How India Could Capture Bangladesh’s Readymade Garment Market Amid Political Unrest

Political instability in Bangladesh is creating ripples in the global readymade garment (RMG) industry, and India stands to gain significantly. A recent report suggests that if the unrest in Bangladesh continues, up to 10% of the country’s RMG export orders could shift, translating into a $200-250 million monthly opportunity for India in the short term and potentially $300-350 million in the medium term.

India, which ranks seventh in the global RMG market with a 3-4% share, has the capacity to increase its exports by 20-25%, according to CareEdge Ratings. The situation in Bangladesh presents a golden opportunity for India to elevate its status in the global RMG trade. Currently, Bangladesh is the second-largest exporter of RMG, holding an 8.5% share, a position it gained by capitalizing on China's declining market dominance. However, with the ongoing socio-political challenges, Bangladesh’s reliability as a supplier is being questioned, which could result in permanent market shifts.

The Indian RMG sector is well-positioned to absorb this potential influx of orders. Unlike Bangladesh, which imports a significant portion of its raw materials, India has a robust textile value chain that extends from fiber production to finished garments. This self-sufficiency, combined with various government initiatives like the PM Mega Integrated Textile Region and Apparel (PM MITRA) park and the Production Linked Incentive (PLI) scheme, enhances India’s competitiveness on the global stage.

Additionally, India’s strategic push towards free trade agreements (FTAs) with key markets further strengthens its position as a viable alternative to Bangladesh. The global shift towards a China+1 sourcing strategy has already put India in the spotlight, and the current situation in Bangladesh could accelerate this trend. 

If the unrest in Bangladesh continues for several quarters, Indian exporters might gain a permanent foothold in markets traditionally dominated by their Bangladeshi counterparts. This shift would not only boost India’s export numbers but also establish it as a reliable player in the global RMG sector.

As the global RMG industry continues to evolve, India’s ability to quickly scale up production and meet international standards will be crucial. Companies with large production capacities are likely to benefit the most, as they can efficiently handle significant orders from global brands. With Bangladesh’s share in global RMG trade potentially at risk, India has a real chance to increase its market share and secure long-term growth in the sector.

This scenario highlights the interconnectedness of global trade, where political events in one country can create opportunities for another. For India, the key will be to capitalize on this moment, ensuring that it not only fills the gap left by Bangladesh but also strengthens its position in the global RMG market for the long term.