India’s decision to open its doors to Bangladeshi garment items is widely expected to hit the domestic clothing sector, especially the small and medium apparel manufacturers and segments of the hosiery industry.

The Prime Minister, Dr Manmohan Singh’s announcement of duty-free access to 46 textile items from Bangladesh in the form of a unilateral trade concession is likely to result in loss of employment and adversely affect investments across the complete textile value chain, industry players said.

The Bangladeshi apparel items that have been allowed duty-free access include pants, shirts, blouses, skirts, kidswear, cotton nightwear, jeans, swimwear and tracksuits. "The 46 items cover most of Bangladesh’s total garment production in terms of quantity. The products for which Bangladesh has sought concessions are also major products for India’s domestic production as well as consumption," Mr D. K. Nair, Secretary-General of industry body CITI, said.

CITI has already petitioned the Government warning that the move could impact the fate of 35 million workers and a large number of SME units engaged in production of textiles and garments in India are at stake on this issue. There will be "severe adverse impact" on the garment clusters in Tirupur, Ludhiana and West Bengal, CITI claimed.

As a consequence, the Bangladesh industry is already expecting its export earnings to double in the years ahead due to an opening of market opportunities in India. Also, the move could result in India becoming Bangladesh’s third largest garment export destination after the EU and the US.

Bangladesh's apparel manufacturing industry is much more competitive than the Indian clothing sector, mainly on account of structural deficiencies faced by the Indian manufacturing sector. Bangladesh scores on account of lower labour and power costs

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