Turmoil In Bangladesh: A Boon For Indian Textile Industry?
Bangladesh, which is currently embroiled in severe political crisis, is renowned for its thriving textile sector. The country’s substantial income from garment exports is now under threat due to the ongoing turmoil. As a result, global textile importers are beginning to explore alternative markets, including India.
Bangladesh is a significant player in the global textile market, with monthly apparel exports ranging from US$ 3.5 billion to US$ 3.8 billion. It holds a considerable market share in the European Union and the United Kingdom, and commands 10% of the market in the United States. In comparison, India’s monthly textile exports are between US$ 1.3 billion and US$ 1.5 billion.
According to a report in Business Standard, industry experts aver that if 10-11% of Bangladesh’s export volume shifts to Indian hubs like Tiruppur, India could see an additional US$ 300-400 million in monthly business. KM Subramanian, President of the Tiruppur Exporters’ Association, expects a 10% increase in orders this financial year.
Prabhu Damodaran, Secretary of the Indian Texpreneurs Federation, believes that India is well-positioned to absorb these diverted orders. “We can handle an additional US$ 300-400 million in orders immediately,” Damodaran stated, noting that prolonged disruption in Bangladesh could significantly shift buyer sentiment towards India and other markets.
The unrest in Bangladesh comes at a critical time, as the country was projected to surpass $50 billion in annual exports in 2024, up from approximately US$ 47 billion in 2023. The ongoing crisis, however, threatens these expectations.
Additionally, many manufacturing units owned by Indian companies in Bangladesh, such as Shahi Exports, House of Pearl Fashions, Jay Jay Mills, TCNS, Gokaldas Images, and Ambattur Clothing, are likely to relocate to India. S Chandrasekaran, a trade policy analyst, highlighted that the disruption has stalled consignment movements and broken supply chains, especially with the approaching Christmas season.
The political crisis, marked by Prime Minister Sheikh Hasina’s resignation and the announcement of an interim government by Bangladesh Army Chief General Waqar-uz-Zaman, represents the country’s worst turmoil since its independence from Pakistan in 1971. If the crisis prolongs, India’s textile industry stands to gain substantially due to the shifting market dynamics.
