Apparel Online India Magazine March 1st Issue 2019 | Page 52

THE FUTURE OF
BANGLADESH-INDIA
APPAREL TRADE
Bangladesh has a capability to export US $ 2 billion worth of apparels to India in the next two years, believes
Tipu Munshi, Commerce Minister of Bangladesh, who is also a garment exporter and Ex-President of
BGMEA. One may say that it is an ambitious figure but seems possible too. According to a data by Export
Promotion Bureau, Bangladesh, the country’s apparel export to India was US $ 438.22 million (January-
December 2018), 151.50 per cent up from January to December 2017. The Indian apparel retail market
was estimated to be worth around US $ 85 billion in FY ’17 and is projected to grow at 9.7 per cent year-
on-year to reach US $ 115 billion in 2026. Interestingly, the share of spending on clothing and footwear
in total consumer spending in India is 6.7 per cent, which is way higher than what is seen in the US (3 per
cent) and the UK (5.7 per cent).
T
he growing and organised apparel retail in India,
duty-free access to Bangladesh’s readymade garment
products and rising demand for apparel at competitive
prices, are some of the few reasons for Tipu’s strong
belief. Imports from other countries, especially China, are
facing 20 per cent duties in India. The price advantage
that Bangladesh’s companies have is substantial. Fashion
trends in India are near to the Western world, and
because of working with Western brands over the years,
Bangladeshi companies have developed a stronghold to
produce products according to their taste. Bangladesh’s
tilt is more towards product development, value addition,
which makes the country to fetch more value and more
orders too. It is turning as a big edge, while working with
the Indian market.
There are some other important aspects, which
strengthen the further prospects of Bangladesh RMG
export to India like overall sentiment in the Western
world is going down but India is a better market. As India
is comparatively a hot country and winter is for limited
season, products like tees, trousers and shirts have good
scope. Bangladeshi products give an international flavour
to this collection, thanks to the duty-free fabric import
facility in Bangladesh due to which garment exporters
import fabric globally, which adds value to the country’s
products and makes them more attractive.
“Leading Indian retailers and brands understand well that
apart from the cost-effectiveness and international flavour
being added to their offering by Bangladeshi products, the
scalability of Bangladesh is unmatched,” affirms Sandeep
H Golam, Group Operation Director, Armana Group.
With a capacity of 3 million pieces of denim per month,
the company works with many Indian conglomerates like
Arvind Ltd., Aditya Birla, Myntra, etc.
Sandeep further adds that though Bangladesh’s apparel
export to India is growing, it is not at the pace that it
should grow keeping in mind the high scope. Sandeep’s
52 Apparel Online India | MARCH 1-15, 2019 | www.apparelresources.com
logic is backed by the official figures. Bangladesh export
to Japan was US $ 547 million during the first six months
of FY ’19, more than double to India. Bangladesh’s fiscal
year starts from July and ends in June. “No doubt, India
has its own strong manufacturing base; but as brands and
retailers are growing, expanding by leaps and bounds,
India will have to find a meaningful way to increase its
sourcing from Bangladesh,” he opines.
The Bangladeshi exporters are clear about their
growth opportunities in India and they are penetrating
even deeper with a better understanding of the retail
grassroots of India. Faruque Hassan, MD, Giant Group,
believes, “No one can ignore the potential of the retail
market in India, it is a huge market that is still unexplored
and with Tier-2 and 3 now joining the retail landscape, the
size of the market is mind-blowing.” Sharing similar view,
Mainuddin Ahmed, Director, Anowara Group, asserts:
“The young upwardly mobile India is the audience we
are looking for.” His thoughts are also shared by Shin
Shin Group, which is waiting for an opportunity to
enter the market.
Some of the companies are catering to the Indian market
for almost a decade now, and their experience remains
smooth. But now with changing conditions, there is a
pressure and price is the other major focus. “We have
been working with Woodland for seven years and never
faced any problem, but now other Bangladeshi firms are
also getting onto the bandwagon, the prices being offered
earlier have declined,” shares Khosru Chowdhury,
Chairman & MD, NIPA Group, who manufacture
outerwear. The company is looking for more partners, and
Reliance Retail is one of them.
Many exporters are supplying to India through their
established clients of the Western world with the help
of POs made by those brands for specific countries. One
such company is Hydroxide Knitwear, which is sending
products through the Bestseller brand to India, through