The Indian apparel industry is worried about duty-free imports of readymade garments from Bangladesh. Bangladesh can export more than 60 products including garments to India, without any duty, under the South Asian Free Trade Area (SAFTA) agreement. These exports have grown 480 per cent in the last five fiscal years. Textile goods produced and sold in India are subject to GST. However, the same products from Bangladesh reach India without any duty and so there is a ten per cent to 15 per cent cost difference between the products.

Many big Indian apparel industry players have set up manufacturing units in Bangladesh and they are also involved in exports to countries that include India. China, though, poses the biggest threat. China uses Bangladesh’s trade advantages to sell its fiber as well as machines. Chinese textile companies provide the fiber and fabrics to units in Bangladesh and get them exported as finished goods to India.

Bangladesh’s share in the international readymade garment market is second only to China’s. Bangladesh enjoys various trade advantages as it is one of the least developed countries. Also, it has the advantage of cheap labor and all these factors have put Bangladesh in second place in readymade garment exports.