Bangladesh Crisis Presents Indian RMG Sector With $250 Million Monthly Export Opportunity: Report The socio-political uncertainties prevailing in Bangladesh may result in global RMG (readymade garment) brands and retailers in India to gain around 6-8 per cent of Bangladesh's monthly export orders

By Entrepreneur Staff

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In recent years, countries such as Bangladesh and Vietnam have captured a large part of China's declining share in the global readymade garment (RMG) exports. India fell short to capitalise in this market gap, however, the recent political upheavals and social unrest in Bangladesh, present an opportunity for the Indian RMG sector. If the political crisis is prolonged, Indian RMG sector could potentially capture around 10 per cent of Bangladesh's RMG export orders and generate monthly export opportunities of around $200-250 million in the near term and $300-350 million in the medium term, as per report from CareEdge Ratings.

India is poised to reap significant benefits from the China+1 sourcing strategy, crediting its comprehensive presence across the textile value chain, spanning from fibre production to garment manufacturing. Unlike Bangladesh, which relies heavily on importing yarn and fabric, India is self-sufficient in textile production. Furthermore, the socio-political uncertainties in Bangladesh may lead to a shift of 6-8 per cent of their monthly export orders to Indian manufacturers, as global brands and retailers seek more stable partners. With ample capacity to expand, India's RMG exports are expected to grow by 20-25 per cent in the near future, capitalising on this unforeseen opportunity.

As per the report, Bangladesh's RMG exports have registered a 17 per cent de-growth in Q1FY25 on a year-over-year (YoY) basis while Indian RMG exports have grown by 4 per cent during the same period. "RMG manufacturing is an asset-light albeit labour-intensive operation. It largely requires a skilled and trained workforce. The recent budget announcement on the Skilling Programme and Upgradation of Industrial Training Institutes apart from PLI benefit for the sector and potential FTAs with UK and EU, shall augur well for creation of incremental capacities in India given the export opportunities," said Krunal Modi, director at CareEdge Ratings.

The bane from Bangladesh

Bangladesh ranks as India's 25th largest trading partner, with bilateral trade valued at a substantial $12.9 billion. The crisis in the country is severely impacting fast-moving consumer goods (FMCG) companies in India. For instance, Marico, a prominent player known for its Saffola edible oil, has seen its shares drop by over 5.5 per cent in the past week. With 11-12 per cent of its revenue coming from Bangladesh, the company is significantly exposed to the unrest. Read more

Entrepreneur Staff

Entrepreneur Staff

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