Different estimates are being made regarding whether the ongoing political crisis in Bangladesh will be harmful or beneficial for the Indian economy. On the export front, India was already facing a decline for the last 2 years, which could become the reason for decline again this year if the current situation remains like this for a long time.
India and Bangladesh are known as the strongest allies in South Asia. In the last 10 years, relations between the two countries have touched new heights. In such a situation, the coup in Bangladesh is sure to have an impact on bilateral trade. But now there is a possibility that the efforts being made for a free trade agreement between the two countries will not be completed soon. According to the World Bank, this FTA would benefit both the countries due to which Bangladesh’s exports to India can increase by 297 percent. At the same time, FTA can also help India in increasing its exports to Bangladesh by 172 percent.
Demand for Adani Wilmar in Bangladesh!
If we talk about India’s imports and exports, then India’s cotton business and its exports are likely to suffer the biggest blow. India exports cotton worth about $2.4 billion to Bangladesh every year. According to Commerce Ministry data, Bangladesh had only 16.8 percent share in total Indian cotton exports in 2012-13. But by 2023-24, Bangladesh’s share in total Indian cotton exports has increased to 34.9 percent.
After cotton, fuel is the second most exported item from India to Bangladesh. Apart from this, Indian companies also have a big presence in Bangladesh. Adani Group company Adani Wilmar is the owner of Bangladesh’s largest cooking oil brand. Indian auto companies also export there on a large scale.
Zara-H&M clothes are made in Bangladesh!
However, even before this political crisis, Bangladesh’s economic crisis and inflation had reduced the overall demand in Bangladesh, due to which Indian exports have also decreased. Bangladesh exports are recognized for its garment sector as it is one of the largest apparel exporters in the world. Clothes of big popular fashion brands like Zara and H&M are largely manufactured in Bangladesh. The share of garment industry in the total exports of Bangladesh is 83 percent.
Bangladesh is the third largest clothing exporter in the world. But due to the current unrest, Bangladesh’s apparel industry may be badly affected, which may benefit China. By the way, this is also a big opportunity for India, because India itself is the sixth largest apparel exporter in the world.