Bangladesh, known for its textile sector and a significant earner from clothing exports, is facing a severe political crisis that is expected to heavily impact its industry. With the global spotlight on the unfolding events, international buyers, especially textile importers, are seeking alternative markets, notably India.
Bangladesh represents a key market for Indian textiles, serving as both a manufacturing hub and a major export destination. Bangladesh boasts a monthly apparel export value of $3.5-3.8 billion, holding a substantial share in the European Union, the United Kingdom, and a 10% market share in the United States. Meanwhile, India’s monthly textile exports range from $1.3-1.5 billion.
Industry experts predict that if even 10-11% of Bangladesh’s exports are diverted to Indian hubs like Tiruppur, India could gain an additional $300-400 million in business per month. KM Subramanian, president of the Tiruppur Exporters’ Association, expressed confidence in receiving increased orders, anticipating a 10% surge in business compared to the previous year.
Prabhu Damodaran, secretary of the Indian Texpreneurs Federation, echoed this sentiment, highlighting the potential for India to handle an additional $300-400 million in orders. He acknowledged the unfortunate situation in Bangladesh and the potential impact on buyer sentiment, stating that buyers are likely to shift some orders to India and other countries.
The protests and instability in Bangladesh come at a time when the country was projected to surpass $50 billion in annual exports in 2024, compared to approximately $47 billion in 2023.
The report further indicates that manufacturing units owned by Indian companies in Bangladesh are also considering relocating to India. Around 25% of Bangladesh’s textile units are owned by Indian entities, including prominent companies like Shahi Exports, House of Pearl Fashions, Jay Jay Mills, TCNS, Gokaldas Images, and Ambattur Clothing, according to trade-policy analyst S Chandrasekaran.
Chandrasekaran points out that the disruption in supply chains due to the political crisis is hindering the movement of consignments, particularly impacting the upcoming Christmas season. He emphasizes that India is well-positioned to benefit from the diversion of orders. He believes that the potential drop in global textile volumes could be compensated by a surge in Indian exports.
Bangladesh has been experiencing its most severe political crisis since its independence in 1971, culminating in Sheikh Hasina’s resignation as Prime Minister amidst widespread anti-government protests. On August 5, Bangladesh Army Chief General Waqar-uz-Zaman announced the formation of an interim government to assume responsibility.
