origin do not have practical experiences.

Anisul Islam Mahmud, executive member of BTMA, said the RMG backward linkage industry will be hit hard if such warehouse is allowed to operate. "The huge Tk 10,000 crore investment in textile industry will also be ruined."

Replying to a question, former chairman of BTMA Matin Chowdhury said price of local fabrics is eight percent higher than imported Indian fabrics. "But there are some additional expenses in import from India."