Indian exporters eye gains as global garment brands shun Bangladesh

The political unrest in Bangladesh is turning into a financial bonanza for Indian textiles and garment industry. Billions of dollars in fresh orders from marquee buyers in the west are shifting to Indian textile companies.

Bangladesh is a garment sector powerhouse, having seen exports surge by 92 per cent to $47 billion in 2023. The country was the third largest exporter of clothes last year after China and the European Union (EU), and the sector accounts for over 80 per cent of the its total export earnings. India’s garment exports, in comparison are less than half the size at the sixth position.

However, the political upheaval in the country last month which saw deposed PM Sheikh Hasina flee to India, has global buyers nervous.

After years of docking in Bangladeshi hubs like Chittagong, these buyers have thrown anchor in India's garment markets, seeking fresh opportunities. Reports say that garment export hubs like Tiruppur in Tamil Nadu, Ludhiana in Punjab, Surat in Gujarat, Jaipur in Rajasthan and Noida in Uttar Pradesh have seen deals flow in worth hundreds of crores of rupees in the past few weeks. Companies from Germany, Netherlands, Poland and Spain are testing the waters in India and Vietnam, trying to hedge their bets.

The big beneficiaries of the shift are Indian garment exporters like Arvind Mills, KPR Mills, Jindal World Wide, Vardhman Textiles, Welspun Living, Raymond, Bombay Dyeing, Nitin Spinners and Indo Count Industries.

“Raymond has been receiving massive enquiries. We offer across the board price-points and end-to-end fabric-to-garment-to export capabilities,” Gautam Singhania said in a conversation with Business Today, adding, “we invested Rs 200 crore last year to increase our capacity, which has come online and is available for new orders”.

Singhania said India was in a unique position to benefit from the crisis in Bangladesh. “Bangladesh does not have a fabric supply. India has got a great opportunity to take advantage of this because we have the fabric base here. They only have a garmenting base," he added.

Indian exporters usually get their orders for the spring, fall season in December-January and for the Christmas and holiday season in June-July. The fresh, ‘unseasonal’ orders have been a bonus for the garments business. Reports say global brands have initiated social auditing at several factories and if they meet global standards, orders could accelerate in 2025.

The fresh developments have also renewed calls for an expedited free trade agreement with the EU. Bangladesh already has a deal in place and a trade deal at this politically sensitive juncture could boost the fortunes of Indian exporters.

Global buyers from Bangladesh are facing other hurdles as well. Flooding in several areas has forced garment production to fall by as much as 50 per cent. India has also restricted diesel supplies to Bangladesh following the unrest, adding to power shortages in the country and severely hitting factory operations.