After several days of instability due to political changes, Bangladesh’s garment and footwear industry is back in full swing to supply products from old orders. Workers are also working overtime. Despite that, foreign buyers have temporarily suspended purchase orders from Bangladesh. And its influence has reached India as well. The country’s cotton exports to Bangladesh have started to decline.
This information is known from the report of the Indian media Indian Express. The media reported this information citing executives of the Indian made garment sector.
Rafiq Ahmed, chairman of Chennai-based Farida Group, said, “New orders are not coming from Western companies. Workers and management understand that production is the lifeline and are working overtime to complete orders. Some items are sourced from India to fulfill orders, even technicians are sourced.’
The chairman of the group, which invests in Bangladesh’s footwear industry, also said, ‘Most of the production activities are in Dhaka and Chittagong, which were relatively isolated from the protests. There was disruption in early August, but now normalcy is returning. As Bangladesh is a Least Developed Country (LDC), Westerners will soon start placing purchase orders from the country again due to the favorable tariff regime.
Confederation of Indian Textile Industry Secretary General Chandrima Chatterjee said, ‘Western companies are looking at India as an alternative. But much depends on the ability to deliver. At the moment there is a qualitative and quantitative difference between the offers of Indian and Bangladeshi products. He said that some purchase orders are also going to India. But the immediate impact on the entire issue has been negative as exports of some raw materials for the garment and footwear industries in Bangladesh have declined.
An executive in the Indian garment sector, who did not wish to be named, said that Western companies had been eyeing India even before the ongoing crisis in Bangladesh. Europeans are increasingly concerned about human rights issues in Bangladesh, so are looking to the Indian market.
He said, “Unrest in Bangladesh started some time ago, but the order was not transferred to India.” Most of them go to Cambodia, Vietnam and Indonesia. There is a lot of opportunity in India, but the quality position of our products is not changing and we are not benefiting from it.’
Bangladesh’s textile and apparel industry earns more than 80 percent of the country’s total export earnings and contributes 11 percent to the country’s GDP. According to data from S&P Global, Bangladesh’s $45 billion garment industry has suffered due to higher input costs, adverse weather conditions, along with weak power generation infrastructure since the start of the Russia-Ukraine war.
In early August, India’s finance minister Nirmala Sitharaman said the Indian apparel sector was facing “a bit of uncertainty” due to ongoing political events in neighboring Bangladesh. He expressed hope that Dhaka’s interim government would resolve the issues ‘sooner than later’.
