Bangladesh features some readymade lessons for India

Image collected
Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 as a result of the negative result of covid-19. But, it remains to export considerably more readymade garments than India. What can India study from Bangladesh upon this front? Mint requires a look

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 as a result of the negative effect of covid-19. But, it goes on to export even more readymade garments than India. What can India study from Bangladesh on this front? Mint requires a look.

When did Bangladesh’s exports overtake India?

This happened in 2006-07, when Bangladesh exported readymade garments worth $9.21 billion and Indian exports stood at $8.89 billion. In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion, while that of India fell by 4% to $15.48 billion. According to a paper titled What explains India’s poor performance in garments exports? by Saon Ray of Indian Council for Research on International Economic Relations (ICRIER): “Bangladesh produces basic apparel such as for example t-shirts, shirts in bulk... While India manufactures top-notch top quality woven and knitted goods." Covid has struck low-end exports more.

How did Bangladesh become competitive?

Among the major known reasons for Bangladesh’s competitiveness is that it is cheaper to produce goods in Bangladesh than found in India. Regarding to a working paper titled Automation and Foreseeable future of Garment Sector Careers: A Case Study of India compiled by Pankaj Vashisht and Nisha Rani of ICRIER: “The machine labour cost of making a cotton shirt in america is around $7, as the unit labour cost of creating the same shirt in India comes at around 50 cents, whereas in Bangladesh the machine labour cost is merely 22 cents." Thus giving Bangladesh a competitive advantages over all of those other nations, including India.

What helps Bangladesh in producing cheap goods?

In line with the Economic Study of 2019-20: “Bangladesh… [has] more than 80% of market worth of exports by large enterprises, India has 80% by tiny enterprises." Readymade garment exporters in Bangladesh, as a result, have economies of level. Likewise, Bangladesh’s exports to the European Union and Canada are mainly duty-free.

Why do Indian garment exporters lack scale?

As being T.N.Ninan writes found in The Switch of the Turtoise: “Rigid laws prevent overall flexibility in manning for a seasonal industry… India offers only 3 or 4 garment makers with turnover in excess of $100 million." Consequently, the turnaround time of Indian firms from buy to delivery is 63 days. In Bangladesh, this turnaround period is much less at 50 days. Also, it takes only 1 working day for a consignment to attain a interface in Bangladesh. In India, normally it takes as much as 10 times for a consignment to attain a interface. All such factors will be barriers to creating level.

What can India study from  Bangladesh?

So that you can increase exports of readymade garments, Indian firms will have to grow bigger. It is also worthwhile noting that if there will be more careers in the garments sector, it will provide a working chance of women. Increasing work for women leads to several rewards. As the Economic Study of 2016-17 points out: “In Bangladesh, woman education, total fertility level, and women’s labour force participation moved positively because of expansion of the apparel sector. 
Source: https://www.livemint.com

Tags :

Share this news on:

Previous Story

Trending Topics

Archive