The recent ongoing Bangladesh unrest and ouster of former Bangladesh Prime Minister Sheikh Hasina has stirred not only political but also economic ripples across the region. Apart from the political impact, the turmoil in Bangladesh will also have a significant impact economically, which is likely to have a impact in India as well.
After the massive protest over the job quota in Bangladesh, Sheikh Hasina who led the country for over 15 years resigned from the power and fled the South Asian country on August 5. Later, Nobel laureate Muhammad Yunus appointed as interim leader by the following the ouster of Hasina.
Economic Fallout: The Impact on Indian Companies
India, being Bangladesh's second-largets partner in Asia after China, the political crisis has had in someway affected the Indian business, especially those with a substantial operations or market interest in the country.
In the fast-moving consumer goods (FMCG) sector, several companies had felt a certain level of impact due to the crisis. Although political stability in Bangladesh does not always stand into a long term economic impacts for Indian companies.
According to reports, around USD 300 million worth of export trade has been disrupted due to the ongoing crisis in the country and key checkpoints such as Changrabandha border post in West Bengal, are facing delays and standstills.
This also stresses the economic relation between the two countries.
For instance, Marico, also known for its Saffola brands, in Bangladesh contributes around 11 to 13 per cent of its revenue. Similarly, Pearl Global Industries's 25 per cent of revenue comes from Bangladesh. Following the crisis, the operations of its facilities in Bangladesh are currently on hold due to the urest.
In addition, company such as Emami among other companies like Bayer Corp, GCPL, Britannia, and Asian Paints amid the ongoing crisis sees a significant threat to its sales in the region.
However, Indian firms are closely monitoring this unrest as the political upheals will affect their operations and trade relations in the upcoming quarters.
