Impact of Bangladesh Stalemate on Indian Garment Industry Benefits

Both India and Bangladesh are significant players in the global ready-made garment (RMG) market, but currency fluctuations in the Bangladeshi Taka and on-going supply chain disruptions have shifted the advantage toward Indian manufacturers.

The recent regime change and uncertainties in the trade landscape in Bangladesh have had a negative impact on several industries in India. However, the ready-made garments sector in India has notably benefited from the unstable economic and political situation in Bangladesh, which is one of the world’s most established garment exporters.

Both India and Bangladesh are significant players in the global ready-made garment (RMG) market, but currency fluctuations in the Bangladeshi Taka and on-going supply chain disruptions have shifted the advantage toward Indian manufacturers. Traditionally, Bangladesh has been one of the largest exporters of ready-made garments, accounting for around 6-7 per cent of the global market share, due to its cost-effective production and established relationships with major brands. In contrast, India’s share is approximately 3-5 per cent.

Until the previous year, Bangladesh exported ready-made garments valued at around $40 billion annually, making it one of the largest garment exporters worldwide. In comparison, India’s annual exports are about $16-18 billion, according to the latest industry data. However, this trend is expected to change significantly in the coming years.

The current stagnation in Bangladesh’s garment exports arises from several interrelated factors, including supply chain issues, currency volatility, and rising production costs. Economic slowdowns in major markets such as the US and EU have also contributed to decreased consumer spending on apparel, adversely affecting demand for Bangladeshi exports.

Furthermore, rising raw material and labour costs have tightened profit margins for Bangladeshi manufacturers, posing challenges in competing with other low-cost producing countries. On-going disruptions caused by the COVID-19 pandemic and geopolitical tensions have led to delays and increased costs in sourcing materials and shipping products.

Additionally, the growing consumer demand for sustainable and ethically produced garments necessitates significant investment in eco-friendly practices, which many manufacturers in politically unstable Bangladesh struggle to implement.

Traditional challenges, including compliance issues, market saturation, and limited diversification, have long affected the industry in Bangladesh. While its cost competitiveness—supported by low labour costs—has made it attractive to international buyers, the country now faces increased competition.

Conversely, India’s strengths lie in its diverse product offerings and expanding manufacturing capabilities. Major exporters such as Arvind, Page Industries, Vardhman Textiles, Texport Industries, Shahi Exports, Gokaldas Exports, and KPR Mill are recognised for their high-quality products and robust export capabilities, serving global markets.