Indian exports of two-wheelers, trucks, and buses to Bangladesh face significant disruption due to ongoing civil unrest in the country.
The ongoing deadly civil unrest in Bangladesh is set to severely impact Indian exports of two-wheelers, trucks, and buses this month. Bajaj Auto, India’s largest exporter of two- and three-wheelers, reports that around 3.6 percent of its monthly exports go to Bangladesh. Hero MotoCorp also heavily relies on the Bangladesh market, with the nation contributing 20-30 percent of its sales outside India.
Indian two-wheeler manufacturers have established manufacturing facilities in Bangladesh to comply with local regulations and avoid high customs duties. Hero MotoCorp operates a joint venture manufacturing plant in Jessore, while TVS Motor has a joint venture with T V Sundram Iyenger & Sons.
“Bangladesh is an important market for both two-wheelers and three-wheelers. We export almost 5,000 to 6,000 units per month there. Hopefully, the situation will come under control soon,” said Rakesh Sharma, Executive Director of Bajaj Auto.
In FY24, Indian two-wheeler exports to Bangladesh accounted for 3.6 percent by value, slightly declining from 3.69 percent in FY23 and 3.72 percent in the previous year, according to data from the Ministry of Commerce and Industry.
Bajaj Auto dominates the Bangladeshi market, which sees 450,000-500,000 two-wheelers sold annually, with a 20-23 percent market share. Hero MotoCorp follows with a 15-16 percent market share, selling approximately 60,000 units per year. Both companies have been active in Bangladesh for over a decade.
Bangladesh also serves as a crucial export destination for Indian bus and truck manufacturers like Tata Motors, Ashok Leyland, and Eicher Motors. “In the pre-Covid year of 2018-19, commercial vehicle exports from India were 34,000 to 35,000 units. Since then, it hasn’t recovered, bottoming out to 6,000 units in 2023-24 and was on the brink of recovery,” said Vinod Aggarwal, MD of Volvo Eicher Commercial Vehicles.
Industry executives report that factories in Bangladesh have been closed for the past three days due to the escalating unrest.
Rahul Bharti, Executive Director of corporate affairs at Maruti Suzuki India, commented, “Our exports are diversified across 100-odd countries, with the bulk going to far-off destinations like Latin America. So, the Bangladesh crisis does not affect us.”
Despite the disruptions, it’s notable that the overall share of Bangladesh in India’s auto exports has been shrinking since the pandemic. In 2023-24, India exported automobiles worth $175 million (₹1,500 crore) to Bangladesh, down from $223.68 million the previous year and $333.95 million the year before.
Source: The Economic Times
