Pic: Adobe Stock Apart from the impact of socio-political upheavals in Bangladesh, this was also aided by various initiatives to enhance the competitiveness of Indian RMG exports, the Indian rating agency noted.
Bangladesh's FY24 garment exports were around 3.2 times of India's, but this ratio was 2.5 times in Q1 FY25, reflecting India eating into the share of Bangladesh, CareEdge Ratings said. India may gain around 6-8 per cent and 10 per cent of Bangladesh's monthly export orders in the near term and medium term respectively if the unrest in the latter continues.The socio-political uncertainties prevailing in Bangladesh may result in global RMG brands and retailers with a significant presence in Bangladesh diversifying their sourcing for meeting their delivery schedules, especially if the crisis persists for more than a quarter or two, it said in a release.
In such a situation, India is expected to gain around 6-8 per cent and 10 per cent of Bangladesh’s monthly export orders in the near term and medium term respectively, translating into monthly incremental export opportunity of around $200-250 million in the near-term and $300-350 million in the medium-term, it said.
India has enough headroom to increase RMG exports by 20-25 per cent given the available capacities in the sector.
With the China+1 sourcing strategy already in the works, global RMG brands and retailers have limited alternatives such as India, Vietnam and Cambodia to replace Bangladesh, and India is in a prime position to capitalise on the opportunity, it said.
Bangladesh’s RMG exports registered a 17-per cent de-growth in Q1 FY25 on a year-on-year (YoY) basis, while Indian RMG exports have grown by 4 per cent during the same period.
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