What Exactly Happened?
Protesters in Bangladesh took to the streets against a quota system that gives 56 pct of government jobs to certain groups, including 30 pct to descendants of fighters who fought in the 1971 War of Independence. This seriously reduced the opportunities available to the youth, furthering unemployment. Under immense pressure from an earlier student mobilization over the issue, Hasina abolished the entire quota system in 2018. But in June 2024, the country’s high court ruled that the move was illegal, sparking a fresh round of protests across the country. More than 100 people have been killed in the protest. Agitation continued to mount with the closing of schools, imposition of a curfew, and cutting off communications. Facing mounting pressure and a large protest march toward Dhaka, Prime Minister Hasina resigned and fled the country.
Export to Bangladesh by India
As per reports, India’s exports to Bangladesh is about ~USD 11.2 bn which contributes to approx. 2.6 pct of total export. India’s exports to Bangladesh dropped to USD 11 bn in 2023–24 from USD 12.21 bn the previous year, and imports decreased to USD 1.84 bn from USD 2 bn. India’s exports include vegetables, coffee, tea, spices, sugar, refined petroleum oil, iron, cotton, steel, chemicals, and vehicles. In contrast, Bangladesh’s exports to India are heavily concentrated, with textiles, garments, and made-ups accounting for 56 pct of the total export value.
Also read: Common Mistakes to Avoid while filing ITR
Indian Companies with Operations in Bangladesh
Marico –
The company’s international sales contribute ~44 pct of sales and 12 pct of overall sales. However, Marico is aiming to reduce its Bangladesh contribution to 40 pct by FY27E.
EMAMI, Dabur, Britannia, and Godrej CP –
Approximately 2–5 pct of the total income comes from Bangladesh.
VIP Industries –
VIP has 8 manufacturing facilities in Bangladesh, which contribute 35 pct of the production capacity.
Hero MotoCorp –
The company has a manufacturing facility in partnership, that has a capacity of 1,20,000 PA.
Jubilant Food –
Domino’s Pizza operates 28 stores in Bangladesh.
Asian Paints –
The company commands approximately 18 pct market share in Bangladesh.
GRSE –
Recently, the company got 2 big ticket orders worth USD 21 mn and 16.5 mn from Bangladesh.
RITES –
The company had secured Rs. 9.06 bn of orders from Bangladesh.
NHPC and BHEL –
These companies are constructing a 1320 MW coal-based power plant in Bangladesh via JV which is known as Rampal Power Station.
Also read: Union Budget 2024-25: Key Announcements and Their Impacts
Opportunity for India
Bangladesh’s textile exporters face the risk of losing business amid political instability. However, the crisis offers a significant opportunity for India’s textile and garment manufacturers to capture greater market shares. Companies like Gokaldas Exports, KPR Mills, Arvind, Wardaman Textiles, and Welspun Living’s stock prices moved up as market sentiment on Indian suppliers has been boosted.
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