Bangladesh Crisis Impacts Indian Textile Industry

New Delhi, Aug 6 (PTI) Bangladesh, which is facing its worst political crisis since Independence in 1971, poses "significant concerns" for India's textile and apparel sector, particularly for companies operating factories in the neighbouring country, the Confederation of Indian Textile Industry said on Tuesday.

The domestic textile industry body believes that any supply disruption in Bangladesh will have an immediate impact on the supply chain, potentially affecting production schedules and delivery timelines of Indian firms.

"The situation in Bangladesh is indeed concerning, and we are closely monitoring the developments. Bangladesh's growth in the textile sector has been inspiring and has lent strength to the trade flows in the entire subcontinent.

"While we are concerned about the impact on the supply chain and the potential delays and disruptions it might cause, we are hopeful that the situation will improve soon," Chandrima Chatterjee, Secretary General, Confederation of Indian Textile Industry (CITI) said.

According to CITI, Indian companies with manufacturing operations in the country are likely to face challenges in maintaining their production flow, leading to delays and potential shortages in the market. This disruption could affect the availability of products and might force companies to seek alternative manufacturing solutions to mitigate the impact.

"Amid the uncertainties in Bangladesh, there is already a noticeable shift towards alternative manufacturing hubs such as a strategic move by companies to diversify their production bases and reduce dependency on a single market," CITI stated.

It observed that Indian textile hub Tirupur, known for its robust textile and apparel manufacturing capabilities, may emerge as a key beneficiary of this shift.

Bangladesh is facing its worst political crisis since independence in 1971, with Prime Minister Sheikh Hasina resigning amid massive anti-government protests.

Bangladesh Army Chief General Waqar-uz-Zaman on Monday announced that an interim government would be taking over the responsibilities.

"Several major global brands that rely on Bangladesh for their sourcing needs will also be affected by these disruptions. Brands with significant portions of their supply chain rooted in Bangladesh may experience delays and a decrease in the availability of their products. This, in turn, could lead to a ripple effect across the global retail market, affecting inventory levels and sales," CITI said.

Bangladesh is a crucial market for Indian textiles, serving as both a manufacturing hub and a significant export destination.

"The Indian industry is deeply concerned about the current events and hopes for the swift restoration of normalcy. Stability in Bangladesh is vital for maintaining the smooth operation of cross-border trade and production," CITI said.