Bangladesh bypasses India, routes textile exports via Maldives
Bangladesh, the world’s second-largest garment producer, has chosen to bypass India and route its textile exports through the Maldives, potentially impacting the cargo revenue of Indian airports and ports.
The shift comes at a time of strained relations between India and Bangladesh, according to a report by India's Mint.
The Indian business daily, citing sources familiar with the development, reported that Bangladesh is now shipping its textile exports by sea to the Maldives before dispatching them by air to international buyers, including major brands like H&M and Zara.
“Earlier, Bangladeshi goods were transported through Indian airports, but now shipments are being rerouted,” said Deepak Tiwari, managing director of MSC Agency (India) Pvt Ltd, in a phone interview with Mint. He noted that this change results in lost revenue for India’s airports and ports, which previously benefited from handling these shipments.
The Mediterranean Shipping Company (MSC), a prominent player in global container shipping, is facilitating this new route. According to Mint, the redirection of exports could weaken trade ties and reduce opportunities for collaboration between India and Bangladesh in areas like logistics and infrastructure.
Furthermore, India stands to lose revenue from port and transit fees, as well as business generated from Bangladeshi exports that traditionally passed through Indian ports.
In response to the situation, the Indian government is reportedly seeking a balanced approach to protect its interests. One source explained that a significant portion of Bangladesh’s textile production occurs in factories owned or managed by Indian companies. The government is assessing the impact of these changes on India’s trade and manufacturing interests.
Bangladesh’s textile sector is vital to its economy, accounting for 80 percent of its export earnings and contributing 13 percent to its GDP. Industry experts cited by Mint suggest that Bangladesh’s decision was influenced by a desire to have greater control over its supply chain and to avoid delays at Indian airports, which can disrupt shipment schedules.
“This new route gives Bangladesh a strategic advantage and improved reliability, which is crucial for meeting tight international deadlines,” said Arun Kumar, president of the Association of Multimodal Transport Operators of India. He added that garments are time-sensitive and any delay could lead to rejected consignments, as out-of-season deliveries lose their market value.
Despite concerns over lost revenue, some Indian textile exporters expressed a different view. “There’s not much to read into this,” said Anil Buchasia, an executive member of the Apparel Export Promotion Council’s eastern region, emphasizing that Indian airports are already congested. He added that exporters had requested the government to limit Bangladeshi textile shipments through Indian facilities.
Speculation about the decision being linked to political developments was dismissed by a third source. The person clarified that it is unrelated to former Bangladeshi Prime Minister Sheikh Hasina’s stay in India following an arrest warrant issued by the International Crimes Tribunal in Bangladesh. “The move appears to be an economic decision aimed at bolstering Bangladesh’s crucial textile exports,” the source said.
In FY24, Bangladesh’s garment exports dropped by 4.34 percent to $44.47 billion, primarily due to reduced shipments of readymade garments, according to Bangladesh Bank. The decline highlights the broader economic challenges facing the country.
