Paper: GS-III, Subject: Economy, Topic: Trade and External sector, Issue: EU Textile Exports: Bangladesh vs India
Context:
The potential for India to surpass Bangladesh in textile exports to the European Union (EU), particularly in light of recent trade agreements and changing market dynamics.
Two major changes are creating an opportunity for India:
- India–EU Free Trade Agreement (FTA) (duty reduction)
- Bangladesh likely to lose Least Developed Country (LDC) status by 2029
Key Highlights and Data
Textile sector: One of India’s largest employers in manufacturing.
- India’s woven garment exports to EU fell from ~$3.5 billion to ~$2.9 billion.
Bangladesh dominates in: Knitted/crocheted garmentsandWoven apparel
Indian garments have higher per-unit prices, which may mean:
- Better quality/value-added products
- OR higher production costs (less competitive pricing)
Example: Vietnam’s textile exports surged after EU-Vietnam FTA (2020).
India has a timely opportunity to gain ground in the EU textile market as Bangladesh loses LDC benefits and the India-EU FTA reduces tariff disadvantages. Success will depend on strategic reforms, cost competitiveness, and effective use of India’s strengths in the coming years.
Source: (The Hindu)
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