Will Bangladesh unrest impact India's overall trade balance? S&P Global Ratings sheds light

Bangladesh is experiencing its most severe political crisis since its independence in 1971, with Prime Minister Sheikh Hasina resigning amid widespread anti-government protests.

Team Asianet Newsable

First Published Aug 6, 2024, 1:12 PM IST | Last Updated Aug 6, 2024, 1:12 PM IST

S&P Global Ratings stated on Tuesday that India's diverse export base means that a recent dip in exports to Bangladesh is unlikely to significantly affect India's overall trade position for the year.

Bangladesh is experiencing its most severe political crisis since its independence in 1971, with Prime Minister Sheikh Hasina resigning amid widespread anti-government protests. In response, Bangladesh Army Chief General Waqar-uz-Zaman announced on Monday that an interim government would assume control of the country's affairs.

Also read: 'Getting death threats': Bangladeshi Hindu woman's heart-wrenching video amid genocide claims surfaces | WATCH

Andrew Wood, Director of Sovereign and International Public Finance Ratings (Asia-Pacific) at S&P Global Ratings, noted that S&P anticipates weak domestic demand conditions in Bangladesh during this period, which is likely to reduce support for imports, including those from India.

"India is a well diversified exporter to the entire world and its trade profile is significantly larger than bilateral trade relationships with economies like Bangladesh. Whatever the impact is going to be on directly is really quite unlikely to have a meaningful impact on its overall trade position for the fiscal year... its external position is quite strong in the country and is a net creditor to the world by our calculation," Wood said in a webinar.

Also read: Bangladesh unrest: Indian astrologer's old post predicting 'trouble' for Sheikh Hasina in Aug 2024 resurfaces

Bangladesh is India's largest trade partner in South Asia, and India is the second-largest trade partner for Bangladesh in Asia.

In the fiscal year 2023-24, India's exports to Bangladesh fell to USD 11 billion from USD 12.21 billion in 2022-23. Similarly, imports from Bangladesh decreased to USD 1.84 billion from USD 2 billion in the previous fiscal year.

India's primary exports to Bangladesh include vegetables, coffee, tea, spices, sugar, confectionery, refined petroleum products, chemicals, cotton, iron and steel, and vehicles. In contrast, major imports from Bangladesh consist of fish, plastic, leather, and apparel, among other items.

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