India Poised to Gain from Bangladesh's RMG Crisis

On 8th Aug 2024, a CareEdge study estimates that India could secure additional export orders worth $200-250 million per month in the short term due to the current situation in Bangladesh.

Challenges Facing Bangladesh: Bangladesh, historically a major player in the global RMG market, has struggled with a decline in exports and political instability, opening up opportunities for India.
Medium-Term Opportunities: If unrest in Bangladesh continues, India could potentially increase its export orders to $300-350 million per month in the medium term.
Beneficiaries of the Shift: Large-scale Indian RMG manufacturers with operational efficiency and backward integration are expected to benefit most as global brands seek reliable suppliers.
Export Decline in Bangladesh: Bangladesh's RMG exports have dropped by 17% in the first quarter of the current fiscal year compared to the same period last year.
India’s Export Growth: In contrast, India has experienced a 4% growth in RMG exports during the same period, helping to close the gap between the two countries' market shares.
Narrowing Export Ratio: The ratio of Bangladesh's RMG exports to India's has decreased from approximately 3.2x in FY24 to 2.5x in Q1 FY'25.
Current Export Totals: India's RMG exports totaled $3.9 billion in Q1 FY'25, while Bangladesh's were $9.7 billion, highlighting a narrowing gap.
Future Prospects: Future prospects for India are bolstered by recent budget announcements on skilling programs and potential Free Trade Agreements with the UK and the EU.