Bangladesh’s export of apparel products to India rose by about 37 per cent in fiscal year 2012-13 thanks to duty-free and quota-free access of some textile products into the Indian market. Garment exports to India increased mainly due to the tariff concession. Bangladesh sees a bright export potential in India. India has a strong demand for Bangladeshi products like trousers, shirts, blouses, skirts, kids’ wear, cotton nightwear and jeans.
A break-up of Bangladesh exports to India reveals that textile fibers, paper yarn, and woven fabric constitute about 24 per cent of the exports followed by other manmade textile articles, which constitute about 14 per cent. However, the devaluation of Indian rupee against the dollar may affect exports of readymade garments as Indian consumers would cut consumption.
Meanwhile India has pledged supplies of two million bales of cotton to Bangladesh — its main competitor in garment exports —starting October. Bangladesh textile mills have been assured of a smooth flow of cotton from India even if India has to ban cotton exports to other countries.
Assuring raw material supplies to Bangladesh, which depends on imports to cater to apparel export demand, could further enhance its competitiveness against Indian mills, considering that labor costs in Bangladesh stand at 53 per cent of India's and power costs at 63 per cent.