Bangladesh update: Garment, Knitted sector is seeing some kind of uncertainty because of Bangladesh, says FM Sitharaman
Bangladesh's textile industry is a crucial component of its economy, contributing to 80% of its exports and constituting 15% of its GDP. India plays a vital role as an export partner, supplying 20%-25% of the yarn that Bangladesh imports for producing garments.
- Aug 10, 2024,
- Updated Aug 10, 2024 1:51 PM IST
Bangladesh unrest: Union Finance Minister Nirmala Sitharaman on Saturday said the current unrest in the neighboring Bangladesh has affected the garments and knitted sector in India. It is to be noted that Bangladesh has seen intense and violent demonstrations against the Sheikh Hasina government in the last three weeks that culminated in her resignation. An interim government under the leadership of Nobel Laureate Muhammad Yunus assumed control of the country's administration.
Talking about the current unrest in Bangladesh, FM Sitharaman said: "I would say at the stage that many and I've also had discussions and calls coming on the matter of our textile garment investments which are in Bangladesh, many of whom who come from Tamil Nadu. The investments went there in good faith and they did well having gone there. The exports from Bangladesh also increased and I know also because of the duty and quota liberal approach that we have towards low-income countries, they could even export to India and we were there for importing first. So particularly the garment and knitted fabric sector is seeing a bit of uncertainty because of that. I hope that the investments are all safe other than that at this stage, it's too early for me to see what kind of an impact this situation in Bangladesh will have on our economy."
"You've had the Prime minister's observations coming, a statement by the external EAM in the Parliament and the efforts that are being taken to ensure that our borders are safe. I hope that the interim government will settle things sooner rather than later so that both the people of Bangladesh and India can get back to normalcy," she added.
Bangladesh's textile industry is a crucial component of its economy, contributing to 80% of its exports and constituting 15% of its GDP. The nation predominantly exports textiles to the European Union, the United States, Canada, Australia, and Japan. India plays a vital role as an export partner, supplying 20%-25% of the yarn that Bangladesh imports for producing garments.
On Thursday, Sanjay Jain, chairman, Indian Chamber of Commerce, National Expert Committee on Textiles said India's garment industry could reap a 10-20% boost in export orders over the next 18 months due to the unrest in Bangladesh
"The domestic textile industry is in a wait-and-watch mode, but exporters say New Delhi needs to be ready for a potential trade diversion triggered by the political unrest in the eastern neighbour, one of the world's top garment exporters. "India can benefit from garment exports. We expect a 10-15% gain in the short to medium term on garment exports," said Sanjay Jain, chairman, Indian Chamber of Commerce, National Expert Committee on Textiles.
Many prominent international companies are currently considering relocating their sourcing operations following Bangladesh's expected transition from its least developed country status by the year 2027. This shift is anticipated to result in increased production costs for garment exports from Bangladesh. Additionally, the primary garment export hub in India, located in Tiruppur, Tamil Nadu, is projected to experience a boost in orders by approximately 10% in comparison to the previous year.
According to experts in the field, there is a projected increase of 10-20% in orders anticipated within the upcoming two years, particularly with the impending loss of Least Developed Country (LDC) status by Bangladesh in the year 2027.
They further emphasized that this presents a favourable moment to initiate the implementation of the PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme. This scheme is designed with the objective of establishing seven expansive textile parks across the nation.
PM MITRA is based om PM Narendra Modi's 5F vision of farm to fibre; fibre to factory; factory to fashion; and fashion to foreign.
Bangladesh unrest: Union Finance Minister Nirmala Sitharaman on Saturday said the current unrest in the neighboring Bangladesh has affected the garments and knitted sector in India. It is to be noted that Bangladesh has seen intense and violent demonstrations against the Sheikh Hasina government in the last three weeks that culminated in her resignation. An interim government under the leadership of Nobel Laureate Muhammad Yunus assumed control of the country's administration.
Talking about the current unrest in Bangladesh, FM Sitharaman said: "I would say at the stage that many and I've also had discussions and calls coming on the matter of our textile garment investments which are in Bangladesh, many of whom who come from Tamil Nadu. The investments went there in good faith and they did well having gone there. The exports from Bangladesh also increased and I know also because of the duty and quota liberal approach that we have towards low-income countries, they could even export to India and we were there for importing first. So particularly the garment and knitted fabric sector is seeing a bit of uncertainty because of that. I hope that the investments are all safe other than that at this stage, it's too early for me to see what kind of an impact this situation in Bangladesh will have on our economy."
"You've had the Prime minister's observations coming, a statement by the external EAM in the Parliament and the efforts that are being taken to ensure that our borders are safe. I hope that the interim government will settle things sooner rather than later so that both the people of Bangladesh and India can get back to normalcy," she added.
Bangladesh's textile industry is a crucial component of its economy, contributing to 80% of its exports and constituting 15% of its GDP. The nation predominantly exports textiles to the European Union, the United States, Canada, Australia, and Japan. India plays a vital role as an export partner, supplying 20%-25% of the yarn that Bangladesh imports for producing garments.
On Thursday, Sanjay Jain, chairman, Indian Chamber of Commerce, National Expert Committee on Textiles said India's garment industry could reap a 10-20% boost in export orders over the next 18 months due to the unrest in Bangladesh
"The domestic textile industry is in a wait-and-watch mode, but exporters say New Delhi needs to be ready for a potential trade diversion triggered by the political unrest in the eastern neighbour, one of the world's top garment exporters. "India can benefit from garment exports. We expect a 10-15% gain in the short to medium term on garment exports," said Sanjay Jain, chairman, Indian Chamber of Commerce, National Expert Committee on Textiles.
Many prominent international companies are currently considering relocating their sourcing operations following Bangladesh's expected transition from its least developed country status by the year 2027. This shift is anticipated to result in increased production costs for garment exports from Bangladesh. Additionally, the primary garment export hub in India, located in Tiruppur, Tamil Nadu, is projected to experience a boost in orders by approximately 10% in comparison to the previous year.
According to experts in the field, there is a projected increase of 10-20% in orders anticipated within the upcoming two years, particularly with the impending loss of Least Developed Country (LDC) status by Bangladesh in the year 2027.
They further emphasized that this presents a favourable moment to initiate the implementation of the PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme. This scheme is designed with the objective of establishing seven expansive textile parks across the nation.
PM MITRA is based om PM Narendra Modi's 5F vision of farm to fibre; fibre to factory; factory to fashion; and fashion to foreign.