Despite an increase in Indian imports, Bangladesh’s exports to India have decreased over the eight months ending in February, primarily due to a decline in garment exports.
Bangladesh exported US $ 127 crore worth of goods between July 2023 and February 2024, down 16.5 per cent from US $ 153 crore during the same period in 2022–2023 (statistics from the Export Promotion Bureau).
On the other hand, official numbers from New Delhi show that over the seven months from July 2023 to January 2024, Indian imports worth US $ 538 crore entered Bangladeshi markets, an increase of 9 per cent over the previous identical period.
The decline in Bangladeshi apparel exports to India, the country’s efforts to build up its own domestic apparel manufacturing sector, and the slowdown in international trade activities brought on by the Red Sea shipping attacks and other geopolitical crises are all contributing factors to the widening trade deficit.
Top Bangladeshi exports to India include: ready-made garments, jute products, home textile items, soybean oil, frozen fish, plastics etc. Among these, the garments sector has the highest share.
Bangladesh’s garment exports nearly doubled in the space of two years to cross the US $ 100 crore mark in the fiscal year ending June 2023. That had raised hopes that India would become a promising market for Bangladeshi garments alongside Western countries.
However, even as, US $ 75 crore in garments were exported to India in the first eight months of fiscal year 2023 (July 2022-February 2023), the figure has fallen to US $ 58 crore in the corresponding period of the ongoing fiscal year.
Bangladesh’s total exports to India crossed the desired US $ 200 crore threshold for the first time in the fiscal year 2023. Shipments of apparel mostly drove the export momentum.
However, it seems that the industry has slowed down and may perhaps have lost market share in India. According to a senior representative of the Bangladesh Garment Manufacturers and Exporters Association, efforts by India to become self-sufficient may play a significant role in the slowdown, albeit the exact cause is still unknown.
Bangladeshi garment exports would soon pick up pace in India, but hover around the US $ 100 crore mark recorded in the previous fiscal year.
The slowdown in Bangladeshi exports to many other countries in July 2023-February 2024, and India’s reduced import from countries apart from Bangladesh, also played roles in driving down Bangladeshi exports to its giant South Asian neighbour, experts opine.
The country’s ongoing dollar crisis has made it more difficult for local companies to purchase raw materials and develop goods for export.
