The Indian textiles and apparel industry has been watching the political developments in neighbouring Bangladesh with keen interest. This interest is dual in nature. For one, India is Bangladesh's rival in readymade garments (RMG); at the same time, it is also a supplier to that country's apparel industry. But how both equations play out in the coming days is enmeshed in uncertainties.
Over the past week, there have been many reports indicating that Indian suppliers to garment makers in Bangladesh have already suffered losses. Many are having to grapple either with high-value consignments that are stranded at the Indo-Bangla border, or payments that are stuck for obvious reasons. In most cases it is a combination of all factors.
In the northern state of Punjab, whose share of yarn exports to Bangladesh is about one-third of India's, manufacturers are frantically waiting for the impasse to end. Amit Thapar, President of Ganga Acrowools Ltd, told the Tribune: "Goods worth more than ₹2 billion are stuck at the border and orders worth ₹10 billion will be immediately affected."
Bajrang Lal Sharma, member of the management committee of All-India Motor Transport Congress, told the same newspaper: “More than 700 trucks laden with yarn, chemical fabric and cycle parts are stranded on the Indian side of the border, while 1,300 trucks are stuck on the other side. Of these, roughly 200 were of Punjab-based exporters.” Border posts remain clogged with stranded vehicles.
In FY24, roughly 34.9% of India's raw cotton and cotton yarn exports (worth $2.4 billion) were to Bangladesh alone. About 200–250 containers of cotton yarn are exported to Bangladesh every month. This has come to a grinding halt, and is likely to remain affected for months to come.
Ripple Patel, Managing Director of Fiotex Cotspin Private Limited, told the Financial Express, “The industry is worried about the uncertainty around the fate of the containers on the way to Bangladesh and the orders in the pipeline. After this development, the yarn industry will face tremendous heat as the spinning units are already making losses due to muted global demand because of the ongoing geo-political crisis in Europe and Middle East.”
But not everyone exports yarn or fabrics to Bangladesh, which is also a big buyer of Indian sarees. A considerable volume of the saree trade originates from the textile city of Surat in Gujarat state. Saree manufacturers here have halted the supply of products to Bangladesh. The city exports ₹1 billion worth of textile products and yarn to Bangladesh every month.
“The city’s businesses have not received orders from exporters in Kolkata for the past month. Earlier, sarees and dress material were major products along with fabric and yarn,” Vijay Mewavala, President of the Southern Gujarat Chamber of Commerce and Industry (SGCCI), told the Times of India.
