Bangladesh's apparel exports to India surge, raise concerns

22 March 2023, Mumbai 

The apparel industry is one of the largest & biggest employers in the garment industry with 70 jobs for every crore rupee invested in India, considering that the rise in imports from Bangladesh is assuming seriousness leading to a decline in domestic production, job losses/cuts, and falling revenues is worrisome.

The removal of the primary custom tax on garment imports from Bangladesh, according to the Confederation of Indian Textile Industry Ex-Chairman, Sanjay K Jain, is the crucial cause for the surge in imports.

Viewpoint

The Indian government has urged the industry to steadily improve competitiveness and quality by being more self-reliant to better compete with imports from Bangladesh to protect the interest of the local industry.

What gives heart to the system is gradual & conscious efforts to strengthen India's domestic garment industry are well underway as we have started to see Bangladesh's apparel exports to India continue to increase, posing serious challenges for the Indian market to better compete with imports.

BGMEA, the president had recently iterated in one of the industry forums that," There is merit in assuming our apparel exports to India are an inherent part of the healthy give and take the meaningful sustainable relationship".

For the longest time, the Clothing Manufacturers Association of India (CMAI) has also been raising concerns over Duty-Free Imports from Bangladesh. The Apparel Export Promotion Council (AEPC) clearly views the surge in Bangladesh's apparel imports as a serious potential threat to India's textile and apparel/clothing/RTW (T&A) industry. The council has consistently appealed to the government/authorities to take counter-measures to promote exports giving impetus to this sector and making them more competitive to take on the challenge of the day.

Shakehand

The surge in Bangladesh's garment exports to India is a significant development in the trade relations between the two neighboring countries. The high-quality and affordable clothing produced in Bangladesh has found favor with Indian consumers, leading to a 61% increase in imports to $753 million in the first eight months of the current fiscal year in FY '21 Bangladesh raising concerns for India's domestic garment manufacturing industry.

The government's focus on improving competitiveness and quality, as well as providing incentives to textile manufacturers and streamlining regulations, is expected to benefit the industry in the long run.

Imponderables; What is holding back business between the two countries are logistics issues such as un-fundamentally high transportation costs, inordinately long wait times at customs/ports, and patchy/inadequate infrastructure have literally disrupted cross-border business between India and Bangladesh, hampering economic growth and trade.

Growing Trade Ties Between Bangladesh and India

However, it is also important to note that the growing trade ties between Bangladesh and India are not limited to the garment sector. The two countries have been working to enhance their trade and investment relations across various sectors, including pharmaceuticals, agriculture, and energy.

As the two countries continue to deepen their economic ties, it is crucial for both sides to maintain a balance in their trade relations. While imports from Bangladesh may be beneficial for Indian consumers, it is essential to ensure that the domestic industry is not adversely affected. At the same time, Bangladesh needs to continue to focus on improving the quality of its products to maintain its competitive edge in the Indian market.

Both sides have shown keenness to start negotiations on a bilateral Comprehensive Economic Partnership Agreement (CEPA) in the latter part of the year underpinning newly identified sectors to consolidate & deepen their bilateral relations to expand bilateral trade and investment.

Synergies Between Bangladesh and India

In conclusion, the surge in Bangladesh's garment exports to India is a positive development for both countries, but it also poses challenges for the Indian garment industry. With the right policies and strategies in place, however, the Indian industry can remain competitive and continue to thrive in the face of this new competition.

In the words of one of the trade experts," India Bangladesh relationship is like a perfect marriage wherein we will complement each other, not as competitors". Again, BGMEA President Faruque Hassan has always stressed categorically that, "Ever-improving & engaging business interactions between apparel and textile exporters of Bangladesh and India are a positive development for two friendly nations".

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