Punjab’s yarn export severely hit amid Bangladesh turmoil
Trucks stuck at India-Bangladesh border due to turmoil in Bangladesh cause crores in losses for Punjab yarn manufacturers, affecting exports and orders.
With trucks stranded at Petrapole in West Bengal along the Bangladesh border amid the turmoil in the neighbouring country, yarn manufacturers in Punjab have reported losses worth crores of rupees. Payments of a number of yarn manufacturers from the state are stuck.
The international border has been closed amid the violence in Bangladesh that has claimed at least 300 lives, forcing prime minister Sheikh Hasina to resign and flee the country. Over 1,000 trucks, including several from Punjab and Gujarat — the two primary exporters of cotton and synthetic yarn to Bangladesh, are stranded. While it is not known how many, a number of trucks returning to India are stranded on the other side of the border.
Averagely, 450-500 trucks move from India to Bangladesh through Petrapole – the largest land port in South Asia – every day. About 150-200 trucks come the other way. Amit Thapar, owner of Ganga Acrowools Limited in Ludhiana, said the state has huge stakes in Bangladesh with total yarn exports over ₹4,000 crore per year. “Cotton yarn has the biggest share, followed by acrylic wool. Many agents and companies have offices in Bangladesh. Goods worth over ₹200-300 crore are estimated to be stuck at the border and orders worth ₹1,000 crore will be immediately affected,” he said.
Thapar, who heads the CII Northern Region export committee, said his firm’s goods worth about ₹2 crore are stuck and orders worth ₹4-5 crore have been affected.
Transporter Bajrang Sharma of Goel Roadways in Chandigarh, who is a member of the management committee of the All India Motor Transport Congress, said a number of traders have asked their drivers to park the trucks in warehouses near the Petrapole border and return while others are stranded in queues. “They will wait for things to settle down,” he said.
Goel added that from Punjab, Chandigarh and Haryana, 100 to 150 trucks carrying commodities from yarn to food items and machine parts are sent to Bangladesh daily. As the situation turned tense since last Saturday, trucks were stopped at the border.
Aseem Hanspal, managing director of Skope, who works as a strategy consultant and is on the advisory board with a few textile organisations in both countries, said Bangladesh procures more than 50% of its yarn from India which is utilised by garment manufacturing factories. Due to the turmoil, the supply and demand chain is broken and orders are getting cancelled. “Lots of material are stuck on the way, resultingly 40% business has been affected with decreased production in the last two months. Orders are getting delayed, cancelled and prices are fluctuating,” Hanspal added.
Afzarul Rahman, owner of a garment manufacturing firm in Bangladesh, said his consignments ordered from India are stuck and there is a delay in delivery of goods worth half a million dollars from Ludhiana in Punjab. “We are hoping the situation will normalise soon,” he said.
Silver lining for garment industry
Garment manufacturers say the current situation may benefit the industry in the state. It is expected that some garment orders will shift to India from Bangladesh to fill the gap caused by the disruption. Garment exports from Bangladesh account for 85% of its total good exports. “While the yarn industry is suffering losses, it will take some time for normalcy to be restored. Both government and the industry need to act at a fast pace as already India’s garment manufacturers face stiff competition from Vietnam, Myanmar as well as Cambodia,” said Ludhiana-based Sudershan Jain, president, Knitwear and Apparel Manufacturers Association of Ludhiana (KAMAL).