Bangladesh Crisis: Potential Shift in Garment Orders to India

Sub: Eco

Sec: Fiscal Policy

Impact on Indian Textile and Apparel Sector:
- The ongoing crisis in Bangladesh is expected to impact the Indian textile and apparel sector in the short term.
Statistics:
- India exported $1.7 billion worth of cotton, cotton yarn, and fabrics to Bangladesh last fiscal, accounting for 17% of India’s cotton textile exports.
- Bangladesh exported $1 billion worth of cotton garments in FY23.
- Bangladesh exports $3.8 billion worth of garments monthly, compared to $1.3 billion by India.
Current Situation:
- Reports indicate trucks stranded on either side of the border with textile and garment goods.
- Nearly 30 Indian textile companies have facilities in Bangladesh.
Short-term Shifts in Orders:
- According to the Apparel Export Promotion Council, it is likely that garment orders may shift to India in the short term.
- The Indian apparel industry may be asked to fill the gap caused by the disruption in Bangladesh.
Factories Reopening in Bangladesh:
- Factories in Bangladesh have been asked to reopen next week.
- While Indian garment units may gain in the short term, normalcy should return to Bangladesh as it is a significant buyer of Indian yarn and fabrics.
Concerns and Hopes:
- The Confederation of Indian Textile Industry expressed concerns about the impact on the supply chain and potential delays and disruptions and are hopeful that the situation will improve soon.