Comparative Analysis of India and Bangladesh Apparel Industry

Abstract

This study examines the trade performance and competitiveness of the garment industry in India and Bangladesh. The study includes 4-digit commodities in the apparel industry, namely 61 knitted or crocheted items (16 commodities) and 62 woven items (17 commodities) from 2004 to 2023, using export and import data from the ITC Trade Map. The analysis focuses on post-reform dynamics, particularly after the phasing out of the Multi-Fibre Arrangement (MFA) in 2005, which reshaped the global apparel trade. Using the Revealed Comparative Advantage (RCA) index, the study evaluates the competitiveness of key apparel products, while trend analysis highlights changes in export patterns, trade shares and market destinations. A comparative framework is used to evaluate the advantages and disadvantages of the two nations, taking into account elements such as export diversification and cost effectiveness. The findings demonstrate that Bangladesh consistently possesses a significant comparative advantage in various product categories, particularly in mass-market apparel, including men's and women's shirts (HS Codes 6109, 6111), men's undergarments (6105), and outerwear such as coats and jackets (6203, 6209), with RCA averages substantially surpassing those of India. Bangladesh's RCA for men's shirts (6109) is 68.99, far surpassing India's 3.54. India has a comparative advantage in some specialized areas, like women’s suits (6214) with RCA of 10.78, in contrast to Bangladesh's 0.47, and men’s blazers (6213) with an RCA of 2.23, surpassing Bangladesh’s 1.70. Both countries have relatively weak competitive positions in women's knitted tops (6115), with neither demonstrating a strong Revealed Comparative Advantage (RCA). The study suggests that Bangladesh excels in low-cost, high-volume garment production, but India might enhance its position by focusing on specialized, higher-value apparel. The results clarify the changing dynamics of the apparel industry and provide policy suggestions to improve competitive strategies for both nations.