August 6th 2024.
According to S&P Global Ratings, India is a diverse exporter and a decrease in exports to Bangladesh will not significantly impact their overall trade position for the year. This announcement was made on Tuesday, amidst Bangladesh's current political turmoil, with Prime Minister Sheikh Hasina resigning due to widespread protests.
The situation in Bangladesh is said to be the worst since their independence in 1971, and their Army Chief, General Waqar-uz-Zaman, has declared that an interim government will take over. S&P's Director of Sovereign and International Public Finance Ratings, Andrew Wood, stated that during this uncertain time, domestic demand in Bangladesh is expected to be weak, which may lead to less support for exports from other countries, including India.
Wood also mentioned that India's trade profile is much larger than just its relationship with Bangladesh, as they are a diversified exporter to the entire world. Therefore, any impact on their exports to Bangladesh is not likely to have a significant effect on their overall trade position for the fiscal year. He also highlighted that India's external position is strong, making them a net creditor to the world.
In South Asia, Bangladesh is India's biggest trade partner, while India is the second-largest trade partner of the neighbouring country in Asia. However, in the past year, India's exports to Bangladesh have decreased from $12.21 billion to $11 billion, and imports have also declined from $2 billion to $1.84 billion. The main items of exports from India include vegetables, coffee, tea, spices, and sugar, while imports from Bangladesh include fish, plastic, leather, and apparel.
In conclusion, S&P Global Ratings has reassured that the current political crisis in Bangladesh will not have a significant impact on India's trade position for the fiscal year. With their diverse exports and strong external position, India is well-equipped to handle any changes in their trade relationships with neighbouring countries like Bangladesh.
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