Bangladesh’s imports from India have been increasing as local manufacturers and industries seek to minimize lead times and maintain competitiveness in the global supply chain. Shorter delivery times from India are becoming a crucial factor for businesses, especially as international retailers and brands reduce their production timelines.
Data from Bangladesh Bank shows that imports from India rose by 2.09% year-on-year, reaching $2.36 billion in the October-December quarter of 2024, compared to $2.04 billion in the same period the previous year. The total value of Indian imports in FY24 stood at $9 billion, following a slight decline from $9.94 billion in FY23.
Among the key imported commodities are cotton, fabrics, yarn, and various chemicals. Cotton remains one of the most significant imports, with more than half of Bangladesh’s annual $3 billion cotton imports sourced from India. The volume of Indian cotton imports increased from $1.92 billion in FY23 to $2.36 billion in FY24. Other imported goods include handloom products and both organic and inorganic chemicals.
Industry representatives attribute the rise in Indian imports to several factors, including geopolitical shifts, global inflation, and disruptions in the supply chain due to past political and labor unrest. The ease of access to Indian goods and cost-effectiveness further encourage businesses to prioritize imports from India over other sources such as Africa, Latin America, and the United States.
The demand for Indian imports has grown significantly since international clothing retailers and brands began halving lead times from 90 days to approximately 45 days. Industry experts note that importing cotton from India takes only two to three days for delivery, compared to at least 45 days for shipments from other regions. This time advantage plays a crucial role in maintaining supply chain efficiency.
Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA), highlighted that changing global business trends have made reliance on Indian imports increasingly necessary. He pointed out that the cost-effectiveness and availability of essential materials from India provide a strategic advantage for local manufacturers.
Md Abdul Wahed, joint secretary general of the India-Bangladesh Chamber of Commerce and Industry, emphasized the role of operational ports and tightened border security in ensuring smoother trade through formal channels. With 24 land ports, three rail ports, and access via air and sea routes, trade between the two countries has become more streamlined.
Additionally, financial challenges such as the US dollar shortage in Bangladesh have led some businesses to prefer Indian suppliers, as banks in other countries have become more cautious about processing letters of credit (LCs) for Bangladeshi importers.
Despite the steady rise in imports, Bangladesh has yet to fully capitalize on duty-free trade benefits with India. Export data from the Export Promotion Bureau (EPB) of Bangladesh indicates that Bangladesh exported $970 million worth of goods, primarily garments, to India in the first half of the current fiscal year. The total export value for FY24 was $1.56 billion, reflecting an 11.63% decline from the $1.77 billion recorded in the previous fiscal year.
Experts note that while the geographical proximity and established trade relationships between the two countries provide an advantage, further diversification of Bangladesh’s export offerings could enhance trade balance and overall economic cooperation. The continued expansion of trade ties between Bangladesh and India is expected to play a significant role in shaping regional economic dynamics, particularly as both nations navigate evolving global market conditions.
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