Bangladesh: Imports from India Rise Amid Shrinking Lead Times

By Admin

14 Apr, 2025

Rising Need for Speed in a Changing Global Market

In today’s rapidly evolving global supply chain landscape, speed and reliability have become non-negotiable. Bangladeshi manufacturers and exporters, especially in the critical readymade garment (RMG) sector, are under growing pressure to meet tighter delivery deadlines. What was once a 90-day window has now shrunk to as little as 45 days. As a result, Bangladesh is increasingly turning to neighboring India for faster and more dependable import solutions.

India: A Strategic Trade Partner

Time has become a key currency in trade. While importing essential raw materials like cotton from distant regions such as Africa, Latin America, or the US can take over 45 days, Indian consignments often arrive within two to three days. This dramatic reduction in lead time is helping Bangladeshi industries remain competitive in the international market.

According to data from Bangladesh Bank, imports from India rose by 2.09% year-on-year in the October–December quarter of 2024, reaching $2.36 billion—up from $2.04 billion during the same period in 2023. Although the total import volume from India dipped slightly to $9 billion in FY24 (from $9.94 billion in FY23), the trend appears to be bouncing back strongly, with $4.41 billion in imports recorded in just the first half of FY25.

Cotton: The Cornerstone of Trade

One of the major drivers of this upward import trend is cotton. Bangladesh imports over $3 billion worth of cotton each year, with Indian suppliers accounting for more than half of this demand. Indian cotton imports surged from $1.92 billion in FY23 to $2.36 billion in FY24, showcasing a growing dependency. Besides cotton, yarn, fabrics, textile chemicals, and handloom products from India are in high demand.

Factors Fueling the Import Shift

Several developments have accelerated Bangladesh’s reliance on Indian imports:

• Political and labour unrest in Bangladesh in mid-2023 disrupted local supply chains, prompting businesses to seek stable sources.
  
  

• Border improvements and enhanced infrastructure have facilitated formal trade, reducing dependence on informal channels.
  
  

• The US dollar shortage has made it harder to secure LCs with far-off suppliers, making Indian transactions more financially feasible.
  
  

• Shared language and cultural familiarity have simplified negotiations and operations between Bangladeshi and Indian businesses.
  
  

Currently, Bangladesh operates 24 land ports and three rail ports with India, improving connectivity and ensuring smoother trade flows.

Trade Imbalance: An Area of Concern

Despite the rise in imports, Bangladesh’s exports to India declined by 11.63% in FY24, from $1.77 billion to $1.56 billion. This signals a persistent trade imbalance. Factors such as limited product diversification and inadequate export readiness are hindering Bangladesh’s ability to take full advantage of duty-free access to the Indian market.

Looking Ahead: Opportunities and Challenges

As global supply chain constraints continue to challenge businesses, India’s strategic position as a trade partner for Bangladesh is likely to strengthen further. However, to build a more balanced and mutually beneficial trade relationship, Bangladesh must focus on:

• Diversifying its export products,
  
  

• Enhancing production capabilities,
  
  

• Investing in export-readiness initiatives.
  
  

Only then can the country fully benefit from its proximity to India while improving its position in regional trade dynamics.