The Bangladesh ready-made garment sector, the backbone of the nation’s economy, is experiencing its worst crisis ever. Recent closure of India’s trans-shipment facility has rocked the industry, potentially jeopardizing its existence. It not only disrupted the supply chain but also hinted at the sustainability of Bangladesh’s apparel exports in the long run.
The garment industry of Bangladesh, which consists of nearly 80% of the total exports of the country, has been totally dependent on the transport system of India for transporting goods to Indian ports and then exporting them abroad. The trans-shipment facility provided Bangladeshi exporters with an opportunity to save time and money by exporting their goods through Indian ports, thus establishing themselves in the international market. But after the abrupt suspension of this facility, Bangladeshi garment exporters are now experiencing huge problems.
The immediate consequence of this development has been a significant rise in transport charges. Bangladeshi exporters are now compelled to use substitute routes, which tend to be more circuitous and costly. This has led to an increase in production costs, making it difficult for the manufacturers to sustain their margins. Further, the uncertainty as to the fate of the trans-shipment facility has caused investor confidence to slide further, adding to the woes.
The Bangladesh apparel sector’s problems are aggravated by the fact that it is already dealing with serious competition from other low-cost garment-exporting nations. Its survival depends on it staying competitive, which is presently threatened by the higher transport costs. In addition, the reputation of the industry as reliable and on-time is also threatened, as any delay in shipment can cause order cancellation and loss of customers.
The Bangladesh government needs to take immediate action to mitigate the crisis. One possible solution is to negotiate with the Indian government to restore the trans-shipment facility or explore alternative arrangements that can minimize the disruption. Another option is to invest in developing Bangladesh’s own transportation infrastructure, including ports and logistics facilities, to reduce dependence on neighboring countries.
In summary, the closure of India’s trans-shipment facility has caused a serious setback to Bangladesh’s ready-made garment sector. The fate of the industry rests on the government’s capacity to come up with a quick solution to the crisis. If not addressed, the impact could be extensive, with the possibility of losses in exports, revenue, and employment. The government should take immediate action to safeguard the industry and help it grow and remain competitive in the international market.