Swot Analysis Of BangladeshSubmitted By: Aditi KhannaAkansha Gupta

Sanskriti VarmaShrey Gulati

MFM-II (2013-15)

National Institute Of Fashion Technology, Hyderabad

Fashion Export Merchandising & Exim Documentation

India Takes

Advantage!

OUTLINE

INTRODUCTIONBANGLADESH AT A GLANCEEXPORT-IMPORT COMMODITIESEXPORT IMPORT PARTNERSPRESENT EXPORT SCENARIOSWOT ANALYSIS RECOMMENDATIONSIMPORTANCE FOR INDIA IN TERMS OF EXPORTSCONCLUSION

INTRODUCTION

Bangladesh emerged as an independent Country in 1971.

Bordered on India by 3 sides and by Myanmar on south-east.

8th largest populous country in the world.

Size of the country is 147570 sq. kilometers.

160.4 million people with 1.27% growth rate.

Small country with huge HR: More than 64 million labor force.

BANGLADESH AT A GLANCE Capital: Dhaka; Other major cities: Chittagong,

Khulna, Sylhet, Rajshahi, Barisal & Rangpur

Climate: Sub-tropical monsoon Temperature: Average

maximum 35°C and minimum 21°C

Major language: Bengali, English is generally understood

Adult Literacy Rate: 64% (15 years +)

Currency: Taka GDP per capita: US$

1700(2010) International Air Ports :

Dhaka. Chittagong, Sylhet

Sea Ports : Chittagong and Mongla

Investment climate: Conducive investment climate compared to other South Asian countries.

EXPORT ~ IMPORT COMMODITIES

Export:

RMG (Woven & Knit) Frozen food (shrimp) Agricultural products Leather & leather products Jute goods Engineering goods Ceramics Home Textile Textile fabrics etc

Import: Oil Edible oil Petroleum products Wheat Seeds Fertilizer Yarn Capital goods Machinery Scientific & medical

equipments.

EXPORT ~ IMPORT PARTNERS

Export:

USA EU Canada Turkey Japan Australia India China South Korea etc.

Import:

China India Singapore Japan Malaysia South Korea Germany Middle-east Uzbekistan etc.

PRESENT EXPORT SCENARIO

Bangladesh is exporting 705 products to the global market. Share of major export products are -01 RMG and knit wear 78.13%

6 Items

02 Jute goods 3.30%

03 Frozen Foods 2.73%

04 Raw Jute 1.56%

05Leather & Leather Products

1.54%

06 Footwear 1.30%Total 88.56%

Only 6 commodities are contributing 88.56 % to our total export earning where as 699 items have share of 11.44 % in our total export.

SWOT ANALYSIS OF BANGLADESH

Advantage over China, Pakistan & India

Adequate supply of labor force of both sexes, attributed with less attitudes problem (less absenteeism and, aptitude for learning, and loyal) and high morale

Cheaper labor cost

Low cost of captive power generation using gas as fuel

GSP facility up to 2015 (renewed recently)

STRENGTHS

Bangladesh produce mostly basic products- which are low cost items; the share of fashion products i.e., high value added product is very low.

Bangladesh does not produce the basic raw materials (only a negligible quantity of cotton but no manufactured fiber) and as such has to depend totally on sensitive global market.

Because of inadequate backward linkage, lead-time happens to be long, nearly 3 months.

Public power supply is erratic.

Bank interest rate is still high enough, particularly of private sector bank, for investment of export oriented high value project.

HRD facility, productivity and quality support, testing and accreditation support, design support and compliances are yet to be enhanced.

Cost of doing business is high because of under table money

WEAKNESSES

Bangladesh has now a scope to go for more fashion oriented products deserving high price in the global market.

With the help of further increase of productivity & quality and design support, Bangladesh can minimize cost and maximize profit and export value.

Bangladesh, as a proven experienced RMG & Textile manufacturer, can expand share in the existing market (USA, EU, Australia, Canada, etc.) and can also explore opportunity in Japan & CIS countries.

In the long run, Bangladesh has a scope to target huge populated countries like China and India- where demand as well as cost of manufacturing will be wider.

OPPORTUNITIES

Unless new strong market is explored in home or abroad, any non-cooperation from USA & EU may jeopardize the whole Bangladesh RMG export business and consequently the textile manufacturing.

Sudden price hike of cotton and yarn in the global market may push Bangladesh to a very awkward situation to devastate the business.

The type of labor and political anarchies of the recent days if prevails in the future, Bangladesh may lose the business in the way Sri Lanka has lost.

Growing terrorism, or its false/amplified propaganda, is also a big threat.

The poor political culture and violence is one of the most important threats.

(Source: http://forum.daffodilvarsity.edu.bd/index.php?topic=5141.0)

THREATS

Bangladesh has to create new capacities and modernize & balance the existing ones.

Encouragement of FDI from ethnic Bengalis in foreign countries would be one of the best options for the needed financing in addition to the local banks' efforts.

Power supply has to be ensured.

Bangladesh needs to develop capacities to provide the industries with a sustainable supply of resource personnel and support services in regard of research, design, testing & standardization, accreditation, compliances, etc.

RECOMMENDATIONS:Bangladesh to improve it’s situation

Bangladesh has to improve the port efficiency further and gear up domestic transportation.

Labor crisis, labor safety, social rights and gender issues have to be dealt with more efficacies.

It is important that the buyers should have a preferred access to the country; starting from reception on arrival to facilities such as hotel/rest house, tourism and recreation should be improved.

IMPORTANCE FOR INDIA IN TERMS OF EXPORTS

WEAKNESS VIEWPOINT

India produces all types of high, mid and low cost items and the pool of textiles India produces almost covers every kind of need in the market.

India happens to be a hub of textiles and raw material majorly Tirupur for it’s knits, Bhagalpur for it’s silk and Cotton in many states like Gujarat, Andhra Pradesh, Punjab, etc.

India has been exporting since many years now, the lead times here are lower comparatively.

OPPORTUNITY VIEWPOINT

Bangladesh has now a scope to go for more fashion oriented products. India, being closest in terms of distance will have higher exports of raw material and high cost fabrics to Bangladesh.

India has strong ties with US and European countries, hence, Bangladesh focusing on big countries shall face tough competition from India.

THREAT VIEWPOINTIf the political situation doesn’t improve, Bangladesh shall increase imports from India, so that the labor doesn’t face unemployment.West Bengal becomes the highest source of material and labor exchange during power and labor crisis.

CONCLUSION

India's exports have grown much faster than GDP over the past few decades. In the past, its exports have grown over 11% per annum while growth in GDP is about 5% during 1970-98 periods. Exports have grown even faster since 1945-95. Several factors appear to have contributed to this phenomenon including foreign direct investment (FDI)which has been rising consistently especially from the early 1990s.

India and Bangladesh are in bilateral trade relationship. Whereas, Bangladesh has its advantages in exports, India has a major chunk of merits over Bangladesh in reaction to many of the threats and weaknesses Bangladesh has.

REFERENCES

1. http://forum.daffodilvarsity.edu.bd/index.php?topic=5141.02. http://web.worldbank.org/WBSITE/EXTERNAL/

COUNTRIES/SOUTHASIAEXT/0,,contentMDK:21177520~pagePK:146736~piPK:146830~theSitePK:223547,00.html

3. http://shodhganga.inflibnet.ac.in/bitstream/10603/1169/14/14_chapter%207.pdf

4. http://aida.wss.yale.edu/growth_pdf/cdp816.pdf

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