Riding on the zero duty trade benefit and competitive prices, Bangladesh’s shipment of apparel items to India is growing fast, a development that would help Bangladesh narrow its trade gap with the neighbouring country.
Bangladesh is already a very lucrative source for formal shirts, tops, denim trousers, undergarments, polo shirts, t-shirts and bottomwear. Bangladesh shipped garment items worth US$ 365.95 million in the July-December period of the current fiscal year, up 58.07% from the US$ 231.53 million recorded in the same period a year ago, according to data from the Export Promotion Bureau.
Of the receipts, US$ 161.69 million came from knitwear shipments, up 66.46% year-on-year. Woven garment shipments surged 52% to US$ 204.26 million at the same time. Exporters say the demand for Bangladeshi garment items is rising in India because of the expanding middle-income groups in the world’s second-most populous nation.
Many western clothing retailers and brands have outlets in India and they source apparel items from Bangladesh to sell in the Indian market. What is more, local clothing retail outlets and brands have sprung up to serve the readymade garment market. They also buy apparel items from Bangladesh. Some Indian garment exporters re-export Bangladeshi garment items to other countries as well.
Many Dubai-based garment importers place orders with Indian manufacturers who buy products from Bangladesh due to the vast difference in cost of production.
Bangladesh’s Classic Fashions Ltd sends nearly US$ 3 million worth of garments to a Dubai-based company through Indian exporters. Md Shahidullah Azim, managing director of the company, says a lot of Indian businessmen are placing a good number of orders in Bangladesh to re-export to other countries. “This is one of the major reasons for the increasing garment exports to India.”
Ananta Group, another exporter, sells US$ 10 million worth of garment items, mainly denim, ladies underwear, woven shirts and knitwear items in India every year, said its managing director Sharif Zahir.
Md Shahidul Islam, managing director of Rupa Knitwear (Pvt) Ltd, says he sends more than one lakh pieces of sweaters every year. “If the testing facility becomes smooth, garment exports to India will grow a lot.”
India’s domestic textile and apparel production is worth US$ 140 billion, including US$ 40 billion of textile and apparel exports, according to reports. This means the country could be a major destination for Bangladeshi garment producers, who have long been relying on the US and European markets to sell most of their products.
A good number of BGMEA members are expected to participate in a trade show for apparel items in Bangalore in June. Bangladesh, Myanmar and Vietnam will participate in the fair. The BGMEA will also send a business delegation to India in April to discuss business and investment in Bangladesh by Indian entrepreneurs.
However, a 12.50% countervailing duty on garment items acts as a major barrier for Bangladeshi producers in Indian markets, exporters say. Two-way trade between the two countries is heavily tilted towards India, which ships goods worth US$ 8 billion on average to Bangladesh.
Total merchandise exports to India from Bangladesh stood at US$ 1.06 billion in the July-December period of 2021-22. It was US$ 1.27 billion in the entire fiscal year of 2020-21 and US$ 1.09 billion in 2019-20.