Last fiscal year, Bangladesh’s garment shipments to India fell 4.85 per cent year-on-year. One reason is Indian manufacturers are producing the same clothes at cheaper rates. Also Indian importers are not interested in sourcing from Bangladesh because of the 12.5 per cent countervailing duty, an import tax imposed on certain goods in order to prevent dumping or counter export subsidies.

Moreover, previously, India did not allow big industrial groups to invest in garment manufacturing industry but now they are not restricted in printing, dyeing, weaving, spinning or finishing. They can also set up garment manufacturing factories. Therefore, the Indian garment sector has been growing in stature every year and its market share worldwide is also increasing. Since both Bangladesh and India are strong in producing the same kinds of garments, demand for Bangladeshi goods in India is low.

The country will now export goods to India in which it has an advantage and India doesn’t. Not only garments, but also Bangladesh’s overall exports to India has declined in fiscal 2016-17. On the other hand, imports from India have been swelling every year.