Changing Lanes: India's clothing industry is in the midst of a big shift. Instead of relying solely on suppliers within the country, they're increasingly turning to Bangladesh to meet their sourcing needs.
The Price is Right: The main reason for this change is Bangladesh's significant cost advantage. A recent study (2023 BGMEA) showed that Bangladesh has labor costs nearly 20% lower than India. Plus, a trade agreement (SAFTA) allows certain garments from Bangladesh to be imported duty-free into India, saving Indian companies even more money.
More Than Just Cost: However, Bangladesh offers more than just affordability. They've built a strong manufacturing base over time, supplying top international brands like H&M and Zara. This means they have a skilled workforce and efficient production lines, ensuring good quality clothing.
A Real-Life Example: This trend can be seen with Reliance Retail, a major Indian retail chain. In 2017, they opened a sourcing office in Bangladesh and have since greatly increased their garment purchases from there. This shows the significant cost savings they've achieved.
Matching Market Needs: The move towards Bangladesh isn't just about price. Bangladesh excels at making knitwear, which is perfect for India's growing demand for casual clothes. They're also skilled in other popular areas like denim.
A Win-Win for All: This rise in Bangladesh's garment exports to India benefits both countries. Indian companies get affordable, high-quality clothing, while Bangladesh enjoys a growing export market. Experts predict this trend will only get stronger, with Bangladesh's garment exports to India possibly reaching over $1 billion in the next two years.
