Wed Sep 18 03:59:56 UTC 2024: ## Bangladesh Turmoil Has Limited Impact on Indian Trade, Says CRISIL Ratings

**Mumbai, India** – While the recent political unrest in Bangladesh has raised concerns, the impact on India’s trade has been minimal, according to a statement released by credit rating agency CRISIL Ratings. The agency does not foresee any immediate threat to India’s credit quality, but acknowledges that prolonged disruptions could affect certain export-oriented industries.

CRISIL Ratings notes that India’s trade with Bangladesh accounts for a small portion of its overall exports and imports, representing 2.5% and 0.3% respectively. However, specific sectors may experience varying degrees of impact.

**Industries Potentially Affected:**

* **Cotton Yarn:** Major exporters could see a slight revenue decline as Bangladesh accounts for 8-10% of their sales.
* **Footwear, FMCG, Soft Luggage:** Manufacturing facilities located in Bangladesh may have faced temporary disruptions during the unrest.
* **Engineering, Procurement, and Construction (EPC):** Power and other project execution could face delays due to workforce recall.
* **Power Supply:** Delayed payment of dues from Bangladesh is a potential concern.

**Sectors Likely to Benefit:**

* **Ship Breaking, Jute, Readymade Garments (RMG):** These sectors are experiencing increased sales inquiries from key export markets like the US and Europe.

**Key Considerations:**

* **Taka Depreciation:** The depreciation of the Bangladeshi taka against the rupee and other currencies poses a forex challenge.
* **Debtor Risk:** Increased reliance on letters of credit (LCs) for transactions could lead to dependence on Bangladeshi banks for settlement.

CRISIL Ratings will continue to closely monitor the situation and assess its impact on India’s credit quality. The agency advises that specific industry and sector-specific exposure will determine the long-term effects of the Bangladesh unrest.

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