The crisis in Bangladesh poses a major challenge to the global supply chain and affects nearby countries like India. This disturbance is causing delays and increased logistical costs, particularly affecting sectors like agriculture and textiles. Industry expert and owner of JBS Group of Companies, Samir J Shah, provides insights in a Guest Column to Apace Digital Cargo, discussing the current scenario, its effects on Indian exports, and an optimistic outlook that a strong economy can overcome adversities. Read here:
The recent events in Bangladesh can only be termed as sad. We are in a civilised era and change is a constant to be respected. The way the events have spiralled is very hurting to the economy of the country and all countries with whom they have a relationship. I refrain from touching upon any social or related issues.
The stoppage of cargoes in and out of Bangladesh will hurt all countries dealing with her. Bangladesh has been accepted as a world class manufacturer of readymade garments and many other products. The dependence of international brands on Bangladesh manufacturing is very high. The same is the case with other items of manufacture.
The Logistics service providers = Forwarders; Transporters; Carriers and many other stakeholders in both Bangladesh and partnering countries have huge financial; manpower and legal issues involved. This does not include the actual owners of the cargoes.
The effect of the turmoil will be in both geographies.
Exporters are already facing challenges due to a shortage of foreign exchange in Bangladesh, affecting the movement of perishable goods. Geopolitical tensions may disrupt the supply chain globally. This will distort the import-export balance which could put pressure on the Indian rupee, dragging it to fresh lows.
It will be weeks before we will be able to understand the depth of the damage.
It is frightening to even hazard a scope of this event.
India has a special relationship with Bangladesh which in the recent years increased the logistics dependence of Bangladesh on India. New Delhi airport was offered to Bangladeshi exporters as an export gateway. Bengaluru was added recently and the efforts of offering other locations were underway.
The proposals for road and sea transportations are also on in detailed discussions.
India was also looking at co-operation to help the North East states with their international cargo movement.
It will have to be seen in the coming days how the continuation of all these wonderful, mutually beneficial initiatives develops.
As the political crisis situation is not likely to get settled immediately.
- 𝐌𝐨𝐧𝐢𝐭𝐨𝐫 𝐭𝐡𝐞 𝐒𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧: Keep a close watch on the evolving political terrain in Bangladesh and adjust your trade strategies accordingly.
- 𝐄𝐧𝐠𝐚𝐠𝐞 𝐰𝐢𝐭𝐡 𝐋𝐨𝐜𝐚𝐥 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬: Maintain open communication with your counterparts in Bangladesh, Iran, Israel to deal with any immediate disruptions.
- 𝐇𝐚𝐥𝐭 𝐚𝐧𝐝 𝐑𝐞𝐚𝐬𝐬𝐞𝐬𝐬 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬: For those planning to start afresh export-import activities in Ira, Israel and Bangladesh then this might be a prudent time to pause and observe how these geopolitical tensions unfold.
- 𝐒𝐭𝐚𝐲 𝐈𝐧𝐟𝐨𝐫𝐦𝐞𝐝 𝐚𝐧𝐝 𝐀𝐠𝐢𝐥𝐞: Regularly monitor updates from reliable sources to stay ahead of potential market shifts.
- 𝐑𝐢𝐬𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭: Implement robust risk management practices to protect your business from unforeseen disruptions.
- 𝐏𝐨𝐥𝐢𝐜𝐲 𝐀𝐝𝐯𝐨𝐜𝐚𝐜𝐲: Engage with trade associations and government bodies to advocate for policies that mitigate the impact of these geopolitical risks on the export-import sector.
There is hope – a good economy always overrides other obstacles.
