Rising apparel imports from Bangladesh to hurt industry

In what could be seen as a concerning trend for the financially stressed textile industry, the apparel imports from Bangladesh, the largest exporter to India, have been increasing. Imports from Bangladesh have gone up by 17% from April to August in 2019 as compared to the corresponding period last year.

Government data in a report by The Clothing Manufacturing Association of India (CMAI) suggests exports from countries like Vietnam and Hong Kong are also on the rise, having seen a significant increase of 45% and 50% respectively in the concerned period.

India’s apparel imports from Sri Lanka, on the other hand, have shown a decline of 2% from April-August this year.

Rahul Mehta, President, CMAI told DH that “Low-cost imports from countries like Vietnam and Bangladesh are worrying because that is impacting the smaller players of the industry and 80% of the industry is still in the MSME sector.”

Mehta also explained the entry of China in the picture, saying that the FTAs with Bangladesh are encouraging duty-free imports of Chinese fabrics, with Bangladesh importing duty-free fabrics from China, adding value, and exporting duty-free to India.

With Sri Lanka, India has a duty free agreement, but only up to 8 million pieces. Such regulations, says Mehta, seem to be the pertinent course of action.

CMAI has also pointed it out that the import of readymade garments from Bangladesh has been growing at 50-80% per year, with current imports being close to about $375-$400 million. It is the trend and the rate of growth which is alarming. If this continues, the imports, just from Bangladesh, will reach $3.6 billion by 2025, said the association.