Bangladesh situation poses concerns for Indian textile sector: CITI

Supply Disruption and Short-Term Impacts

In the short term, supply disruptions are expected due to the prevailing situation in Bangladesh. Indian companies with manufacturing operations in the country are likely to face challenges in maintaining their production flow, leading to delays and potential shortages in the market. This disruption could affect the availability of products and might force companies to seek alternative.

Impact on Global Brands

Several major global brands that rely on Bangladesh for their sourcing needs will also be affected by these disruptions. Brands with significant portions of their supply chain rooted in Bangladesh may experience delays and a decrease in the availability of their products. This, in turn, could lead to a ripple effect across the global retail market, affecting inventory levels and sales, CITI said in a statement.

Importance of Bangladesh to Indian Textiles

Bangladesh is a crucial market for Indian textiles, serving as both a manufacturing hub and a significant export destination. The Indian industry is deeply concerned about the current events and hopes for the swift restoration of normalcy. Stability in Bangladesh is vital for maintaining the smooth operation of cross-border trade and production.

Shift to Alternative Manufacturing Hubs

Amid the uncertainties in Bangladesh, there is already a noticeable shift towards alternative manufacturing hubs such as a strategic move by companies to diversify their production bases and reduce dependency on a single market. Tiruppur, known for its robust textile and apparel manufacturing capabilities, may be a key beneficiary of this shift.

Increased Sourcing from India

As global garment brands face disruptions in Bangladesh, there is an expected increase in sourcing from India. Indian manufacturers are expected to see a rise in orders as brands seek to mitigate risks and ensure continuity in their supply chains.

Chandrima Chatterjee, secretary general of CITI, said: "The situation in Bangladesh is indeed concerning, and we are closely monitoring the developments. Bangladesh’s growth in textile sector has been inspiring and has lent strength to the trade flows in the entire subcontinent. While we are concerned about the impact on the supply chain and the potential delays and disruptions it might cause, we are hopeful that the situation will improve soon. We extend our solidarity and support to them."

Fibre2Fashion News Desk (KD)