
Industrialists from Ludhiana want the World Trade Organisation (WTO) to immediately remove Bangladesh’s status as a least developed country. They claim that the neighbouring country has already benefited from the WTO’s provisions, which have increased exports to Europe and other nations and drawn sourcing for global brands.
However, the benefits to the bordering countries have had a significant influence on Indian industry, especially the clothing, garment, and hosiery sector in Ludhiana, which has caused many to close and many more to nearly collapse.
In 2006, the WTO granted Bangladesh Least Developed Country (LDC) status for 20 years, providing key benefits like zero import duties on garments to markets such as the UK and Europe. This included duty-free and quota-free (DFQF) access, boosting Bangladesh’s textile sector. Additionally, the country gained flexibility in tariff adjustments and the ability to maintain higher import duties, further supporting its growing manufacturing industry.
The Ludhiana industry had hoped that the LDC subsidies to Bangladesh would stop, but the World Trade Organisation extended them by a “three-year additional transition period,” meaning that the benefits will last until 2029.
As a result of the cost savings and tariff benefits, some international brands moved their sourcing from Ludhiana to Bangladesh. Many variables, including cheaper labour costs, contribute to Bangladesh’s lower production costs. However, the industry in Ludhiana has suffered greatly as a result of all these problems.
Badish Jindal, president of the World MSME Forum, stated that while Bangladesh has benefited from its LDC status, the decline of the Ludhiana industry due to competition from Bangladesh and similar advantages given to Pakistan is severely impacting profitability. He argued that the WTO should revoke Bangladesh’s LDC provisions, as the country’s economy is performing well now.