Today let’s take a deep in the what happening in Bangladesh and how will this Bangladesh prices impact the FMCG industry working over there and the Indian companies behind them.
Bangladesh prime minister Sheikh Hasina flood Dhaka after ruling and being in power for around 15 years as per various report she is now residing at an unrevealed location in India after landing at the Hindon airbase on Delhi outskirts.Bangladesh has seen these of protest and violence then so moves and people destroying Hasina’s homes and Mujib’s memorial. Attacks on Awami league , her party and her properties have seen minorities particularly Hindus being targeted for the same.
On Tuesday a few senior positions in the military were shuffled and the student protesters said they would not support any military – backed government.As on Tuesday the city appeared calmer than the previous days with no reports of new violence; as the active protesters thronged the ousted leaders residence . Finally the Dhaka airport resumed operations after an eight hour suspension.
EFFECTS ON FMCG INDUSTRY
Now coming on the point how the turmoil in Bangladesh has affected the FMCG industry and the major market stakeholders which are Indian companies. Bangladesh internal concrete has left the countries economic activities in a pit with the leading rating agencies saying that the …
The textile industry has become a major sector of Bangladesh economy representing 80% of its exports and 15% of its GDP. The primary markets for Bangladesh textile goods are the European union, United States, Canada, Australia and Japan .Hence there can be potential 15% decline in these exports for the next summer season due to the recent turmoil. This can both be a short and long term opportunity for the Indian textile exporters if the crisis doesn’t dissipate in the near future and the interim government fails to be successful for the short period. This could be considered as a posting sign for the Indian textile industry.
However looking from the other side of the coin, Bangladesh is a major market for the Indian yarn ,accounting for around 30% of the totally exports hence if the crisis persists for a longer period,the exports which stood around 1.3 billion US dollar in the financial year 2024 may finally decline leading to lower profit margin in the export market.
In a nutshell, the current turmoil in Bangladesh could be viewed as an opportunity from one side and a threat from another point of you, the current scenario may lead to deferment of investments and stake by the Indian companies in Bangladesh. The proposed free trade agreement FTA with Bangladesh will also be put on hold considering the current scenario. The best is to look forward to get the turmoil settled at the earliest and hoping for a better market ahead.
