Bangladesh, once considered one of the fastest-growing economies in the world, is now engulfed in political tensions. Nearly 100 are dead, and thousands are injured in the ongoing political riots. Sheikh Hasina, who has been ruling Bangladesh since 2009, has resigned from her prime ministerial position and fled from the nation. The army chief of the nation, Waker-Uz-Zaman, mentioned the new interim government would be formed with the participation of all parties; until then, military rule would prevail in the country.
With this rising political tension, textiles, one of the biggest sectors in Bangladesh, is likely to fall victim to the turmoil. It is assumed by various experts that international buyer may shift their focus to alternative markets like India, providing them with a business of $300-400 million per month. As per K M Subramanian, president of the Tiruppur Exporters’ Association, “We expect orders may start coming to Tiruppur, and this financial year, they are expected to be at least 10 per cent more than last year’s.”
Further, according to trade policy analyst S Chandrasekaran, more than 25% of the textile units in Bangladesh are owned by Indians. These include brands like:
- Shahi Exports
- House of Pearl Fashions
- Jay Jay Mills
- TCNS,
- Gokaldas Images
- Ambattur Clothing
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Chandrasekaran further mentioned that, given the fierce clashes among individuals and the loss of international clients, these companies might shift their base to India. He states “The movement of consignments is stuck, and there is a breakdown in the supply chain for the upcoming Christmas season. India has an advantage here because orders will be diverted.”
The turmoil may negatively impact several other sectors also, such as automobiles, technology, FMCG, power, railways, pharma, and more. Several Indian companies have significant business operations in Bangladesh; Marico Ltd generated revenue of Rs. 1103 crore in the last fiscal year from Bangladesh. Similarly, Emami Ltd has a local factory in Bangladesh and generated revenue of more than Rs. 17000 crores in the last fiscal year from the country. Likewise, TATA, Godrej and more who have significant operations in Bangladesh may suffer significant losses due to political crisis.
