Shares of Indian textile manufacturers surged as investors bet on their potential to gain market share from a politically unstable Bangladesh. The turmoil, marked by violent protests that forced Prime Minister Sheikh Hasina to flee the country, threatens to disrupt Bangladesh’s supply chains.
The stocks of several Indian textile firms, including KPR Mill, Arvind Ltd., Gokaldas Exports Ltd., Vardhman Textiles Ltd., and Welspun Living Ltd., all rose more than 10% in Mumbai, driven by expectations of increased market share.
Bangladesh, the second-largest exporter of ready-made garments and other textile products behind China, has experienced rapid growth in this sector. In 2022, Bangladesh’s textile exports were valued at $45 billion, more than double that of India.
“If there are frequent disruptions to the supply chains in Bangladesh then global buyers may look at alternatives,” said Prerna Jhunjhunwala, an analyst at Elara Securities Ltd. “Indian players are well poised to take market share in that case as they have vertically integrated capacity to service the needs of global companies.”
The upheaval in Bangladesh saw its military promise to establish an interim government following Hasina’s resignation and departure, amidst protests that resulted in numerous fatalities. This political instability has raised concerns over the continuity of Bangladesh’s textile exports, presenting an opportunity for Indian textile manufacturers to capitalize on the situation.
