Bangladesh's clothing exports to India is facing setback as about two dozens local garment factories have failed to secure payment of nearly $5.0 million from an Indian buyer Liliput Kidswear Ltd, exporters said.

They feared they would default on bank loans and would not be able to pay workers' wages, which might trigger labour unrest in their factories only because of the non-payment by the Indian company.

"We have made shipments after concrete deals with the Indian company. Four months have passed, but I am yet to receive my payments," Managing Director of Gemini Garments Limited AM Fazli Hussain, an exporter, told the FE Monday.

"The payment of $4,12,000 has become uncertain. How can I make the payout to workers and the bank," he said.

A total of 22 garment manufacturers have not received their payments from the Liliput though they exported their products according to deals, Md Siddiqur Rahman, second vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said.

The value of total exports to the Indian company is about $5.0 million, he said.

The BGMEA is trying seriously and has discussed the matter with different concerned agencies both in India and Bangladesh for solving the issue, he said adding recently the Association sought the central bank's help in this connection.

The exporters are Mazkan Jeans Ltd, Vertex Apparels Ltd, Barat Sweater Ltd, Gemini Garments Ltd, A Plus Sweater, Sinha Fabrics Ltd, Anupam Fashions Ltd, Panshi Knit Pvt Ltd, Kent Fashion Pvt Ltd, Annesha Style Ltd, Hypoid Lingeries Ltd, Defoin Design Ltd, New Generation Fashion Ltd, Uttara Woven and Knit Ltd, DNS Sweaters Ltd, Ayesha Enterprise, IP Jack Knitting, T-Mart Computerised Sweater, Hallmark Designwear, Apparel Concept, Alif Garments and ND Apparels.

According to ICC Publication 600, these exporters are likely to be categorised as bank defaulters and they will not be able to pay workers' wages only because of non-payment by Lilliput Kidswear, Mr Siddiqur Rahman said expressing fear that this might flare up labour agitation in those units.

"We have already requested the authorities of Bangladesh Bank (BB) to issue of letter to the lien banks of 22 victim exporters requesting them to be flexible in banking transaction for their survival until the problem was resolved," he added.

India will be one of the country's main markets in near future, he said, adding still we are not familiar with the Indian market.

"Buyers and sellers are introducing themselves with the market players. The business will increase sharply when a reliable relationship will be built between them," he said.

"It is an isolated incident and we believe this particular occurrence will not hamper the trade relations between the two countries," he added.

President of India-Bangladesh Chamber of Commerce and Industry (IBCCI) Abdul Matlub Ahmad said: "It may take time but the issue will be resolved."

Bangladesh High Commission in Delhi recently said Sanjeev Narula, chairman and managing director of Liliput, gave the assurance of clearing all outstanding dues to Bangladeshi suppliers by May.

Earlier, the Indian government has given duty-free access of Bangladeshi garments to India as a gesture of better bilateral relations between the two countries.

The facility encouraged the local garment exporters to explore the Indian market with much enthusiasm.