India eating into RMG exports share of Bangladesh: CareEdge Ratings

Apart from the impact of socio-political upheavals in Bangladesh, this was also aided by various initiatives to enhance the competitiveness of Indian RMG exports, the Indian rating agency noted.

The socio-political uncertainties prevailing in Bangladesh may result in global RMG brands and retailers with a significant presence in Bangladesh diversifying their sourcing for meeting their delivery schedules, especially if the crisis persists for more than a quarter or two, it said in a release.

In such a situation, India is expected to gain around 6-8 per cent and 10 per cent of Bangladesh’s monthly export orders in the near term and medium term respectively, translating into monthly incremental export opportunity of around $200-250 million in the near-term and $300-350 million in the medium-term, it said.

India has enough headroom to increase RMG exports by 20-25 per cent given the available capacities in the sector.

With the China+1 sourcing strategy already in the works, global RMG brands and retailers have limited alternatives such as India, Vietnam and Cambodia to replace Bangladesh, and India is in a prime position to capitalise on the opportunity, it said.

Bangladesh’s RMG exports registered a 17-per cent de-growth in Q1 FY25 on a year-on-year (YoY) basis, while Indian RMG exports have grown by 4 per cent during the same period.

Fibre2Fashion News Desk (DS)