India could secure additional monthly RMG export orders worth $200-250 million in the short term and $300-350 million in the medium term due to the current instability in Bangladesh, according to a report released by CareEdge.
Historically, Bangladesh has captured much of the global market share lost by China in RMG exports, while India has struggled to fully capitalise on these opportunities. However, the current situation in Bangladesh offers a strategic opportunity for India to expand its presence in the global RMG market, both in the short and medium terms.
The report highlights, large-scale Indian RMG manufacturers with strong operational efficiency and backward integration will benefit the most, as global brands seek reliable and efficient suppliers amid the uncertainty in Bangladesh.
Bangladesh's RMG exports declined by 17 per cent in Q1, FY25 compared to the same period last year. In contrast, India experienced a 4 per cent growth in RMG exports during the same period.
The socio-political disturbances and inadequate foreign exchange availability in Bangladesh have contributed to a slight erosion of its market share in the first quarter of the current fiscal year. This shift has narrowed the gap between Bangladesh's and India's RMG export volumes, with the ratio declining from 3.2x in FY24 to 2.5x in Q1FY25. During this period, Bangladesh's RMG exports totaled $9.7 billion, while India's exports reached $3.9 billion.
The recent budget announcements on skilling programs and the potential Free Trade Agreements with the UK and the EU are likely to further boost India's position in the global RMG market, says Krunal Modi, Director, CareEdge Ratings.
