Bangladesh in Crisis: A Path Forward for Indian Apparel?

— Kumar Duraisamy 

Joint Secretary 

Tiruppur Exporters Association 

Uncertainty in Bangladesh, will this be an opportunity for the Indian Apparel industry to grow its Global Share? 

This is the question that is being asked by many of my friends and particularly friends from the Media. 

30 Years back Bangladesh doesn’t have any great infrastructure to produce Fabric, they import fabric from Countries like India, China, Taiwan for their apparel Industry but as on date they have a build a huge empire with state of art infrastructure from Fibre to Fashion catering close to 9% of the global share.

Bangladesh’s 90% of foreign exchange comes out of Textile Exports and as they are holding the status of an underdeveloped nation they have been granted aid by developed economies. They have capitalised on the duty-free status with Europe which gave a tough time to Indian Apparel exports. Most of the leading retailers of Europe shifted their major volume of business to BD and at a stage, they have shifted the sourcing offices to Dhaka from India. 

BD’s Duty-Free status expired in 2023 and has been renewed till 2025. There is speculation that it may not be renewed further and another section claims that it will be further extended till 2029 under this circumstance major retailers and brands started eying on the Indian Apparel Industry, particularly the Knitwear category, as the price of Indian Knitted Garment and BD knitted garment is more or less at par even BD with a duty-free status and in few cases Indian prices are less than BD.

Bangladesh kept its USD value stable for the last 10 years and duty-free status has been extended with a condition that its currency value should match the global market which made them less competitive, secondly increase in wages and salary and other price factors, added to that some decrease in export incentives and grants made them no more a cheaper sourcing nation. Upcoming European legislation on Environment and society also keeps them far away whereas India is proactive in this area and highly prepared to adhere to the new legislation.

Today’s scenario at BD strengthen the decision for the reasons mentioned above of shifting reasonable production back to India. Apart from this increase of BD merchandise and fabric shipping into India since 2017 started declining since 6 months. Indian retailers and the Foreign companies operating in Indian retail also plans to increase their production locally foreseeing many issues. A friend of mine working with an International testing agency confirmed this as the testing numbers have increased in multi-folds.

My sincere appreciation is always due to Bangladesh as they have come a long way, sheer hard work and adhering to the day to day changes and demands made them what they are today, as an Indian more than a garment exporter I pray for them to get back to their normalcy at the earliest as we don’t want to build our growth on someone’s weakness we want to grow our business with our own strength and sincere hard-work. 

I will write on the situation of the Indian apparel industry.