Depriciating rupee impacts Bangladeshi textile imports

The rupee depreciation against the dollar has affected

textile imports from Bangladesh since now there is no difference between Indian manufactured apparel and the apparels manufactured in Bangladesh. And it has brought a cheer to India textile exporters. Direct imports of apparels from Bangladesh had picked up in the last one year since the government allowed duty free imports of 48 textile items from this country.

Rupee depreciated around 20 per cent since last September when the duty free imports were allowed. Since September to March last year, textile items worth $1.8 billion (over Rs 10,000 crores) were imported from Bangladesh, compared to $587 million (over Rs 3,000 crores) in a full year before duty free imports were allowed. Lower labour cost in Bangladesh along with the removal of import duty had made imported goods cheaper by around 20-15 per cent compared apparel goods from the domestic producers. However, since the last couple of months apparel imports from Bangladesh is estimated to have fallen around 60 to 70 per cent.

When the duty free imports were allowed, many retailers were contemplating upon shifting manufacturing to Bangladesh to take advantage of the low labour and production cost there. Bangladesh has also been eating into India’s export market share in finished textile products since 2009. Bangladesh’s apparel exports are growing at 16 per cent while India’s apparel exports in 2010-11 grew by just four per cent.