Bangladesh has gradually started to come out from traditional export destinations. The main markets for garment exports from Bangladesh are mainly western countries. Bangladesh export more than 71 percent of its total apparel export to the US and EU countries. However, India is now the fastest growing market of Bangladesh RMG according to the export data.
According to the BGMEA information, Bangladesh’s garment exports to India have grown by about 70 percent to $715.41 in the last financial year. The growth trend continues in the current financial year 2022-23. In the first two months of the financial year (July-August), the growth was 99 percent and the last July-September quarter, the growth was 66 percent. If this growth trend continues, it is expected that by the end of the current fiscal year, the value of apparel exports to India alone will cross $1 billion.
According to export data, apparel exports to India in FY 2020-21 were $422 million, up just 0.25% from exports of $421 million in FY 2019-20. RMG exporters said they were already confident of growth in exports to India. They were also working on its implementation, which is reflected in the growth of exports.
Apparel export to India is far ahead of western countries as per the recent growth rates. According to BGMEA statistics, in the first quarter of the current financial year, the export growth in Canada was 17.4 percent, Japan was 16.6 percent, Australia was 14.21 percent, Europe was 12.43 percent, and the US was 5.13%. But exports to neighboring India grew by more than 66 percent. However, Apparel export to Russia seen a negative growth of 47.3%.
BGMEA President Faruque Hassan said, when I went to India, I told them on several occasions that they should not think of us as competitors. In the last few years, we have been able to convey these things to India. As a result, our exports to India have increased. I hope we can maintain the pace of export growth in the country even in these bad times. Our growth in other countries is negative. I think growth in India will remain positive. I am confident about this.
Exporting to India has many advantages. To Bangladesh as of now, the nearest and biggest market is the Indian market. The population of India is massive and if Bangladesh can tap into this market and sell products, a lot of its losses will be covered. Trade with India as a neighboring country has lower transport costs. Recently, Commerce Minister Tipu Munshi also expressed optimism that exports to India will reach US$4 billion in the next three years.
Bangladesh is now working on man-made fibers or artificial fibers. India is very strong in man-made fiber and Bangladesh imports most of the raw materials and man-made fibers from India. Meanwhile, exports from Bangladesh are increasing. Bangladesh is still availing tariff benefits as LDCs and hopefully, it will be done in several years.
However, exporters still see many obstacles in the way of smooth export to India. According to them, Bangladesh needs to facilitate the import of goods to increase exports to India. Only one of the land ports can be used and partial shipping is also not allowed there. Moreover, there are barriers related to experiments in that country too. Besides, the country also has objections regarding the minimum price limit of the product. In this case, special approval is required. All in all, it can be assumed that it is possible to continue the growth trend by increasing the mutual cooperation of the government and trade organizations of both countries.