Bangladesh is set to become the largest importer of cotton from India. Over the past two years, cotton trade between the two neighbors has increased. In March 2016 a whopping 49 per cent of Bangladesh’s cotton imports were from India. Bangladesh’s booming readymade garment industry has seen a constant rise in demand for cotton fabric.

On the other hand global giants like the US and China have shifted their cotton imports away from India. China’s falling demand for Indian cotton can be attributed to a discernible shift from labor-intensive industries due to fluctuating prices. At the end of the 2014-2015 fiscal year, the net import value of cotton in Bangladesh was 8.8 per cent of global imports and the second highest globally. India was the second highest exporter of cotton globally, valued at 13.8 per cent of global exports. In the 2015-2016 fiscal year, Bangladesh was also the largest cotton importer in the world, with an approximately 18 per cent market share.

Bangladesh is poised to become a regional garment hub because of low costs, availability of semi-skilled manpower, flexible labor regulations, and most importantly duty-free access to lucrative markets such as Europe and the US due to its status as a least-developed country.