Textile sector is a perfect marriage between India & Bangladesh
10 February 2023, Mumbai
Interactive Session with BGMEA, Delegation in India conducted on 09-02-2023 in Delhi where the atmosphere was electric and it was a broad-based representation of BGMEA, Bangladesh with a formidable group of who is who of brilliant minds with captains of the trade from both sides on & off the dais including Faruque Hassan, President-BGMEA, Rajib Islam, Allue sourcing, Shovan Islam Sparrow group & Gaurang Bhagat, President Maskati cloth Market Association, Prashant Mohota, MD of GIMATEX amongst few others leading to ground-breaking deliberations sharing trade insights & vision in free-wheeling interaction revealing the secrets of cross border relationship between two natural allies.
The BGMEA strongly maintains that the textile industry's resilience has led to taking it to level next/elevated levels in the global textile economy.
Secret sauce
Context setting; As per BGMEA the coveted sector brings in a lot of, precious export dollars to the nation building its economy, employment generator, and wage earners and all is happening on the back of the government's enduring efforts together with worthy valuable international development partners, humble productive labour force, an undying spirit of entrepreneurship.
We are currently exporting about $42-$43 billion worth of garments. Many classical examples are there when the trade was in its infancy a few decades ago and, many had plunged into an ocean of global textile/apparel industry without even knowing how many crocodiles exist in it, putting their skin in the game helped us grow unprecedently, working very closely with all the stakeholders is a key enabler besides, the tag of LDC support especially in the European Union because of duty access is a game changer.
Graduating LDC Status; By the year 2026, Bangladesh will be losing the tag of LDC but still, it will keep enjoying privileges for say next three years in the transition phase.
Green initiatives
As per reliable trade estimates Bangladesh is home to some 157 Green garments Factories including 47 Platinum, 96 gold, 10 silver, and 4 Leed certified.
Whilst it is "Work-in-Progress" as some in excess of 500 factories are said to be under certification where serious efforts are underway.
Needless to underscore here, 'Green construct' let us say A LEED-certified factory building enables lesser unforeseen industrial mishaps and, is any day much more energy-efficient than conventional building structures also comes with inherent advantages offering businesses save money (saving is earning in some sense), augmenting workforce productivity/efficiencies. Besides unequivocally giving a distinct impetus to a firm's economic prospects/financial value, which is a classical case of demonstrability and serious commitment going down the path to sustainability.
Again, these initiatives meaningfully bring onboard features e.g. raising the entity's industrial image, addressing critical issues like workplace safety, and so forth.
And there's a lot of cooperation, and opportunity is real. Because Bangladesh garments manufacturing unless you see it, you want to quite comprehend how the sector has grown and the type of growth hunger it has demonstrated through decades always eager to innovate, pushing limits focusing on green and sustainable production processes are now most of the stakeholders are working more proactively in environment friendly and we always back our words with action.
And we are now working more proactively in environment-friendly fashion. The industry is working on energy-efficient, recycling renewable energy, and thinking big by keeping buyers' interests in mind and standing by their sides whenever markets are tough. As per BGMEA spokesman," It is a big challenge today for us to make our industry safe and sustainable & will work for the factory safety area, the compliance area more seriously in the coming seasons.
It's not only the green factory, it's the capability, it's the magnitude of the factories that really will open up new vistas helping cut a lot of ice.
Indian Garment Import From Bangladesh: An Overview
India's garment imports totaled $ 777.35 million in the first nine months of 2022, up 25% year on year (Y-o-Y).
Reacting to this BGMEA, President very firmly iterated that vis-à-vis a ballpark import figure of around 7 Bn$ as an Indian export to Bangladesh of our existing around 42-43Bn US$ market size where our industry runs a big deficit. This is quite sanguine to assume/there is merit in assuming our apparel exports to India are an inherent part of the healthy give and take meaningful sustainable relationship.
The role of India and Bangladesh collaboration
It's a great market for India. Because if you see the entire exile value chain, India is very heavily invested in the upstream CAPEX-intensive industries of cotton spinning and weaving say many trade observers.
And on the other hand, Bangladesh is very heavily invested in skill-intensive industries of garment manufacturing and a lot of processing as well. The industry today is big for China cotton buyers because of Indian cotton restrictions/sourcing scarcity out of India which only encourages industry in the given direction besides trade nuanced dynamics.
According to BGMEA spokesman," For cotton-based apparel/garments, we need raw cotton. Of our total requirement. We don't produce even 2%. So we are completely dependent on India and other cotton-exporting nations".
So it's a perfect fit as per Gaurang Bhagat, President of Maskati cloth Market Association," As we have the batsman, Bangladesh has the bowler. So if you make a cricket team, I think it makes a perfect eleven and is like a perfect marriage wherein we will complement each other, not as competitors".
BGMEA president also iterated," I think in the coming days, we have more opportunities to work together. And we hope each other will work together.
It's an opportunity for us because we are looking at reducing reliance on China to bank on alternative destinations and India is one of them being a country right next to us.
Indian textile skilled professionals contribute remarkably to the Bangladesh growth story. Synthetics or MMF which is mostly petrochemical again India has a lot to offer here. As cannot produce even 10% of the MMF requirement in our country. So we are looking forward to importing from India the manmade fiber as well as the other types of fabric.
Where we lack; Another missing piece in our textile puzzle and, that too helps India, as we don't have anything homegrown here right now in areas like textile machinery where India is on a strong wicket".
Prognosis
If you look at how the industry is poised today as the sector is likely to grow leaps and bounds, it is quite possible as claimed by a range of BGMEA members, "We have targeted and done the arithmetic in a very calculating way taking only 10-11 percent growth, though we have a growth of 18% so far. And today with exports already worth $42 billion we are in a good place to touch a hundred billion dollars likely to be Inshallah! by 2030".
As a quick trade estimate a quarterback has mentioned that, against our $42 billion net exports, imports from India are about $4.5 billion. Additionally, the sector buys a lot of other chemicals including chemicals, varied types of machinery, accessories, and buying software, etc. As a ballpark figure altogether, out of $15 billion in texture-related imports from India last year, it is believed import was almost about $7 billion.
BGMEA's conservative estimate is," Going forward, India will be around $15 to $20 billion, just only on textiles in our 100 Bn$ growth story. And on top of that, we have a lot of other byproducts that we also need for the apparel/garment sector, exports oriented garment sector.
So India could be our best sourcing partner given the improving facilitation of trade between the two countries. As you know, we used to buy mostly from China earlier and India is our next-door neighbor.
Indian suppliers are well advised to compete & consider our China price because we are importing now from China and so was earlier. And we are willing to onboard India as that is meaningful for both of our countries or sectors" alluded Faruque Hassan, President-BGMEA.
