Will Bangladesh's Political Crisis Opens Doors For Tiruppur's Textile Boom?

The political turmoil in Bangladesh has taken a major turn after Prime Minister Hasina Sheikh was forced to resign following weeks of protests over a controversial jobs quota resulted in the deaths of over 300 people.

As the situation escalated, Hasina fled Dhaka in a military aircraft, first seeking refuge at an Indian Air Force base in Uttar Pradesh. This sudden shift in leadership and the ensuing turmoil have cast a shadow over Bangladesh's textile sector, a cornerstone of its economy.

With international buyers growing wary of the instability in Bangladesh, there is a significant opportunity for alternative markets to step in. Industry experts predict that India, particularly textile hubs like Tiruppur, stands to benefit immensely from this disruption. If just 10-11 per cent of Bangladesh's textile exports are redirected to India, it could translate to an additional $300-400 million in monthly business, according to a report in The Times of India.

K M Subramanian, president of the Tiruppur Exporters' Association, expressed optimism about the potential influx of orders. "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," he told the English daily.

Bangladesh's monthly apparel export, valued between $3.5-3.8 billion, holds a significant share in the European Union, the United Kingdom, and about 10 per cent of the United States market.

Currently, India exports apparel worth $1.3-1.5 billion per month. Prabhu Damodaran, secretary to the Indian Texpreneurs Federation, highlighted the capacity for growth, "This is unfortunate, and if the current disruption lasts long, it will affect buyer sentiment. Initially, buyers will likely shift some orders to India and other countries. We have the capacity to handle an additional $300-400 million in orders immediately."

Moreover, the crisis in Bangladesh is likely to prompt a shift in manufacturing bases. Approximately 25 per cent of textile units in Bangladesh are owned by Indians, including major companies such as Shahi Exports, House of Pearl Fashions, Jay Jay Mills, TCNS, Gokaldas Images, and Ambattur Clothing.

Trade-policy analyst S Chandrasekaran noted, "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 sudden drop in global volumes may be compensated by a rise in Indian exports."

As the political and economic instability in Bangladesh continues, the ripple effects on the global textile market could present a golden opportunity for Tiruppur's textile industry to expand and thrive.

Dubbed India's Manchester, Tiruppur is home to 10,000 garment manufacturing hubs, according to Business Standard. There are over 6 lakh workers who make hosiery, knitwear, casual wear and sportswear.

In FY22, Tiruppur contributed 54.2 per cent of India's textile exports. According to Raja M Shanmugham, President of the Tiruppur Exporters' Association, Tiruppur alone accounted for 1.07 per cent of India's total exports, which amounted to around 480 billion dollars in FY22.