By
Bloomberg
Published
August 6, 2024
Shares in Indian textile makers rose on bets they could profit from political unrest in Bangladesh that threatens to disrupt supply chains.
Bangladeshi textile exporters face the risk of losing business amid political instability that sparked violent protests that forced Prime Minister Sheikh Hasina to flee the country on August 5.
Shares of Indian manufacturers including KPR Mill, Arvind Ltd., Gokaldas Exports Ltd., Vardhman Textiles Ltd. and Welspun Living Ltd. rose more than 10% in Mumbai on expectations of increased market share.
Bangladesh has seen rapid growth in its exports of ready-made garments and other textile products, making it the world’s second-largest exporter of such products, behind only China. The country’s textile exports amounted to $45 billion in 2022, more than double that of India.
“If there are frequent disruptions in supply chains in Bangladesh, global buyers may look for alternatives,” said Prerna Jhunjhunwala, an analyst at Elara Securities Ltd. “Indian players are well positioned to gain market share in such a case as they have vertically integrated capabilities to cater to the needs of global companies.”
Bangladesh's military has vowed to install a new interim government in the country after Hasina, one of Asia's longest-serving leaders, resigned and fled the country amid protests that left dozens dead.
