Government revenue losses in thousands of crores due to illegal Indian workers
Publish: 13 Feb 2024, 06:04 AM
At least 500,000 Indians are employed across various industrial and commercial enterprises in Bangladesh, primarily on visit or tourist visas. Among them, around 150,000 Indian nationals hold prominent positions within the garment, leather, information technology, and construction sectors. The majority enter Bangladesh on Business (B-Visa) or Tourist (T-Visa) visas, lacking the requisite work permits or authorization (A-3 visa). In the event of visa expiration, individuals face a fine of only 30,000 taka per year for overstaying. Consequently, many have continued working in senior roles within Bangladesh's industries for years without proper documentation. Authorities lack precise data or estimates on this matter. As a result, Indians and Sri Lankans extract approximately 34 thousand crore taka annually from the garment and leather industries.
Around 1980, during the onset of the Tamil rebellion, there was a notable shift in the garment industry's growth from Sri Lanka to Bangladesh. Concurrently, many skilled labourers migrated from Sri Lanka to Bangladesh. By the 1990s, Indians began entering Bangladesh's domestic industry, which Sri Lankans had previously monopolized for over a decade. Over time, workers from various regions of India, particularly Rajasthan, Jammu, Kashmir, Mumbai, etc., started migrating to different segments of the garment industry in Bangladesh.
By 2000, Indian software companies had achieved complete dominance over the ready-made garment industry's Enterprise Resource Planning (ERP) systems. Consequently, Indian workers controlled any garment factory's management, production, financial transactions, customer orders, and labour management. This trend has persisted for over three decades, solidifying the influence of Indian expertise within the industry.
Today, Sri Lankans hold prominent positions primarily within the engineering sector of the ready-made garment industry. However, Indians have gained control over all aspects of the industry, including factory production, marketing, and management. Bangladeshi nationals are mostly relegated to lower-level positions as workers or labourers, with limited opportunities for advancement. Most of the industry's income flows to India, China, and Sri Lanka, with Indian workers receiving the highest remuneration. It's noteworthy that most of these Indian workers are employed illegally in Bangladesh.
These undocumented foreign workers employ various tactics to receive their wages or salaries, with 80 per cent of their earnings typically obtained in cash payments. They then transfer this cashback to their countries through informal channels like hundi. The remaining 20 per cent is received through official banking channels, often utilizing multinational banks. Consequently, the Bangladesh government lacks awareness of the outflow of the country's currency. Asaduzzaman, who served as the chief merchandiser in a prominent garment factory for a decade and now operates his factory, shared this insight.
India, Sri Lanka, and China collectively control 60 per cent of the high to mid-end segment of the ready-made garment industry. As Asaduzzaman highlighted, approximately 80% of this share comprises Indian workers or officials. Despite this significant presence, no precise tally of foreign workers exists in Bangladesh's ready-made garment, leather, and information technology sectors.
The government has compiled statistics regarding the presence of foreigners in the country up to December 31, 2023. According to these figures, 107,167 foreigners are residing in Bangladesh. Among them, 10,485 individuals entered on business and investment visas, 14,399 were employees, 6,827 were students, and 75,456 arrived on tourist visas.
Notably, according to Bangladesh government, Bangladesh's largest contingent of foreign citizens consists of Indians, totalling 37,464 individuals, followed by 11,404 Chinese citizens.
However, according to Transparency International Bangladesh (TIB), the number of foreigners working in Bangladesh exceeds two and a half lakh. Most of these individuals enter the country on tourist visas and engage in illegal employment without proper authorization. More than half of these illegal workers are Indian citizens. TIB estimates that approximately 26,400 crore taka are being smuggled out of the country annually through their activities. Additionally, legally and illegally employed foreigners contribute to revenue evasion of about 12,000 crores taka annually, totalling around two and a half lakh individuals.
The number of foreign workers paying taxes in tax zone-11 amounts to only 9,500 individuals. However, the government lacks information regarding the income of the remaining foreign workers. Transparency International Bangladesh (TIB) has reported that even among the 9,500 taxpayers, many have concealed accurate information about their income.
Furthermore, it's estimated that around 150,000 Indian citizens are employed in various sectors, such as ready-made garments, leather, and construction industries, despite being on tourist visas. Notably, in the tannery industry, many top workers at Apex and Bay factories are of Indian origin.
Several prominent business groups in Bangladesh, including Bashundhara Group and Beximco Group, have many Indian employees across various subsidiaries. Many Indian nationals hold critical positions within these organizations, such as the personal staff of the Group Managing Director and management roles within specific subsidiaries like Beximco LPG, Textiles, and Nitex. Many of these individuals enter the country on tourist visas and continue working for extended periods.
Furthermore, the garment factories under the Hamim Group also employ many Indian workers, particularly in management-level positions within the garment sector. Sources within the Ha-Meem Group have verified this information.
Despite Bangladesh's numerous skilled and highly proficient workers, Indian companies' ownership of Enterprise Resource Planning (ERP) software has created a situation where Indian nationals often form syndicates to secure positions whenever senior staff vacancies are advertised. As soon as such positions are announced, Indian nationals swiftly introduce their associates into these roles.
Asaduzzaman, a young entrepreneur in the garment industry, highlighted that the recruitment of high-ranking personnel is frequently conducted through platforms like LinkedIn. Once a senior staff member is hired, they tend to favour the appointment of Indian nationals to fill other high-ranking positions within the factory. These Indian citizens often arrive on tourist or visit visas and work without paying taxes for extended periods. Consequently, a significant amount of money, totalling thousands of crores, is funnelled out of Bangladesh through illegal channels such as hundi.
According to the law, paying income tax and obtaining a work permit is obligatory when residing and working in Bangladesh. However, many foreigners, including those on A-3 visas, engage in projects without obtaining work permits due to the absence of such a requirement in the visa policy established in 2006. This loophole facilitates tax evasion for these individuals.
The issue of foreigners staying in Bangladesh without work permits is concerning, as they often exploit loopholes to prolong their stay. Some even obtain new passports from their embassies in Dhaka to circumvent restrictions, allowing them to re-enter the country. Additionally, blacklisted individuals manage to return using fresh visas issued under new passports. This practice is facilitated by the opportunity to alter visa categories while residing in Bangladesh.
Notably, the Bangladesh Export Processing Zone Authority (BEPZA) lacks comprehensive data compared to other agencies such as the Bangladesh Investment Development Authority (BIDA), Immigration, and Transparency International Bangladesh (TIB). BEPZA reports 1,830 foreign workers across various factories, including 9 EPZ garments. Among them are 875 Taiwanese, Hong Kong, and Chinese citizens, primarily working as technicians. Additionally, 183 Indian citizens hold high-ranking positions, such as CEOs, COOs, CFOs, and GMs. Furthermore, 470 Sri Lankan citizens are employed mainly in the engineering sector of these factories.
Professor Dr CR Abrar, Executive Director of the Refugee and Migratory Movements Research Unit (RMMRUI) at Bangladesh Institute of Labor Studies (BILS) emphasized the urgency of addressing this issue. He stressed the importance of maintaining accurate records of foreign workers' employment and remittances and taking action against those working without proper permits. Furthermore, Dr Abrar questioned the necessity of foreign workers in specific sectors and advocated for initiatives to develop a local skilled workforce to meet industry needs.
