The rivalry between Bangladesh and Pakistan stretches back almost five decades, originating from Bangladesh’s independence from Pakistan in 1971. Despite this enduring tension, recent challenges faced by Bangladesh have unintentionally benefited Pakistan.
Bangladesh’s current energy crisis, with shortages in electricity and gas, has severely impacted its textile industry, leading a considerable number of orders to shift to Pakistan, boosting its export levels.
In the past two years, rising gas prices and political instability have worsened the situation in Bangladesh. The Sheikh Hasina government’s decision to raise gas prices by 150% last year sharply increased production costs in the textile sector. This led major textile buyers to reduce orders from Bangladesh, providing Pakistan an opportunity. In August, Pakistan’s textile exports hit a record $1.64 billion, marking a 13% increase from the previous year.
Political instability in Bangladesh has further shaken the confidence of American brands. Meanwhile, Pakistan’s textile industry benefits from the EU’s GSP+ (Generalized Scheme of Preferences), bolstering its exports. Bangladesh’s setbacks have thus inadvertently given Pakistan a valuable opening to expand its textile sector.
