Synopsis:
- In the past, Bangladesh and Vietnam were able to take up a significant portion of China’s diminishing share of the world market for ready-made garment (RMG) exports, but India was unable to effectively take advantage of China’s dropping share. The Indian RMG industry has an opportunity because to the recent political upheavals and social turbulence in Bangladesh, which is the second-largest supplier of RMG after China.
- If the socio-political unrest continues for more than a quarter or two, Bangladeshi exporters will find it challenging to deliver their goods to clients on schedule. In the near future, India is anticipated to receive monthly export orders worth USD 200–250 million in such a scenario. Given that global RMG brands and retailers are often more picky about their sourcing partners, a significant portion of this market share loss may be irreversible and, in the medium run, result in an increase in monthly export orders of about USD 300–350 million.
- In Q1FY25, Bangladesh’s RMG exports saw a 17% year-over-year decline, but RMG exports from India increased by 4% during the same time frame. In Q1FY25, Bangladesh experienced a slight decline in market share, primarily as a result of socio-political unrest and limited foreign exchange availability that favored India. As a result, the ratio of Bangladesh’s RMG exports to those of India decreased from approximately 3.2x in FY24 to 2.5x in Q1FY25.
