Meta Description: India poised to capture apparel market share from Bangladesh amid its economic crisis, AEPC urges policy reforms for growth

Amid ongoing economic and political instability in Bangladesh, Indian apparel exporters, particularly in the Tirupur cluster, are witnessing increased inquiries from global brands like Primark, Tesco, Decathlon, JCPenney, Gap, and Walmart. With orders expected to convert by early 2025, India is presented with an opportunity to capture a portion of Bangladesh’s global apparel market share, as the neighboring country faces challenges in importing cotton and fabric due to depleted foreign exchange reserves.

Bangladesh’s foreign exchange reserves fell below $40 billion in July 2024, impacting its ability to sustain cotton imports from India, creating a potential gap in its apparel production. Mithileshwar Thakur, Secretary General of the Apparel Export Promotion Council (AEPC), highlighted that if India captures just 10 per cent of Bangladesh's apparel exports, it could create up to 1.5 million jobs.

However, Bangladesh still holds a cost advantage due to its low wages, duty-free access in major markets, and Least Developed Country (LDC) status. To bridge this gap, India needs to sign free trade agreements with the EU and UK, allowing access to similar benefits.

Thakur also stressed the need for India to improve infrastructure, technology, and workforce skills to attract redirected investments from countries like Vietnam and Cambodia, traditionally seen as competitors. The AEPC has called for the introduction of PLI 2.0, which would incentivize capacity expansion and technology upgrades, especially for micro-industries.

Additionally, Thakur pointed out challenges in sourcing Man-Made Fibre (MMF) fabrics and the need to reduce high import duties on textile machinery. He also emphasized the importance of sustainability and ESG compliance in tapping into global markets, particularly the EU and the US.