Textile stocks in India gain amid raging protests in Bangladesh

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By S Jha

New Delhi, November 23: Shares of textile companies have posted almost 10 per cent and above gains in the last few days. The move in the share prices of textile companies has come in the backdrop of ongoing protests in Bangladesh by workers who are demanding higher wages.

With reports of hundreds of textile factories shut in Bangladesh because of the protests, the Indian companies are witnessing investors taking interest in them. The likes o KPR Mills, Nitin Spinners, Mayur Uniquoter, and others have been gaining on the stock market in the last few days.

Reports say that Bangladesh trade unions are demanding higher wage rates for the labourers working in textile industries. There are similar trends seen in Cambodia where there are possibilities of upward wage revisions for workers in textile sector. Bangladesh, Vietnam and Cambodia on accounts of cheaper labourers has been at advantage over Indian textile players so far, claim market participants.

They stated that “textile supply chain shift to India may bring windfall gains to companies. Textile industries in India seem to be overcoming higher wage issues. If the upward wage revisions take place in Bangladesh, it would be extremely positive for Indian textile player”.

The Spinoff in a report said that the “committee overseeing the category proposed a 56 percent increase in the basic monthly wage for four million workers in the textile sector in Bangladesh, almost all of them are women, the equivalent of $94 per month. Labor rights groups and unions want more than double that level; therefore, they refused the offer, and protests further increased, especially in the capital, Dhaka”.

Bangladesh is witnessing many demonstrations, involving 150 factories and 11,000 protesting workers. Occupation of factories by workers has been seen in Bangladesh.

Channel News Asia in a report said that “Bangladesh’s 3,500 garment factories account for around 85 per cent of the South Asian country’s $55 billion in annual exports, supplying major Western brands including Adidas, Gap, H&M and Levi Strauss”. It quoted an AFF report which said that “more than 250 garment factories have been shut in the protests. Up to 50 factories have been ransacked and vandalised, including four or five which were set alight”.

The Diplomat in a report stated that “Bangladesh is the second largest garment-producing country in the world after China. Its nearly 3,500 factories employ some 4 million workers – most are women – according to the Bangladesh Garment Manufacturers and Exporters Association”.

It said that “protests erupted after BGMEA offered to increase the monthly minimum wage by 20 percent to reach $90, instead of the $208 demanded by the workers”.