India, Myanmar situations diverting business to Bangladesh

India's grim coronavirus situation and Myanmar's deepening political crisis following the military takeover have prompted international retailers and brands to divert work orders to Bangladesh, The Daily Star reported

May 19, 2021
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India and Myanmar flags

India's grim coronavirus situation and Myanmar's deepening political crisis following the military takeover have prompted international retailers and brands to divert work orders to Bangladesh, The Daily Star reported.

After a record spike in Covid-19 caseloads and deaths linked to the virus in recent months, Bangladesh is now witnessing a relatively calm situation than many other countries in the region, including India, thanks to the nationwide partial transport lockdown.

Mass protests have been taking place across Myanmar since the military seized control on February 1. Hundreds of people, including children, have been killed, reports the BBC.

In India, a devastating second Covid-19 wave has overwhelmed the country's hospitals and crematoriums, and there have been widespread shortages of oxygen and medicines.

One indication of work orders shifting from the neighboring countries has become apparent in Bangladesh’s export earnings between last July and April this year.

Receipts from merchandise exports rebounded in March, rising 12.59 percent year-on-year to USD 3.07 billion. This was also mainly on the back of relaxed lockdowns in the West, leading to a slow recovery in garment shipments over the preceding few months.

The recovery of export continued in April, with earnings from merchandise shipment logging a significant rebound.

Export earnings rose six times year-on-year to hit USD 3.13 billion in April, thanks to the rebound of apparel shipment after the reopening of the US and European economies.

In the 10 months to April, garment shipment increased by 6.24 percent year-on-year to USD 26 billion.

Of the total earnings from the garment sector, USD 13.99 billion came from the export of knitwear items, which registered a 15.34 percent year-on-year growth. Earnings from woven shipment fell 2.71 percent to $12 billion.

"It is true that work orders are shifting to Bangladesh from Myanmar," said a European buyer in Bangladesh, asking not to be named.

He could not state the exact percentage of work orders that had shifted in favor of Bangladesh. However, he said Bangladesh was receiving a major share of such contracts.

Speaking about India, the buyer said the diversion of orders to Bangladesh had been a temporary measure in response to the Covid-19 fallout as India was a major sourcing hub for his company.

Md Saiful Islam, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh, said the sector had been receiving an increasing number of work orders over the last couple of months.

"Many leather and leather goods companies have shifted orders from Myanmar to Bangladesh because of the political uncertainty," he said.

The increase has significantly helped the recovery of Bangladesh's leather and leather goods shipments recently.

Earnings from leather and leather goods shipment were up 8.56 percent year-on-year to $760.92 million between July and April.

"The shift has had little impact on Bangladesh's garment sector," he said, adding that the placement of work orders in India had slowed a bit due to Covid-19.

(SAM)

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