Bangladesh has some readymade lessons for India

[Black_cats]

In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion
Bangladesh has some readymade lessons for India
2 min read . 08 Jul 2020

Vivek Kaul

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look.

When did Bangladesh’s exports overtake India?

This happened in 2006-07, when Bangladesh exported readymade garments worth $9.21 billion and Indian exports stood at $8.89 billion. In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion, while that of India fell by 4% to $15.48 billion. As per a paper titled What explains India’s poor performance in garments exports? by Saon Ray of Indian Council for Research on International Economic Relations (ICRIER): “Bangladesh produces simple apparel such as t-shirts, shirts in bulk... While India manufactures superior quality woven and knitted products." Covid has hit low-end exports more.

How did Bangladesh become competitive?

One of the major reasons for Bangladesh’s competitiveness is that it is cheaper to produce goods in Bangladesh than in India. According to a working paper titled Automation and Future of Garment Sector Jobs: A Case Study of India written by Pankaj Vashisht and Nisha Rani of ICRIER: “The unit labour cost of producing a cotton shirt in the United States is around $7, while the unit labour cost of producing the same shirt in India comes at around 50 cents, whereas in Bangladesh the unit labour cost is only 22 cents." This gives Bangladesh a competitive advantage over the rest of the nations, including India.

View Full Image

Sustained growth
What helps Bangladesh in producing cheap goods?

According to the Economic Survey of 2019-20: “Bangladesh… [has] more than 80% of market value of exports by large enterprises, India has 80% by small enterprises." Readymade garment exporters in Bangladesh, therefore, have economies of scale. Also, Bangladesh’s exports to the European Union and Canada are largely duty-free.

Why do Indian garment exporters lack scale?

As T.N.Ninan writes in The Turn of the Turtoise: “Rigid laws prevent flexibility in manning for a seasonal industry… India has only three or four garment makers with turnover in excess of $100 million." Hence, the turnaround time of Indian firms from order to delivery is 63 days. In Bangladesh, this turnaround time is far less at 50 days. Also, it takes only one day for a consignment to reach a port in Bangladesh. In India, it can take as many as 10 days for a consignment to reach a port. All such factors are barriers to creating scale.

What can India learn from  Bangladesh?

In order to increase exports of readymade garments, Indian firms will have to grow bigger. It is also worth noting that if there are more jobs in the garments sector, it will provide a working opportunity for women. Increasing employment for women leads to several benefits. As the Economic Survey of 2016-17 points out: “In Bangladesh, female education, total fertility rate, and women’s labour force participation moved positively due to expansion of the apparel sector."

Vivek Kaul is the author of Bad Money.

www.livemint.com/industry/manufacturing/bangladesh-has-some-readymade-lessons-for-india/amp-11594220932106.html

 

[DalalErMaNodi]

Only two factors...
1. Cost of labour
2. Duty free access

Size of Industry and access to port are not that big as stated... 10 days is exaggerated...



You really need to understand what is secularism... if you practice a religion... you are not secular... please use dictionaries to understand the meaning...

Tolerance towards other religion or freedom to practice your religion is not secularism... We can discuss this on an appropriate thread...

Please educate me then, happy to hear what you have to say.


Baseless misconceptions about Bangladesh are very entertaining.

 

[Arthur]

I almost died laughing at

"India manufactures superior quality woven and knitted products."

Whut???

@Michael Corleone @Bilal9

 

[Bilal9]

In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion
Bangladesh has some readymade lessons for India
2 min read . 08 Jul 2020

Vivek Kaul

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look.

When did Bangladesh’s exports overtake India?

This happened in 2006-07, when Bangladesh exported readymade garments worth $9.21 billion and Indian exports stood at $8.89 billion. In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion, while that of India fell by 4% to $15.48 billion. As per a paper titled What explains India’s poor performance in garments exports? by Saon Ray of Indian Council for Research on International Economic Relations (ICRIER): “Bangladesh produces simple apparel such as t-shirts, shirts in bulk... While India manufactures superior quality woven and knitted products." Covid has hit low-end exports more.

How did Bangladesh become competitive?

One of the major reasons for Bangladesh’s competitiveness is that it is cheaper to produce goods in Bangladesh than in India. According to a working paper titled Automation and Future of Garment Sector Jobs: A Case Study of India written by Pankaj Vashisht and Nisha Rani of ICRIER: “The unit labour cost of producing a cotton shirt in the United States is around $7, while the unit labour cost of producing the same shirt in India comes at around 50 cents, whereas in Bangladesh the unit labour cost is only 22 cents." This gives Bangladesh a competitive advantage over the rest of the nations, including India.

View Full Image

Sustained growth
What helps Bangladesh in producing cheap goods?

According to the Economic Survey of 2019-20: “Bangladesh… [has] more than 80% of market value of exports by large enterprises, India has 80% by small enterprises." Readymade garment exporters in Bangladesh, therefore, have economies of scale. Also, Bangladesh’s exports to the European Union and Canada are largely duty-free.

Why do Indian garment exporters lack scale?

As T.N.Ninan writes in The Turn of the Turtoise: “Rigid laws prevent flexibility in manning for a seasonal industry… India has only three or four garment makers with turnover in excess of $100 million." Hence, the turnaround time of Indian firms from order to delivery is 63 days. In Bangladesh, this turnaround time is far less at 50 days. Also, it takes only one day for a consignment to reach a port in Bangladesh. In India, it can take as many as 10 days for a consignment to reach a port. All such factors are barriers to creating scale.

What can India learn from  Bangladesh?

In order to increase exports of readymade garments, Indian firms will have to grow bigger. It is also worth noting that if there are more jobs in the garments sector, it will provide a working opportunity for women. Increasing employment for women leads to several benefits. As the Economic Survey of 2016-17 points out: “In Bangladesh, female education, total fertility rate, and women’s labour force participation moved positively due to expansion of the apparel sector."

Vivek Kaul is the author of Bad Money.

www.livemint.com/industry/manufacturing/bangladesh-has-some-readymade-lessons-for-india/amp-11594220932106.html

I think the author went through my posts made in the last five years as I have been saying his mentioned points verbatim.

I almost died laughing at

"India manufactures superior quality woven and knitted products."

Whut???

@Michael Corleone @Bilal9

We all know ground reality. At least let Indians feel good about something, real or not.

 

[Bilal9]

Please educate me then, happy to hear what you have to say.


Baseless misconceptions about Bangladesh are very entertaining.

Yup - I know for a fact (discussing with Indian businessmen themselves), that trucks going to ports in other states (other than the factories are in) have to wait for days at Indian state borders for red tape and pay Octroi. Please come back when you have researched the facts...

Bangladesh factories are usually a day's trip away from any port - and going forward, will be HOURS AWAY FROM PORTS, a la patterns in China.

Plus the article mentions scale which he plainly did not understand. Indian factories are generally small (much smaller at 100-200 workers than Bangladeshi factories having more than a thousand, sometimes 3000 workers), as Indian investors' kanjoosi auqat doesn't permit investing in modern facilities and equipment. This means naturally Bangladesh costs are even lower. Seven of the world's top apparel factories in terms of automation and environmental sophistication (GBC Leeds certified) are located in Bangladesh.

Wages in Bangladesh aren't so low anymore. It is a minimum of eight thousand taka per month mandated by govt. and will soon be doubled. Productwise Bangladesh is also moving up the value addition chain. The article mis-states by saying we are a sweatshop, which was transcended some two decades ago. India's situation however has remained in that same state...

Bangladesh factories do better because they work much harder to comply with EU regs and with far better product at the end of the day.

Their government and justice system proved how 'secular' they're during the Babri Masjid fiasco last year.


I'm amused when Indians come up with excuses, instead of admitting it for what it is.


This kind sir here wants to debate semantics rather than admit India is now run by bigots.

Well how are things going to be different all of a sudden...

Typical pattern....smoke and mirrors all the time. Lies and dhokeybaaji as always.

 

[Arthur]

If this picture represent a typical Indian RMG factory then good luck to them

I would advise the sanghi media to visit youtube & watch some videos of RMG factories in Bangladesh.

@Bilal9 bro, a factory in my old town employs 4000 workers just in one building & they have like two & another one under construction.

Sweatshop .....

 

[Bilal9]

If this picture represent a typical Indian RMG factory then good luck to them

I would advise the sanghi media to visit youtube & watch some videos of RMG factories in Bangladesh.

@Bilal9 bro, a factory in my home town employs 4000 workers just in one building & they have like two & another one under construction.

Sweatshop .....

This the cafeteria of an RMG factory in Bangladesh, and this is pretty typical of new factories. Most factories even have daycare and lunches provided.

These are factory floors

Rana Plaza incident - which was our 'triangle shirt waist factory' disaster a la in the US in 1911, caused the formation of the international movement for "Accord on Fire and Building Safety in Bangladesh" which also led to formation of "the Alliance for Bangladesh Worker Safety (Alliance)", and the "National Action Plan on Fire Safety and Structural Integrity (NAP)". Bangladesh apparel factories as a result are far safer than any global Apparel factory, including those of India.

https://rmg-study.cpd.org.bd/accord-will-2021/

 

[Michael Corleone]

I almost died laughing at

"India manufactures superior quality woven and knitted products."

Whut???

@Michael Corleone @Bilal9

Last night I had a strange encounter, there was this drunk Moroccan dude and he asked where I’m from... told him Bangladesh... although friends introduced me as being from Kuwait...whatever... the dude smiles and points at his tshirt... says Bangladesh makes the best tshirt in Russian... I couldn’t help but smile

 

[Figaro]

In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion
Bangladesh has some readymade lessons for India
2 min read . 08 Jul 2020

Vivek Kaul

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look.

When did Bangladesh’s exports overtake India?

This happened in 2006-07, when Bangladesh exported readymade garments worth $9.21 billion and Indian exports stood at $8.89 billion. In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion, while that of India fell by 4% to $15.48 billion. As per a paper titled What explains India’s poor performance in garments exports? by Saon Ray of Indian Council for Research on International Economic Relations (ICRIER): “Bangladesh produces simple apparel such as t-shirts, shirts in bulk... While India manufactures superior quality woven and knitted products." Covid has hit low-end exports more.

How did Bangladesh become competitive?

One of the major reasons for Bangladesh’s competitiveness is that it is cheaper to produce goods in Bangladesh than in India. According to a working paper titled Automation and Future of Garment Sector Jobs: A Case Study of India written by Pankaj Vashisht and Nisha Rani of ICRIER: “The unit labour cost of producing a cotton shirt in the United States is around $7, while the unit labour cost of producing the same shirt in India comes at around 50 cents, whereas in Bangladesh the unit labour cost is only 22 cents." This gives Bangladesh a competitive advantage over the rest of the nations, including India.

View Full Image

Sustained growth
What helps Bangladesh in producing cheap goods?

According to the Economic Survey of 2019-20: “Bangladesh… [has] more than 80% of market value of exports by large enterprises, India has 80% by small enterprises." Readymade garment exporters in Bangladesh, therefore, have economies of scale. Also, Bangladesh’s exports to the European Union and Canada are largely duty-free.

Why do Indian garment exporters lack scale?

As T.N.Ninan writes in The Turn of the Turtoise: “Rigid laws prevent flexibility in manning for a seasonal industry… India has only three or four garment makers with turnover in excess of $100 million." Hence, the turnaround time of Indian firms from order to delivery is 63 days. In Bangladesh, this turnaround time is far less at 50 days. Also, it takes only one day for a consignment to reach a port in Bangladesh. In India, it can take as many as 10 days for a consignment to reach a port. All such factors are barriers to creating scale.

What can India learn from  Bangladesh?

In order to increase exports of readymade garments, Indian firms will have to grow bigger. It is also worth noting that if there are more jobs in the garments sector, it will provide a working opportunity for women. Increasing employment for women leads to several benefits. As the Economic Survey of 2016-17 points out: “In Bangladesh, female education, total fertility rate, and women’s labour force participation moved positively due to expansion of the apparel sector."

Vivek Kaul is the author of Bad Money.

www.livemint.com/industry/manufacturing/bangladesh-has-some-readymade-lessons-for-india/amp-11594220932106.html

India would never go look at the success of Bangladesh because they've always considered them much inferior. The gov is too proud to use such a smaller and in their opinion backward country's economic success as something to emulate ...

 

[Figaro]

Look, i think that you are one of the few frank and outspoken Bangladeshi members here. You may speak ill of my country and my people, and that's understandable as it is what you are supposed to do here. Clash of the nationalists, lol.. But you mustn't falsify the struggles of your own kind. Look at @Buddhistforlife for example, only one of his kind here , he had to endure a lot, having had to prove his loyalty to just about any one of your nondescript miya. Can begin to fathom the conditions of those really inhabiting the said places.


Aww, how cute. This genius seems to have figured everything.

Lol your patronizing tone does not distract from the fact that Bangladesh's economy has been considerably more successful than that of India in recent years.

 

[Novice09]

You quoted my post, which expressly used the word 'secularism' and was in reference to the Bangladeshi state ideology.


Shut your mouth, if you're too much of a coward to accept your own mistake.


Don't make up excuses and cheap semantical arguments to hide your mistakes.




Shhhh now 'infallible' heroine.

Your comprehension problem is not my fault... and mine yours... since, you were in the mode of 'secular India'... you missed 'secular you'...

Errors and mistakes are acknowledged by me and I do rectify them... but if none, then?
Let's agree to disagree and return to the topic...

Have anything to say about labour cost and duty free access...

 

[DalalErMaNodi]

Your comprehension problem is not my fault... and mine yours... since, you were in the mode of 'secular India'... you missed 'secular you'...

Errors and mistakes are acknowledged by me and I do rectify them... but if none, then?
Let's agree to disagree and return to the topic...

Have anything to say about labour cost and duty free access...

No, let's talk employee benefits ?

In-house daycare service, interest free or low interest loans via committee system, self help groups, free in-house medical services sometimes including dentistry, free of cost lunch for employees in air conditioned canteens, in-house family planning services, subsided food stuffs like rice and Dal and so much more.

Some companies, run entire schools for the children of employees to attend.


Let's not talk about labour rights and labour costs, India has miles to go to even provide half the things our factories provide to their employees.

 

[DalalErMaNodi]

@krash why don't you delete the thread while you're at it ?

Now it looks as if we are talking to ourselves and many good posts with good points have been deleted.


@namefield_empty you're reporting my posts for what ?

 

[krash]

@krash why don't you delete the thread while you're at it ?

I was feeling especially generous.

Now it looks as if we are talking to ourselves and many good posts with good points have been deleted.

Should have thought about that before derailing the thread.

 

[namefield_empty]

@krash why don't you delete the thread while you're at it ?

Now it looks as if we are talking to ourselves and many good posts with good points have been deleted.


@namefield_empty you're reporting my posts for what ?

Nope, lol. I seldom report posts, my posts have all been deleted too, and received a soft warning. Did you, too?