Finance Minister addresses concerns over instability in garment industry
India’s garment sector is experiencing unease due to recent political upheaval in Bangladesh, according to Finance Minister Nirmala Sitharaman. Speaking at a press briefing after an RBI board meeting, the Minister acknowledged “a bit of uncertainty” impacting textile exports to the neighboring country.
Bangladesh has long been a major manufacturing hub for India’s textile businesses. Many companies, including several from Tamil Nadu, established production facilities there to capitalize on lower costs and tap into the country’s growing export market. However, the resignation of Prime Minister Sheikh Hasina and dissolution of Parliament earlier this week has created instability.
Sitharaman emphasized that Indian investments in Bangladesh were made “in good faith” and had proven widely beneficial for both economies. Two-way trade between the nations reached $13 billion last fiscal year. She remains hopeful the interim administration will resolve issues promptly to restore calm. The situation is still developing, but the Minister is monitoring potential economic effects closely.
According to the Finance Minister, Bangladesh’s garment industry accounts for over 80% of merchandise shipments overseas. It also supports a significant portion of India’s textile exports. Any prolonged disruption could negatively impact both countries. She expressed confidence, however, that safeguarded borders will allow commerce to continue smoothly.
The textile sector will await further normalization in Bangladesh. In the interim, the government is assessing fallout for Indian operations and positioning to assist affected businesses if needed. Overall, a swift resolution of political matters appears crucial to reassure regional partners and markets on both sides of the border.
