Vikrant Shekhawat : Oct 29, 2024, 01:00 AM
Bangladesh-Pakistan News: Bangladesh's textile industry has been facing persistent power and gas supply problems for the past two years, causing heavy losses to the industry. These problems shifted many of Bangladesh's major international orders to Pakistan, and the losses have not yet been recovered. Due to the doubling of gas prices, political instability, and labor unrest in industrial sectors, Bangladesh has lagged behind in meeting global demand. At the same time, Pakistan has taken advantage of this situation to increase its textile exports.Rising gas prices and cuts from India increased difficultiesIn February 2023, the then Sheikh Hasina government of Bangladesh increased gas prices by about 150%, leading to an unprecedented increase in the cost of textile production. Gas prices were increased from 11.98 taka per unit to 30 taka, resulting in many major exporters of the industry withdrawing their orders. On the other hand, during the interim government of Mohammad Yunus, there was a cut in power supply from India as Bangladesh did not pay its dues to India's Adani Group and other power companies. This led to a shortage of supply to industries, which affected production.Political instability reduced the trust of global brandsThe ongoing political instability in Bangladesh is also one of the biggest challenges for the textile industry. International brands have lost trust in Bangladesh due to the unsafe environment and unrest in the country. Especially, brands from the US and the European Union have started distancing themselves from Bangladesh. As a result, Bangladesh's position in the international market is weakening, and competing countries like Pakistan are benefiting from this.How did Pakistan benefit?Pakistan, which is the seventh largest cotton producer in the world, is gaining a competitive edge in the field of textile production. Apart from this, Pakistan has been placed in the European Union's GSP+ (Generalized Scheme of Preferences Plus) category, which gives it more preference than Bangladesh in the European market. From 2014 to 2022, this GSP+ facility has led to a 108% increase in Pakistan's exports to Europe. Also, Pakistan benefits from the local availability of cotton, while Bangladesh has to import 98% of its demand. Pakistan's textile exports reached $1.64 billion in August 2024, up 13% from the previous year.Increase in production cost increased difficultiesBangladesh industrialist Khurshid Alam, who is the chairman of Little Group, says that the increase in gas prices has led to a huge increase in production costs. Earlier, where the monthly cost of a company was 68 crore taka, it has directly increased to 126 crore taka. Due to the high cost, many companies temporarily stopped their orders, due to which large orders went to Pakistan.ConclusionBangladesh's textile industry, which was once known for its strong position in the global market, is now facing difficulties due to power and gas crisis, political instability and high production costs. This situation is directly benefiting Pakistan, which is now rapidly growing in the field of textile exports. If Bangladesh does not solve these problems soon, it may be difficult to compensate for the losses suffered by the textile industry, and its hold in the global market will weaken.