Challenges in India-Bangladesh Cotton Trade 2024

Introduction

India’s cotton export industry is facing significant challenges as the demand from Bangladesh’s garment sector declines. This downturn is primarily due to a reduction in orders from Western garment companies, which has had a ripple effect on the Indian textile industry.

Decline in Western Orders

The Bangladeshi garment industry, which accounts for over 80% of the country’s total export earnings, has been hit hard by a decrease in orders from Western companies¹. This decline is attributed to several factors, including political instability and human rights concerns in Bangladesh⁴.

Impact on Indian Cotton Exports

As a major supplier of raw materials to Bangladesh, India has felt the impact of this decline. Indian cotton exports to Bangladesh have begun to decrease, affecting the overall textile trade between the two countries⁴. Industry executives have noted that while there are fresh inquiries for garments from India, the immediate impact has been negative⁵.

Efforts to Mitigate the Impact

Despite the challenges, both countries are taking steps to mitigate the impact. In Bangladesh, production units are working overtime to clear backlogged orders, and some items are being sourced from India to fulfill these orders⁴. Additionally, Indian technicians are being brought in to support the production process⁴.

Future Prospects

Looking ahead, there is cautious optimism that Western orders will resume once the situation stabilizes in Bangladesh. The favorable duty climate due to Bangladesh’s status as a least developed country (LDC) is expected to attract Western companies back⁴. However, much depends on the capacity of both countries to meet the qualitative and quantitative demands of the market⁴.

Conclusion

The decline in Western garment orders has created a challenging environment for both the Bangladeshi and Indian textile industries. While immediate impacts are negative, ongoing efforts and future prospects offer a glimmer of hope for recovery and growth.

Would you like more detailed information on any specific aspect of this topic?

Source:
(1) India’s cotton exports to Bangladesh hit as Dhaka’s Western garment …. https://www.tbsnews.net/world/south-asia/indias-cotton-exports-bangladesh-hit-dhakas-western-garment-orders-dry-929696.
(2) Cotton exports to Bangladesh hit as Dhaka’s Western garment orders dry up. https://indianexpress.com/article/business/economy/cotton-exports-to-bangladesh-hit-as-dhakas-western-garment-orders-dry-up-9542291/.
(3) Cotton Textile exports to Bangladesh hit as Western garment orders dry up. https://globaltextilesource.com/news/cotton-textile-exports-to-bangladesh-hit-as-western-garment-orders-dry-up.
(4) Bangladesh garment industry short on cotton as floods worsen protest backlog. https://www.msn.com/en-gb/news/world/bangladesh-garment-industry-short-on-cotton-as-floods-worsen-protest-backlog/ar-AA1pHKDi.
(5) Festive demand, Bangladesh crisis and China1 to boost India’s textile sector in 2nd half of FY25. https://www.malaysiasun.com/news/274534028/festive-demand-bangladesh-crisis-and-china1-to-boost-india-textile-sector-in-2nd-half-of-fy25.