Bangladesh’s garment shipment to the US grew only 3.41 per cent in the first quarter of the fiscal year. The US is Bangladesh’s single largest export destination. With the emergence of India, Bangladesh is now the sixth biggest apparel exporter to the US, down from fourth spot even a few months ago.
India’s garment sector is fast becoming a formidable opponent for Bangladesh on the global stage. After India gave a stimulus package for its garment sector and devalued its currency, the prices of apparel items of both Bangladesh and India are almost equal, although labor cost in India is higher than in Bangladesh. Many retailers have started sourcing garments in high volumes from India.
Bangladeshi exporters are handicapped by infrastructural challenges, due to which goods cannot be delivered to retailers on time. Apart from India, other countries like Vietnam, Pakistan and even Mexico are gaining ground in the market. Vietnam has been performing well in the US as many American companies invested in the Southeast Asian country after it was included in the Trans-Pacific Partnership free trade pact. The US has withdrawn from the pact but US investors have remained in Vietnam. Exports from Bangladesh have to face 15.62 per cent duty for entry to the US.