From 3.2 times those of India during FY24, Bangladesh's RMG exports narrowed to around 2.5 times of India’s exports in Q1, FY25, as per a report byCareEdge Ratings.

This shift was a result of not just socio-political upheavals in Bangladesh but also because of various initiatives taken to enhance the competitiveness of Indian RMG exports. The ongoing socio-political uncertainties in Bangladesh may push global RMG brands and retailers with significant operations in the country to diversify their sourcing strategies, particularly if the crisis extends beyond a quarter or two.

In such a scenario, India is poised to benefit by capturing approximately 6 per cent-8 per cent of Bangladesh's monthly export orders in the near term and 10 per cent in the medium term. This shift could translate into a monthly incremental export opportunity of around $200-250 million in the short term and $300-350 million in the medium term for India.

India has sufficient capacity to increase its RMG exports by 20 per cent -25 per cent, taking advantage of the available production capabilities in the sector. With the ongoing China+1 sourcing strategy, global RMG brands and retailers have limited alternatives, such as India, Vietnam, and Cambodia, to replace Bangladesh. Among these, India is well-positioned to capitalize on this opportunity.

Bangladesh's RMG exports declined by 17 per cent decline in Q1 FY25 compared to the previous year, while Indian RMG exports grew by 4 per cent during the same period. This trend highlights India's growing role in the global RMG market.