The textile and chemical industries in Gujarat, which have substantial interests in the South Asian market, are under threat from the ongoing turmoil in Bangladesh. These industries are keeping a close eye on the events and preparing for any disruptions as they unfold. According to preliminary estimates, at least Rs. 1,000 crore worth of transactions have been impacted in Gujarat’s textile business.
These sectors are experiencing a renaissance, and the situation in Bangladesh may have a negative effect on them. The textile sector, which is mostly dependent on exports to Bangladesh, has already suffered. Bangladesh receives about 60 per cent of Gujarat’s exports of cotton yarn, and as a precaution, new shipments have been suspended.
About 100 containers, each weighing 20 tonnes, are stranded at Gujarat’s ports, awaiting clarity on when exports can resume. “Bangladesh is the biggest export market for Gujarat-based spinning industry with around 60 per cent share. There will be a significant impact on the industry. Currently, export is halted. We are closely observing the situation,” said Rahul Shah, co-chairman of the GCCI Textile Taskforce.
In the last week, yarn prices dropped by Rs. 8 per kg, to Rs. 242 per kg, indicating concerns about the industry’s capacity to sustain its export pace to Bangladesh. Long-term unrest in Bangladesh may encourage Indian clothing producers, but industry executives warn that this will have a negative immediate impact on yarn exports.
The chemical industry is also facing challenges. “Gujarat’s dyestuff manufacturers supply around 3,500 to 4,000 tonnes of dyes, mainly reactive dyes, to Bangladesh every month, accounting for approximately 15 per cent of the state’s dye exports. We are going to hold an urgent meeting of exporters to assess the situation and devise strategies to mitigate potential losses,” said Nilesh Damani, vice-president of the Gujarat Dyestuffs Manufacturers’ Association (GDMA).
Reactive dyes are a major export from Ahmedabad to Bangladesh for about 150 businesses. A speedy resolution to the situation and the restoration of regular commercial relations are what both industries are looking for. It is anticipated that executives in the industry will investigate backup strategies to reduce the effects on their companies, such as expanding into new export markets and finding alternate supply chains.
