Export News

The political turmoil in Bangladesh has slowed down exports of gem and jewellery, imitation jewellery, engineering goods and oilmeals from India. The raw cotton, cotton yarn and textiles exporters are facing delays in payments, even though the buyers are depositing payments in local currency Bangladeshi Taka. However, due to dollar shortage, banks are finding it difficult to convert Taka into dollars, resulting in payment delays. Pankaj Chadha, chairman of the Engineering Exports Promotion Council said \"Private orders have come down and the Bangladesh government\'s perception of India has turned negative. We are not getting any government orders from Bangladesh. Additionally, Indian banks are not accepting letters of credit, a contractual agreement between a buyer\'s bank and a seller\'s bank that guarantees payment to the seller for goods or services, issued by Bangladesh\'s banks. So the situation seems to be quite volatile.\" Engineering exports to Bangladesh in the first seven months of FY25 have fallen by 8% to $1195.6 million. Security has been beefed up in the Petrapole-Benapole checkpoint, through which goods travel from India to Bangladesh and vice versa. Vipul Shah, chairman of the Gem & Jewellery Export Promotion Council (GJEPC) said that exports to Bangladesh have slowed since the political disturbance in Bangladesh flared up. Exports to Bangladesh have fallen by 11.1% in the April to September period of FY25 as compared to the same period last year. \"Bangladesh was developing as a new destination for gem and jewellery exports from India in the last two years. But the current situation is volatile and impacts exports,\" said Shah. Trade sources say that gems and jewellery manufactured in India are largely routed to Bangladesh through Dubai to avoid the high import duty that Bangladesh has imposed on Indian gems and jewellery. Bangladesh is also a big market for Indian imitation jewellery. Nagendra Mehta, president of imitation manufacturers association said that imitation jewellery exports to Bangladesh have fallen by 35% in the last six months. The political unrest in Bangladesh has also impacted exports of oilmeals from India. The neighbouring nation uses oil meals for animal feed. Bangladesh imported rapeseed meal and soybean meal of 428,241 tons in the first seven months of FY25 as compared to 506,934 tonnes in the same period last year. Atul Ganatra, president of the Cotton Association of India (CAI) said \"So far export of raw cotton and cotton yarn is going on smoothly there is no big impact seen because the manufacturing of garments is the main business of Bangladesh. I don\'t think they will disturb this business. Few banks are paying in time and few banks are having a shortage of dollars, even though the buyers are depositing payments to the bank in local currency in Taka some banks are finding it difficult to convert Taka into dollars. This is delaying the payment to the Indian exporters.\" Sanjay Jain, chairman of the Indian chamber of commerce national committee on textiles said that the delay in payment is varying between 60 -90 days. Ganatra said that Bangladesh spinning mills are dependent on Indian cotton. \"Exporting cotton to Bangladesh will go as usual without any big problem. Few Kolkata traders have godowns in Bangladesh and they keep stock in godown and give immediate delivery against payment,\" the CAI president said \"As of now, there are no such border problems. Exports of goods through ships and by road are going on smoothly. Most Bangladesh mills are having hand to mouth and very low inventory of cotton so they cannot afford any kind of such issues,\" Ganatra added. Ajay Srivastava, founder of think tank Global Trade Research Initiative (GTRI) said \"The economic troubles brewing in Bangladesh since July 2024 have begun to show tangible impacts on its trade. Cotton yarn, a vital input for Bangladesh\'s textile industry, remains India\'s top export to the country. In August 2024, India\'s cotton yarn exports to Bangladesh increased by 29.6% year-on-year (yoy), rising from $97.2 million in August 2023 to $125.9 million. A similar, albeit smaller, increase of 5.4% was recorded in September 2024, with exports growing from $134.3 million in September 2023 to $141.5 million. These figures suggest that Bangladesh is making considerable efforts to sustain its crucial textile industry, which relies heavily on imported raw materials.