Garment sector facing 'bit of uncertainty' due to Bangladesh crisis: FM Sitharaman

Union finance minister Nirmala Sitharaman

Weighing in on the recent events in Bangladesh, Finance Minister Nirmala Sitharaman on August 10 said that India's garment and knitted fabric sectors are facing a "bit of uncertainty" around their investments in the neighbouring nation.

"I have held discussions on our textile garment investments in Bangladesh, many of which are from Tamil Nadu. The investments went there in good faith and they did well having gone there; exports from Bangladesh had also increased."

"The garment and knitted fabric sector is currently seeing a bit of uncertainty. I hope all the investments are safe," Sitharaman said.

In the short term, Indian textile companies that invest in Bangladesh’s ready-made garment industry, are expected to face challenges in maintaining their production flows.

However, the FM added that it would be too early to comment on the impact of the turmoil in Bangladesh on India's overall economy.

While the ready-made garments sector is the single biggest export earner for Bangladesh, it was only 3.35 percent of India’s total outbound shipments in FY24.

At nearly $47 billion, ready-made garments constituted 84.6 percent of Bangladesh’s total exports in 2022-23.

Indian exports of all categories of textiles dropped 3.23 percent on-year to $34.40 billion in FY24, as per commerce ministry data. New Delhi's exports to Bangladesh also includes textiles apart from machinery, electronics, auto parts, iron and steel, electricity and plastics.

The finance minister said that she hoped that the interim government in the neighbouring country will settle things soon so that the situation returns to normalcy.

Bangladesh’s interim leader, Nobel laureate Muhammad Yunus, was sworn in as the interim head of government on August 8, following the ouster of Sheikh Hasina’s government earlier this week.