NEW DELHI: Indian garment export is reaping the benefits of unrest in neighbouring Bangladesh. Garments exports from India in the first six months of the current financial year have registered an 8.5% increase compared to a 15% decline in the same period the year before. In September alone, India recorded a 17.3% year-on-year increase in apparel exports.
The disruption caused by the political turmoil in Bangladesh has resulted in a fall in exports from the country, a hub for textile supply across the globe. Bangladesh’s apparel exports to the US, its largest export destination, fell 11% to $3.40 billion in January-June 2024 as against $3.82 billion in the same period in 2023. Indian exporters seem to be benefiting from this disruption.
Sabu Jacob, MD of Kerala-based Kitex Garments, recently said unrest in Bangladesh has contributed to financial growth of not only the company but the entire garment industry in India. Kitex Garments has reported its highest-ever turnover and profitability. Net profit of the Kochi-based company, a manufacturer of infant garments, reached Rs 39.94 crore in Q2FY25, nearly tripling from Rs 13.21 crore in the corresponding period of the previous fiscal.
Bengaluru-based Gokaldas Exports in its June quarter investors’ presentation has cited the internal strife in Bangladesh as a long-term opportunity for the Indian garment industry. “Buyers seeking alternate production bases outside China, creating opportunities for major Asian suppliers like India. Bangladesh is impacted by internal issues and Vietnam by high factor costs,” it said in its investor presentation.
As per Ajay Sahai, director general and CEO of Federation of Indian Export Organisations (FIEO), India’s garment export sector has seen notable growth recently, benefiting from the political instability in Bangladesh, as a result many buyers have shifted to Indian manufacturers to meet demand, especially for time-sensitive orders.
“We expect that India could see a long-term increase of 10-20% in apparel export orders, potentially translating into an additional $2-3 billion annually. This shift is expected to benefit India’s established garment hubs,” added Sahai. As per Ajay Srivastava, founder, Global Trade Research Initiatives (GTRI), international buyers have talked about moving 10-15% of their orders from Bangladesh to India, potentially adding $300-400 million in monthly business for India.