From Yarn to Fabric: Bangladesh's import boom and India's lucrative role
In South Asia, Bangladesh's ready-made garment (RMG) industry has emerged as a global powerhouse. This has resulted in a meteoric rise in raw material imports, reflecting a growing demand to sustain its prolific apparel production. Recent data from the Bangladesh Bank highlights this increase, with yarn imports growing 25.8 per cent and textile-related articles rising by 26.9 per cent in the first four months of fiscal year 2024-25 (July-October).
The rise in raw material imports
Bangladesh's appetite for raw materials has soared, underscoring its status as a manufacturing dynamo. Yarn imports alone grew from $968.7 million to $1218.8 million, while textile imports reached $2998.4 million, highlighting a robust 26.9 per cent increase. Raw cotton imports witnessed a substantial rise of 15.4 per cent, worth $1258.8 million during the same period. This growth underscores the critical role of imported raw materials in sustaining the nation's apparel export sector, valued at $7.92 billion in the first half of FY '24.
Table: Bangladesh's textile import landscape (July-October)
|
PRODUCT |
23-24 July-Oct. |
24-25 July-Sep. |
24-25 July-Oct. |
% Changes (comparison between July-Oct, '23-24 and July-Oct, '24-25) |
|
Raw cotton |
1091.1 |
955.8 |
1258.8 |
15.4 |
|
Yarn |
968.7 |
876.6 |
1218.8 |
25.8 |
|
Textile and Articles thereof |
2363.8 |
2061.6 |
2998.4 |
26.9 |
|
Staple Fibre |
436.9 |
349.5 |
517.8 |
18.5 |
Source: Bangladesh Bank
India, a lucrative partner in supply chain dynamics
Amidst Bangladesh's growing demand, India emerges as an important supplier of raw materials. Proximity, established trade relations, and competitive pricing make India a preferred source for raw cotton, yarn, and fabrics. This symbiotic relationship promises mutual benefits, with Bangladesh securing essential inputs for its leading export sector while India boosts export revenues and strengthens regional trade ties.
Despite India's strong position in cotton and yarn exports to Bangladesh, challenges persist from global competitors like China and Vietnam, particularly in fabric exports. China, a dominant force, annually supplies approximately $10 billion worth of fabrics to Bangladesh, leveraging its scale, efficiency, and competitive pricing in synthetic and blended fabrics.
India's strategic moves
To bolster its market share, Indian trade bodies like TEXPROCIL, AEPC among others are spearheading initiatives to enhance export competitiveness. Strategies include promoting value addition through technical textiles and specialty yarns, improving supply chain infrastructure, simplifying export procedures, and emphasizing quality and sustainability standards. Government schemes such as the PLI for textiles and RoDTEP further incentivize domestic manufacturing and export competitiveness.
Looking ahead, India aims to strengthen its foothold in Bangladesh's textile market by enhancing trade facilitation, participating actively in international trade fairs, and pursuing strategic bilateral agreements. With a focus on innovation, sustainability, and quality, India seeks to deepen its integration into Bangladesh's supply chain, supporting the nation's quest for higher-value apparel production.
Therefore, as Bangladesh's RMG industry scales new heights, driven by growing raw material imports, India emerges as a linchpin in the supply chain ecosystem. The synergy between these two South Asian giants not only propels economic growth but also fortifies regional trade dynamics. With strategic foresight and collaborative efforts, India stands poised to further elevate its role as Bangladesh's premier supplier of choice in the evolving global textile landscape.
