Potential Shift in Garment Orders to India Due to Bangladesh Turmoil

Indian exporters indicated on Tuesday that the political turmoil in Bangladesh might temporarily redirect garment orders to India. They emphasised that India does not intend to take advantage of this situation in its neighbouring country. On Monday, former Bangladesh Prime Minister Sheikh Hasina resigned and fled due to public outrage over her government's controversial job quota system for veterans' families.

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Mithileshwar Thakur, Secretary General of the Apparel Export Promotion Council (AEPC), expressed concern about the current situation in Bangladesh. "We wish that the situation stabilises quickly and normal business resumes," he said. Thakur reiterated that India has no intention of exploiting this unfortunate situation in its friendly neighbouring country.

Impact on Indian Garment Industry

The Indian garment industry is striving to grow its ready-made garment (RMG) exports based on its own merits. However, Thakur noted that in the short term, garment orders might shift to India, and the Indian apparel industry may need to fill the gap caused by this severe disruption.

Ludhiana-based exporter S.C. Ralhan highlighted that the political crisis in Bangladesh could affect timely payments. He mentioned that normalisation of the situation would facilitate smooth movement of goods. Ralhan also pointed out that Indian firms with units in Bangladesh would face challenges, particularly regarding timely payments.

Trade Figures and Key Exports

Bangladesh is a significant player in the global garment industry and imports cotton from India. India's exports to Bangladesh decreased to USD 11 billion in 2023-24 from USD 12.21 billion in 2022-23. Imports also declined to USD 1.84 billion in the last fiscal year, down from USD 2 billion in 2022-23.

India's main exports include vegetables, coffee, tea, spices, sugar, confectionery, refined petroleum oil, chemicals, cotton, iron and steel, and vehicles. The primary import items are fish, plastic, leather, and apparel.

The ongoing political unrest in Bangladesh has led to more than 400 deaths due to protests against the job quota system. This turmoil has raised concerns among Indian exporters about potential disruptions in trade and payments.

Indian exporters hope for a quick resolution to the crisis in Bangladesh to ensure stability and continuity in business operations between the two countries.