As the monsoon rains lashed the streets of Dhaka, Reza, a 24-year-old engineering graduate, found himself standing shoulder-to-shoulder with thousands of other young professionals. His dreams of securing a stable government job had just been dashed by the announcement of a controversial job quota system—one that seemed to reward heritage over merit.
“Why should I be punished for not being born to a war veteran?” he asked as the crowd around him chanted for change. What began as isolated frustrations soon transformed into a nationwide movement demanding fairness, justice, and, ultimately, the resignation of Prime Minister Sheikh Hasina. By the time the floodwaters began to rise, so too did the country’s anger, spiraling Bangladesh into a crisis that would shake its political and economic foundations.
The ongoing crisis in Bangladesh has severely impacted its garment industry, which contributes around 80% of the country’s exports. A combination of political unrest, labor disruptions, and widespread flooding has led to factory closures, delays in shipments, and significant financial losses.
The Bangladesh Textile Mills Association has projected losses of around USD 58 million, with backlogs at major ports like Chattogram stretching to over a month. The industry, which had reached export highs of nearly USD 46 billion in 2023-24, now faces steep declines due to these disruptions. Additionally, the sector’s workforce, which directly employs over 4 million people, is facing growing uncertainty as production and logistics remain strained.
These issues have forced many factories to rely on expensive air freight, further increasing costs, while some foreign investors are considering alternative markets in other South Asian nations.
Bangladesh represents a significant market for Indian yarn, contributing to 25-30% of India’s total yarn exports. In FY24, these exports amounted to $1.3 billion. However, the ongoing crisis in Bangladesh could lead to disruptions in this trade, potentially affecting export revenues and profit margins, according to a release by the agency. Prolonged instability may result in reduced earnings and compressed margins in these key export markets.
The overall effect on India’s trade and economy is expected to be minimal, as trade with Bangladesh—comprising both exports and imports—accounts for only 1.2% of India’s total trade volume.
On the other hand, the crisis offers Indian fabric and garment manufacturers a chance to increase their export market share.
The main markets for Bangladeshi textile goods include the European Union, the United States, Canada, Australia, and Japan. Due to recent disruptions and factory closures, garment exports could see a potential decline of 15-20% for the upcoming summer season (January-March 2025). Acuité Ratings highlighted that this situation could create both short- and long-term opportunities for Indian garment exporters if the crisis continues for an extended period.
Bangladesh could face a severe foreign exchange shortage, limiting its ability to pay for imports. According to the report, this may result in delays for Indian exporters in receiving payments for their goods. Such financial difficulties could further strain trade relations and contribute to a decline in export volumes.
Political unrest typically results in stricter security at borders, which can slow down the movement of goods and increase trade costs. This disruption may affect both imports and exports with Bangladesh, potentially reducing the competitiveness of Indian products, the report noted.
For India, the ongoing crisis underscores the importance of robust contingency planning and the advantages of pursuing diversified trade partnerships. While the immediate effects pose significant challenges, they also create opportunities for Indian businesses to innovate and adapt to evolving global market dynamics. Solutions provided by companies like Sahyog Logistics can be instrumental in this transition, enabling businesses to manage disrupted supply chains with enhanced confidence and agility.
As Bangladesh works to regain stability, the global community remains vigilant. The nation’s ability to recover and rebuild its economy and infrastructure will be a critical factor in determining its future. Meanwhile, businesses worldwide must carefully navigate the immediate challenges while making long-term strategic adjustments. Leveraging advanced logistics technology will be essential for maintaining resilience in an increasingly complex global supply chain environment.