The Indian government earlier agreed to allow the eight million pieces of readymade garments (RMG) annually from Bangladesh under three categories. Bangladesh can export the garments from the first month of the next fiscal year, exporters said.

The Indian government recently agreed to allow three million pieces of Bangladeshi readymade garments that are made of Indian fabrics.

India will allow another three million RMG products made of either Indian or Bangladeshi fabrics and the rest two millions made by any member country of South Asian Association for Regional Cooperation (Saarc) including Bangladesh.

The South Asian Free Trade Area (Safta) agreement came into operation on January 1, 2006 but the actual trade will start on July 1 as Sri Lanka and Pakistan are yet to ratify the Safta deal.

India put a number of RMG products on its Safta sensitive lists to limit Bangladeshi RMG export surge but agreed to allow eight million pieces of RMG products a year from Bangladesh.

A commerce ministry official said the RMG export under Safta accord will open up new opportunities in Indian market for Bangladeshi garment makers.

Under the existing system, Bangladeshi exporters have to pay 15 percent import duty and 20 percent other tariffs to enter India.

Bangladesh exported RMG products worth US$ 3 million to India in fiscal year 2004-05.

Bangladeshi low-priced RMG goods have huge demand among Indian lower middle class people due to competitive price of the products, sources said.

Exporters hope Bangladesh will be able to reap full benefit of the Indian offer to export Bangladeshi RMG under 0 to 5 percent duty.

"Our products are very competitive in prices and good in quality. The offer will fully be realised by the Bangladeshi RMG makers," an exporter said.