Context:
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Bangladesh jumped four places to become India’s fifth-largest export destination in the year 2021.
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While India’s exports to many of its traditional markets shrank because of the pandemic, its exports to Bangladesh reported an increase.
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Exports to Bangladesh grew 11% in the previous fiscal year even as India’s overall exports contracted 7% because of the pandemic.
What are the Potential benefits for India owing to the rise of Bangladesh?
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Export Market: Its growing middle-class provides a big market for Indian agriculture and manufactured goods, as well as for services. For instance,
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Bangladesh depends heavily on its readymade garments sector, as it accounts for 45% of its manufacturing GDP and 85% of its exports. Whereas, India has for several years been a major supplier of cotton and cotton fabric for Bangladesh’s readymade garment industry.
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Medical Tourism: Bangladesh is already the biggest source of medical tourism to India.
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Source of FDI: Significantly, its increasingly ambitious private sector can be a major source of foreign direct investment in India’s North-East, and India’s north eastern states.