Finance Minister Nirmala Sitharaman on Saturday said that the Indian garment sector is facing a bit of uncertainty due to the Bangladesh crisis. She, however, expressed hope that investments by Indian textile players in Bangladesh are safe. She also expects things in the neighbouring country to settle down soon.

When asked about how India would be impacted because of situation in Bangladesh, she said that she got calls from Indian companies who have invested in the textile sector in Bangladesh Many of them were from Tamil Nadu. The investments were made in good faith and these investors did well having gone there. The exports from Bangladesh also increased.

“So now particularly the garment and knitted fabric sector is seeing a bit of uncertainty. I hope that the investments are all safe,” she said during press conference after the RBI post-budget press conference. Further she said that it’s too early to assesss what kind of an impact the situation in Bangladesh will have on India’s economy.

“You’ve had the Prime minister’s observations coming, a statement by the external EAM in the Parliament and the efforts that are being taken to ensure that our borders are safe. I hope that the interim government will settle things sooner rather than later so that both the people of Bangladesh and India can get back to normalcy,” she added. 

Crucial component

Bangladesh‘s textile industry is a crucial component of its economy, contributing to 80 per cent of its exports and constituting 15 per cent of its GDP. The nation predominantly exports textiles to the European Union, the United States, Canada, Australia, and Japan. India plays a vital role as an export partner, supplying 20-25 per cent of the yarn that Bangladesh imports for producing garments.

Earlier this week, Bangladesh plunged into a political crisis when Sheikh Hasina resigned as the Prime Minister and fled the country. Soon after Parliament was dissolved leading to the creation of an interim government.

The 84-year-old Nobel laureate Muhammad Yunus on Thursday took oath as the head of an interim government, replacing Sheikh Hasina who abruptly resigned and fled to India leaving the country in turmoil following deadly protests against her government over a controversial quota system in jobs.

On Friday, Yunus announced the portfolios of his 16-member council of advisors and named a former top diplomat to head the Foreign Ministry. The Nobel laureate’s first task is to bring stability to Bangladesh after he responded to a call by student protesters for him to temporarily lead the country following weeks of deadly anti-government demonstrations against the government led by Sheikh Hasina.

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