Bangladesh exports to India reach $1b in H1 FY23

Thanks to a strong marketing strategy and increasing business-to-business (B2B) relations, Bangladesh achieved $1 billion in export earnings from the Indian market in the first half of FY2022-23.

This came at a time when the global economy is going through a major crisis and record high inflation due to the ongoing Russia-Ukraine war.

Earnings from the Indian market have been significantly rising since FY2021-22 when exporters started to enter the Asian markets to reduce dependency on the western ones to avoid crises.

According to the Export Promotion Bureau (EPB), the country earned $1.14 billion in the July-December period of FY23, posting 7.31 per cent year-on-year growth. The apparel sector, which produces the leading export items, holds a 48.20 per cent share of the earnings.

The total amount is 9.89 per cent higher than the target and 4.17 per cent of the total export earnings during that period.

Industry insiders said that though the progress will help to reduce the trade deficit with India, the earnings and growth are still not enough considering their market size and opportunities.

Many non-tariff barriers imposed by the Indian government and the limited export basket size are holding back the growth of earnings. If Bangladesh moves according to plan and increases the basket size, the earnings will rise exponentially, they said.

Bangladesh Garment Manufacturers and Exporters Association President Faruque Hassan told The Business Post, “As part of our apparel diplomacy, we are trying to increase business relations with India.

“We have found some barriers to boosting exports and already informed the governments of both countries.”

Apparel played vital role

EPB data showed that the apparel sector earned the highest by exporting goods worth $549 million in the first six months of FY23, posting 50.02 per cent year-on-year growth.

During the period, the woven and knit sectors earned $296 million and $253 million, respectively. The sectors earned $204 million and $162 million, respectively, during the same period last year.

Apparel manufacturers said that as a neighbouring county, Bangladesh can export garment items worth billions of dollars to India but many limitations are creating barriers. However, Indian buyers are now also showing high interest in increasing imports from Bangladesh and that can help to achieve the goal.

Energypac Fashions Director Humayun Rashid said, “India is a big market and we need to take steps to cash in on this opportunity. We cannot use all land ports, export through railways is yet to start and our marketing strategy is not of a higher standard.”

“Also, we are still facing many non-tariff barriers that are holding us back,” he said and urged the government to solve the issues as soon as possible since that can increase export earnings rapidly.

Faruque said, “After the end of this fiscal year, we hope to earn more than $1 billion through the apparel sector from this market and the figure will cross $2 billion soon.”

Anti-dumping duty

Bangladeshi jute goods exporters said that there is a huge demand for their products in India but they are struggling to export and meet it due to the anti-dumping duty, which the Indian government imposed in 2017.

That is why Bangladesh now exports raw jute to this market but still managed to earn $115 million in the first six months of FY23, posting 11.77 per cent year-on-year growth. This is also the second-highest earning after apparel.

Talking to The Business Post, Bangladesh Jute Goods Exporters Association Director Esrat Jahan Chowdhury said, “We failed to fully cash in on the export opportunity to India because of the anti-dumping duty on jute goods. We have talked with the government several times to solve the issue but the result is yet to come.”

The sector may earn an additional $300 million annually if the barrier is removed, said the Tulika Eco chief executive officer.

Other sectors also performed well

Leather and leather goods, another major export sector for Bangladesh, earned $53.83 million during the first six months of FY23, posting 27.32 per cent year-on-year growth.

Besides, the plastic and cotton products sectors also earned $32 million and $20 million, respectively.

Tajin Leather Corporation Managing Director Ashikur Rahman said, “We could not export leather to India, or even other countries, as expected due to the Leather Working Group certification issue. But the footwear products are boosting exports.”

“Our government should provide more business-friendly policy support to increase earnings from footwear and leather,” he added.