By
Bloomberg
Published
August 19, 2024
Gokaldas Exports Ltd. has decided to put on hold its plan to build a garment factory in Bangladesh as the country continues to grapple with political turmoil that has killed hundreds of people during weeks of violence.
The Indian company, which exports to more than 50 countries including the United States, Canada and some European nations, will only engage in contract manufacturing in Bangladesh for now, according to Sivaramakrishnan Ganapathi, vice president and managing director of the Bengaluru-based firm.
“We have been watching the economy from a distance and we weren’t very confident about making that investment,” Ganapathi said in an interview with Bloomberg Television on Monday. “We will wait and watch how it develops. We see a lot more opportunities for us in India now.”
Bangladeshi Prime Minister Sheikh Hasina was forced to resign and flee to neighbouring India this month following a series of clashes led by students and government supporters. What began as peaceful demonstrations seeking to abolish a quota on government jobs spiralled into deadly unrest. More than 600 people have been killed during the weeks-long protests, the UN Human Rights Office said in a preliminary report.
The textile industry plays an important role in Bangladesh’s economy and will continue to do so for the foreseeable future, Ganapathi said. “Therefore, it is in their interest, in the interest of the country, to ensure that the textile industry is well protected and supported.”
Some major European companies have approached Gokaldas Exports after the crisis in Bangladesh seeking help to meet their growing demand, he said. While buying from India instead of sourcing from tariff-free Bangladesh would be expensive for them, this indicates that foreign brands are trying to de-risk their business, Ganapathi said.
