India missing out on the Bangladesh opportunity

Bangladesh, a major exporter of RMG, had exports worth over $50 billion, which is three times higher than India’s.

During his visit to the National Institute of Fashion Technology in Chennai, Giriraj Singh, Union Textile Minister, was asked if India was gaining market share in the ready-made garments (RMG) sector left vacant by Bangladesh due to the on-going social and political disturbances in the country. Bangladesh, a major exporter of RMG, had exports worth over $50 billion, which is three times higher than India’s.

The minister responded by downplaying the question, stating that he was not concerned with countries like Bangladesh or Vietnam. Instead, his focus was on boosting the Indian textile sector, both domestically and in exports, aiming to increase its value from $176 billion today to $350 billion by 2030.

He pointed out that while Bangladesh has 4.5 million workers in its textile industry, India employs a significantly larger workforce of 46 million.

The minister’s dismissal of the “Bangladesh opportunity” reflected India’s current inability to capitalise on this opportunity.

Lalit Thukral, President of Noida Apparel Export Cluster, explained that India lacked the fabric capacity to meet the demand of buyers traditionally sourcing from Bangladesh. He noted that all of India’s existing fabric capacity was fully booked, and the country struggled to fulfill both volume and delivery schedule requirements.

Sanjay K Jain, Chairman of ICC National Expert Committee on Textiles, added that India had managed to capture only a small portion of Bangladesh’s export markets.

Thukral highlighted that Bangladesh had a 12-14 per cent advantage over India due to free trade agreements and concessional import duties, being classified as a ‘least developed country.’ He projected that Bangladesh could double its garment exports to $50 billion in ten years, whereas India remained stagnant in the $14-16 billion range.

Thukral attributed India’s limited physical capacity to the predominance of MSMEs in the sector. He mentioned that while the Indian textile industry was worth Rs 160 trillion, large companies accounted for only Rs 400 billion, with the remainder being made up of MSMEs.

News courtesy: The Hindu Business Line