Lilliput’s non-payment a spanner in Indo-Bangla trade ties

Non-payment of about 4 million dollars

(Rs 21 crores) by Lilliput Kidswear to about two dozen small Bangladeshi garment exporters may spoil the trade agreements between the two countries. Bangladesh has now urged the UPA government's intervention to secure the outstanding payments for 22 small Bangladeshi garment exporters from New Delhi-based Lilliput for supplies made two years ago. The trade had taken place prior to a 2011 public spat between Lilliput's promoters and its private equity investors, Bain Capital and TPG.

Bangladeshi officials have accused that Lilliput missed several deadlines to make payments, the latest one being January 7 and such an action by the retailer has sent out a very bad signal to the exporters of Bangladesh, who now feel that India is not a safe country to do business.

Readymade garments account for about 20 percent of India's total imports from Bangladesh. While the large Bangladeshi enterprises export mainly to the US and the European Union, the small and medium ones export to India. Readymade garments account for a huge share of 80 percent of Bangladesh's total annual exports.