Indian RMG industry sees surge in orders at the expense of Bangladesh turmoil

International garment brands have shifted their alternative production option to India given the current situation in Bangladesh in the aftermath of the fall of the autocratic Awami League regime.

The Annual Report of the Indian Commerce Ministry indicates that India has already exported $14.5 billion worth of apparel in 2024 with readymade garment exports for the first quarter of the 2024-2025 financial year reaching $3.9 billion.

During the same time, exports of Bangladesh garments are staggering low to $9.7 billion, it says.

Tiruppur, a small town of Tamil Nadu’s knitwear export industry, has secured export orders worth Tk450 crore over the last months, as brands from Germany, the Netherlands and Poland have turned to India amid Bangladesh’s current situation.

Major retailers, including KiK, Zeeman and Pepco, have placed urgent orders for garment priced around $3 each. President of Tiruppur Exporters Association KM Subramaniam has said these orders were sent before Christmas.

The orders include a variety of knitted garments such as kid wear, nightwear, tops, and pyjamas. Calling it an "unusual situation," Subramaniam said generally, brands place their orders in December and January for the spring season or in June and July for the holiday season. The sudden surge in demand ahead of Christmas is a first for Tiruppur hub. Additionally, global brands have initiated social auditing at 10 newly selected knitwear factories in Tiruppur, signalling the potential for increased future orders. That is the reason why before the New Year this industry is booming with huge profits.

Similarly, the Noida apparel export industry has also benefited with the Noida apparel export clusters (NAEC) reporting a 15% increase in orders from Zara over the last month, compared to the same period last year. The NAEC president said that Zara has requested women's tops and dresses with a tight delivery timeline of 60 days. He said, "Such orders this time of the year are unusual."

A Sakthivel, head of the southern region of the Apparel Export Promotion Council, pointed out that some brands have rerouted orders from Bangladesh to Tiruppur due to the current situation of Bangladesh's garment industry.

He expects that after the free trade agreement with the European Union, more orders are expected. Bangladesh has enjoyed benefits for several years from having an FTA with the EU. CareEdge Ratings noted that while Bangladesh garment exports in FY 24 were about 3.2 times those of India, the ratio narrowed to 2.5 times in the first quarter of FY25, indicating India's growing share in the global market.

Moreover, the Indian government has suspended the India-Bangladesh Friendship Pipeline construction project. Diesel, a key resource for Bangladesh's textile sector, may be affected by this decision, potentially disrupting garment productivity in the country. Eventually, by default, the Indian garment industry will enjoy an unprecedented boom.