• Linkdin
Discover the future of apparel trade with our latest report, Global Apparel Sourcing Market Trends and Patterns! Request Report down-aerrow Discover the future of apparel trade with our latest report, Global Apparel Sourcing Market Trends and Patterns! Request Report down-aerrow
         Discover the future of apparel trade with our latest report, Global Apparel Sourcing Market Trends and Patterns! Request Report down-aerrow Discover the future of apparel trade with our latest report, Global Apparel Sourcing Market Trends and Patterns! Request Report down-aerrow

Impact of Bangladesh crisis on India's trade, economy trivial: Acuité

10 Aug '24
2 min read
Impact of Bangladesh crisis on India's trade, economy trivial: Acuité
Pic: Adobe Stock

Insights

  • India's exports to Bangladesh are likely to be adversely hit in the short term due to the political crisis in the latter, Acuité Ratings & Research said.
  • But the overall impact on India's trade and economy may not be significant, it noted.
  • Imports are also likely to be disrupted in the near term, affecting the supply chain of some Indian textile firms.
India’s exports to Bangladesh are likely to be adversely affected in the short term because of the latest political crisis in the latter, and this may moderately hit the former’s merchandise exports, according to credit rating agency Acuité Ratings & Research.

Imports are also likely to be disrupted in the near term, affecting the supply chain of some Indian companies in the textile sector, the agency noted.

Bangladesh has also been a consumer market for some Indian fast moving consumer goods manufacturers and some slowdown can be expected in that arena as well, it noted.

India had a healthy trade surplus with Bangladesh in the last fiscal (FY24), with significant exports of cotton yarn, agricultural items, engineering goods and chemicals.

But the overall impact on India’s trade and economy is not likely to be significant as trade with Bangladesh (merchandise exports and imports) comprise only 1.2 per cent of India’s aggregate trade volumes.

Bangladesh is a major market for Indian yarn, accounting for 25-30 per cent of the total yarn exports. If the crisis persists for a longer period, such exports, which stood at $1.3 billion in FY24, may be affected, the agency said in a release. This may translate to lower realizations and margins in the export markets.

On the other hand, the crisis presents opportunities for Indian fabric and garment manufacturers to raise their export market share.

The primary markets for Bangladesh textiles goods are the European Union, the United States, Canada, Australia and Japan. There can be a potential 15-20 per cent decline in garment exports for the next summer season (January-March 2025) due to recent disruptions and factory shutdowns. This can be both a short and a longer term opportunity for Indian garment exporters if the crisis doesn’t dissipate in a short period, Acuité Ratings noted.

Bangladesh may experience a severe shortage of foreign exchange, which hampers its ability to pay for imports. Indian exporters may face payment delays and challenges in receiving payments for their goods, it said. This financial strain can further disrupt trade relationships and lead to a decline in exports.

Political unrest often leads to heightened security measures at borders, which can slow down the movement of goods and increase trade costs. This can affect both imports from and exports to Bangladesh, potentially making Indian products less competitive, it added.

Fibre2Fashion News Desk (DS)

Leave your Comments

Esteemed Clients

Woolmark Services India Pvt. Ltd.
Weitmann & Konrad GmbH & Co. KG
VNU Exhibitions Asia
USTER
UBM China (Shanghai)
Tuyap Tum Fuarcilik Yapim A.S.
TÜYAP IHTISAS FUARLARI A.S.
Tradewind International Servicing
Thermore (Far East) Ltd.
The LYCRA Company Singapore  Pte. Ltd
Thai Trade Center
Thai Acrylic Fibre Company Limited
X
Advanced Search