Apparel exports to India up 18.7pc during July-January

Apparel exports to one of Bangladesh's promising non-traditional markets, India, recorded a significant double-digit growth during the first seven months of this fiscal after a fall in the last financial year.

Exporters believe an improvement in the global-market situation following a rise in demand has pushed up shipments of readymade garments to the neighbouring country.

There are many Western brands that operate their own stores in India and they are also importing more from Bangladesh alongside a rise in demand from India too, they explain the dynamics of the turnaround.

According to Export Promotion Bureau (EPB) data, garment exports to India rose to US$427.62 million during the first seven months of FY25, marking an 18.70-percent year-on-year growth.

Of the turnover, some $147.85 million came from knitwear and $279.16 million from woven garments, data revealed.

Apparel-export earnings from India were $360.26 million during the July-January period of FY24, according to the EPB data.

In FY24, Bangladesh received $548.83 million from India, which was 19.70- percent lower than the earnings of $683.47 million in the fiscal year 2022-23.

Talking to The Financial Express on Friday, former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan said India's overall imports in the last fiscal year were lower as the country is focusing more on domestic production.

"Besides, imports became expensive for them due to the currency issue," he said.

Mohiuddin Rubel, a former BGMEA director, said exports to India increased in the current fiscal year despite a fall in the last two because of a push from global rise in demand.

"Many US and European Union (EU) companies are operating in India with their own brand names. Following improvements in the global economy, they are also sourcing products from Bangladesh for their stores in India," he explains.

India, being a manufacturing hub, also focused more on exports following a rise in its global shipments and is busy with external shipments that force its local brands to again opt for imports from countries like Bangladesh, added Mohiuddin, also additional managing director of Chattogram-based Denim Expert Ltd.

Exporters, however, predict Bangladesh's garment exports to India might face severe challenges due to high duty obligation to be applicable after graduation from the least-developed country (LDC) status.

They think Bangladesh should immediately decide its post-graduation strategy and apply for an extension of the existing preferential trade regime. Besides, they urge the government to start negotiations on bilateral agreements with the non-traditional markets to maintain the existing trade concessions, and seek additional time to get prepared for the upcoming challenges.

Like in the traditional EU and Canadian markets, RMG exports are supposed to face high import duties in some non-traditional markets, too.

According to a latest study, Bangladeshi RMG would face a tariff wall of as high as 20-percent duty in India.

Talking to The Financial Express, DBL Group Vice-Chairman MA Rahim Feroz said there would be serious implications on garment exports to India and Japan because of high duty, and business growth would decline initially in the post-graduation era.

A number of exporters opine that the possibilities of graduation-time deferment can be considered as economic indicators were inflated during the last decade and the internal ecosystem got affected.

Also, the country needs further strengthening of its backward-linkage industry, they noted.

The duty-free market access is one of the main reasons why buyers source from Bangladesh, they said, adding that the government should apply for the graduation deferral to help buyers make their strategic plan.

Bangladesh's official LDC graduation is scheduled for November 24, 2026.

Exporters point out that firms in Bangladesh also face a high cost of doing business stemming from inadequate infrastructure, administrative inefficiencies, slow customs processes, and poor logistics, which collectively undermines competitiveness and hinders investment.

Former Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Hoque told the FE measures must be initiated immediately to sustain duty benefits after graduation.

He names India, Japan, Australia, Chile, and China among the major non-traditional markets that offer duty benefits to Bangladeshi RMG under the LDC category.

"Export to India will be severely affected after the graduation if measures are not taken to continue the benefits," he alerts.

Munni_fe@yahoo.com