Can India overtake Bangladesh in textile exports to the European Union?
The Hindu
India’s textile sector has been steadily losing ground in global export markets. In contrast, Bangladesh has woven together a remarkable export success. Given the recently signed India-EU Free Trade Agreement (FTA), and with Bangladesh poised to lose its Least Developed Country (LDC) status, this is an opportune moment for India’s textile industry
India’s textile sector has been steadily losing ground in global export markets. In contrast, Bangladesh has woven together a remarkable export success. Given the recently signed India-EU Free Trade Agreement (FTA), and with Bangladesh poised to lose its Least Developed Country (LDC) status, this is an opportune moment for India’s textile industry.
Within the textile value chain, India’s exports to the EU remain concentrated in intermediate products — particularly yarns and fabrics — rather than in finished garments such as T-shirts, shirts, and trousers. Bangladesh’s exports far exceed India’s in two readymade garment categories in particular — knitted or crocheted garments (such as T-shirts, jerseys, pullovers, sweaters, and cardigans) and woven garments (such as suits, jackets, trousers, dresses, and shirts).
As shown in the chart below, India’s share of the EU’s total imports declined from nearly 6.5% in 2009 to about 4.4% in 2023 for knitted/crocheted garments. Bangladesh’s share rose from just 6% in 2000 to 13% in 2009 and 26% by 2023.
A similar pattern is seen in the woven garments trade too. For woven garments, India’s nominal export value to the EU fell in absolute numbers from a peak of about $3.5 billion to $2.9 billion.
To understand why Indian garments have not been able to compete with Bangladesh in the EU market, we compared the average per-unit price of Bangladesh’s major export commodities. From the table below, it is clear that India’s unit values are consistently higher across all products.
This may indicate the following: First, India may be exporting more value-added, better-quality garments, which allows it to charge higher prices.
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