India, Bangladesh to join hands to develop regional exports hub

India has plans to set up a special economic zone in Bangladesh, and both the countries are likely to take a formal decision next month when Prime Minister Narendra Modi is expected to visit Dhaka.

The Dollar Business Bureau Bangladesh Exports India and Bangladesh are considering the development of a regional supply chain to boost their exports and set up a joint manufacturing hub of South Asian countries to counter China’s Pearl Valley Delta. India has plans to set up a special economic zone in Bangladesh and both the countries are likely to take a formal decision next month when Prime Minister Narendra Modi is expected to visit Dhaka, a media report said quoting senior government officials. “I have already spoken to the export processing zone regulators in Bangladesh, and we are looking forward to the idea of the Indian SEZ,” Bangladesh Foreign Minister Shahriar Alam was quoted as having said in New Delhi. Although the two countries compete against each other in the international market, especially in apparel exports, “there is far more scope for cooperation in trying to jointly build a supply chain beneficial to both of us,” foreign secretary Subrahmanyam Jaishankar told a media outlet. Experts believe that developing a supply chain in Guangdong province of China is a major factor behind the country’s emergence as the manufacturing hub in the region. The Pearl Valley Delta of China has become one of the largest exporting hubs due to easy access of a major supply chain and availability of cheap labour in the region, say analysts. Buoyed by its success in readymade garments exports, Bangladesh has been trying to develop its own supply chain in the region. In Apparel exports, Bangladesh has already moved to the second position after China. Besides, Bangladesh has also emerged as India’s competitor in the export of automobile components. However, experts say that the country has to join hands with India for the development of a supply chain to streamline the inflow of cotton and other raw materials from India. The garment industry has a major share in Bangladesh’s exports. The sector provides employment to more than 4 million people in the country. A common supply chain is also expected to open more outsourcing avenues for both India and Bangladesh. And experts say that both the countries will be able to bargain for better wages.    

May 26, 2015 | 7:49 pm IST.

 

The Dollar Business Bureau - May 26, 2015 12:00 IST
 
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