Bangladesh situation to hurt India’s cotton exports; trade impact not so high

Bangladesh a major cotton exporter from India

The political crisis in Bangladesh may not have a significant bearing on India’s trade, but will certainly weigh heavy on India’s cotton sector, a Moneycontrol analysis of data shows.

India exports $2.4 billion worth of its cotton to Bangladesh, which has emerged as a textile centre for the world.

According to ministry of commerce data, the share of Bangladesh in India’s overall cotton exports doubled from 16.8% in FY13 to 34.9% in FY24. Raw cotton exports accounted for a fourth of India’s total exports to the country in FY24.

Bangladesh was the top destination for India’s cotton exports in FY24, accounting for over twice as many exports as China, which is the second biggest importer of Indian cotton.

Prime minister Sheikh Hasina quit her post and fled the country on August 5, with the Army chief announcing the formation of an interim government.

While Bangladesh accounts for a small proportion of India’s exports, its share has been rising with exports nearly doubling over a decade.

The two major commodities driving India’s exports to Bangladesh are cotton and fuel, with each accounting for a fifth of India’s total exports.

In FY24, India exported $11 billion worth of products to the country or 2.5 percent of its total exports—an increase from 1.7% in FY13.