Bangladesh Slips To 6th Spot, Behind India In Garment Exports To US

Economy

Bangladesh Slips To 6th Spot, Behind India In Garment Exports To US

According to a recent report, India has overtaken Bangladesh in apparel exports to US and has pushed it down from the fourth slot to the sixth slot. Till a few months ago, Bangladesh was in the fourth spot. The data was supplied by the US department of Commerce.

The data at the site reflects a negative change of 6.51 percent for year ending September for Bangladesh in the apparel category whereas it shows a marginal 0.1 percent positive change for India in the apparel sector in terms of US dollars. Looking at percentage changes, it is evident that other countries too have benefited from Bangladesh’s domestic problems on the infrastructural front.

The key to this change in status quo is reportedly the Indian government’s decision to give a USD 894 million (INR 60 billion) stimulus package to the textile sector. This allied with the infrastructural problems faced by Bangladesh have accentuated its slipping two spots down.

It may be recalled that Bangladesh had the US garment market as its single largest destination for exports. However, the exports in the first quarter of the current fiscal year grew by a paltry 3.41 percent. Needless to say this had its exporters in anxiety as the country had targeted USD 50 billion exports by the end of 2020.

This report was augmented by inputs from Bangladesh’s Export Promotion Bureau which cited the figure for total quantum of exports for the first quarter as USD 1.36 billion. However, to put things in perspective, it’s not India alone who has gained. Other countries like Vietnam, Pakistan and Mexico too have gained significantly because of the shortcomings faced by the Bangladesh export segment.

According to leading garment exporters from Bangladesh, “We are facing steep challenges because of the inadequacy of infrastructure. This results in our inability to deliver goods to the markets in good time. Consequently, other countries have gained.”

The market observers gave credit to the Indian government to facilitate this coup. Firstly, the government gave a stimulus package to the textile industry aimed at the exporters. Secondly, the rupee got devalued. “With these two factors working in favor of India, the Indian government has ensured that the price difference between Bangladesh and India for most apparel items is almost negligible. This has in fact countered the high cost of labor in India as compared to Bangladesh,” the observers pointed out.

The good news for India is that globally retailers have begun placing high volume orders for apparels sourced from here.