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Bangladesh overtakes India in garment exports to US
05
Feb '09
For the first time in history, the small country of Bangladesh, which borders India on its eastern side, has been able to pip India in exports of garments to the US. This growth in exports came August 2008 onwards, from which time onwards Bangladesh has been able to grow by 10 percent, while that of India fell by 3 percent in shipments, in the same period, to the key markets of the US.

The US which imports around $70 billion worth of clothing each year, accounts for nearly 25 percent of all apparel exports from India and is the biggest market among all countries worldwide. Bangladesh has now taken the fifth position in exports to the US and thereby pushing India to the sixth rank. India had targeted exports of US $11.62 billion, in the current fiscal (2008-09), but that seems far fetched now, and is expected to touch $8.78 billion.

The reasons for the above are not far to seek. Exports from the clothing sector in countries like Bangladesh and Vietnam are growing with each passing year. In spite of the global crisis the Vietnamese textile and garment industry has been able to record a growth rate of 18 percent in its exports to the US in 2008 compared to 2007. The main point on which these countries score over India is price competitiveness.

Bangladesh has bigger and more technology oriented garment units which are more productive than their Indian counterparts and which gives them a pricing edge in dealing with global apparel companies and retailers vis-à-vis Indian manufacturers. They also have very low labour costs in comparison to India. Indian labour costs are nearly double that of Bangladesh. Labour accounts for a large chunk of operating costs in apparel manufacturing units.

The Indian textile and garment export sector has been crying for help from the government to help them survive the crisis and association bodies have submitted umpteen numbers of memorandums on the same. But at the same time it is the exporters who will have to take the lead in improving their competitiveness as well tackling bottlenecks in a bid to survive through the crisis as well as maintaining decent growth rates.

Fibre2fashion News Desk - India

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