Indian apparel industry stakeholders appear to have tasted some early incremental gains from the turmoil plaguing Bangladesh trade after the recent political upheaval that dethroned the government.
According to the latest data, India’s ready-made garment (RMG) exports, by value, in August surged 12% year on year, the highest monthly expansion in the fiscal year that began in April.
The higher growth was especially significant, as it had come in a challenging environment, squeezed by the persistent Red Sea crisis and increased logistics costs.
In contrast, Bangladesh’s export trade, which historically thrives on RMG verticals, seems to have slowed after the domestic crisis hit the business community badly.
According to available data, Chittagong Port has seen fewer export containers in the past two months, a sign that RMG exports were under stress, as global importers remained wary of shouldering the risk of unpredictable production schedules and delivery commitments from the political tension.
Bangladesh’s main cargo gateway saw containerised exports in September dip to 75,603 teu from 78,146 teu in August. However, import flow ticked up, to 117,402 teu from 114,708 teu, as origin points seem to have cleared some input goods order backlogs that had to be suspended earlier, data shows.
Back in India, there is a general view that local exporters – battling a slowdown in demand – must exploit the opportunities from potential trade shifts from Bangladesh, despite the inherent competitive challenges in the absence of duty-free access in major markets.
AEPC and other fellow representative bodies, supported by the government, have been trying to break into new target markets, with some results. Indian RMG exports to Japan, Korea, Australia, Mauritius and Norway recorded significant gains in fiscal Q1, according to industry data.
India’s overall merchandise exports took a hard beating in August, down 9% year on year, after a moderate fall in July, so any additional RMG demand becomes a boost for the country, especially as trade challenges heighten due to the tense West Asia situation.
