The ongoing political crisis in Bangladesh is sending ripples through its vital textile industry. As the situation intensifies, international buyers are looking for safer alternatives. This shift could bring unexpected benefits to India’s textile sector.
Impact on Bangladesh’s Exports
Bangladesh’s textile industry is a powerhouse, exporting $3.5-3.8 billion worth of apparel monthly. It holds a strong position in European and UK markets, along with a 10% share in the US. The country was on track to surpass $50 billion in annual exports by 2024, up from $47 billion in 2023. However, the current unrest threatens these projections.
India’s Potential Gain
Experts believe India could see a significant boost in textile orders. K M Subramanian, president of the Tiruppur Exporters’ Association, expects orders to Tiruppur to increase by at least 10% this financial year. If 10-11% of Bangladesh’s exports shift to India, it could mean an additional $300-400 million in monthly business.
Prabhu Damodaran, secretary of the Indian Texpreneurs Federation, confirms India’s readiness to handle this influx of orders. He notes that India currently exports $1.3-1.5 billion worth of textiles monthly and has the capacity to take on the extra demand immediately.
Shifting Manufacturing Base
The crisis may also prompt Indian-owned manufacturing units in Bangladesh to relocate to India. Trade policy analyst S Chandrasekaran points out that about 25% of units in Bangladesh are Indian-owned. Companies like Shahi Exports, House of Pearl Fashions, and Gokaldas Images might consider moving their operations.
Supply Chain Disruptions
The unrest has already caused significant supply chain disruptions, particularly affecting shipments for the upcoming Christmas season. This breakdown gives India a timely advantage as orders are likely to be diverted to meet seasonal demand.
While the situation in Bangladesh is unfortunate, it presents an opportunity for India’s textile sector to step up and fill the gap in the global market. As the crisis unfolds, Indian exporters are poised to capitalise on this unexpected turn of events.