A Crisil Ratings report said it also does not foresee any near-term impact on India Inc.'s credit quality.
However, a prolonged disruption may affect the income profiles and working capital cycles of some export-oriented industries for which Bangladesh is a demand center or a production center.
That and the movement of Bangladesh's taka currency will be watched, the report mentions.
India's trade with Bangladesh is relatively low, accounting for 2.5 per cent of its total exports and 0.3 per cent of total imports in the last fiscal year (FY24).
“Sectors such as cotton yarn, energy, footwear, soft luggage and fast moving consumer goods (FMCG) may see a small but manageable negative impact, while ship scrapping, jute and garments ready-made clothing (RMG) should benefit. For most others, the impact will be negligible,” the report results showed.
Merchandise exports mainly comprise cotton and cotton yarn, petroleum products, electric power, etc., while imports largely consist of vegetable fatty oils, marine products and clothing.
The report says that for cotton yarn producers, Bangladesh accounts for 8-10 per cent of sales, so the income profile of major exporters could be affected. "Its ability to offset sales in other geographies will be an important monitoring factor," he added.
Footwear, consumer goods and soft luggage companies could also see some impact due to manufacturing facilities located in Bangladesh.
These facilities faced operational challenges during the initial phase of the crisis. However, most have since started operating, although full momentum and the ability to maintain their supply chain will be essential.
Meanwhile, Bangladesh interim government's chief advisor Muhammad Yunus decided to form six commissions to reform the judiciary, electoral system, administration, police, anti-corruption commission and the constitution. According to Yunus, these commissions are expected to begin their work on October 1 and conclude in the next three months to create a democratic framework for the country.
According to the Crisil report, engineering, procurement and construction companies engaged in energy and other projects in Bangladesh could face delays in execution this fiscal year as a significant part of their workforce has been recalled to India since almost a month ago.
With only a gradual increase in the workforce expected, the revenue reserve could be lower this fiscal year compared to previous expectations. In addition, electricity supply companies could experience delays in the payment of their dues, the report states.
However, a prolonged disruption may affect the income profiles and working capital cycles of some export-oriented industries for which Bangladesh is a demand center or a production center.
That and the movement of Bangladesh's taka currency will be watched, the report mentions.
India's trade with Bangladesh is relatively low, accounting for 2.5 per cent of its total exports and 0.3 per cent of total imports in the last fiscal year (FY24).
“Sectors such as cotton yarn, energy, footwear, soft luggage and fast moving consumer goods (FMCG) may see a small but manageable negative impact, while ship scrapping, jute and garments ready-made clothing (RMG) should benefit. For most others, the impact will be negligible,” the report results showed.
Merchandise exports mainly comprise cotton and cotton yarn, petroleum products, electric power, etc., while imports largely consist of vegetable fatty oils, marine products and clothing.
The report says that for cotton yarn producers, Bangladesh accounts for 8-10 per cent of sales, so the income profile of major exporters could be affected. "Its ability to offset sales in other geographies will be an important monitoring factor," he added.
Footwear, consumer goods and soft luggage companies could also see some impact due to manufacturing facilities located in Bangladesh.
These facilities faced operational challenges during the initial phase of the crisis. However, most have since started operating, although full momentum and the ability to maintain their supply chain will be essential.
Meanwhile, Bangladesh interim government's chief advisor Muhammad Yunus decided to form six commissions to reform the judiciary, electoral system, administration, police, anti-corruption commission and the constitution. According to Yunus, these commissions are expected to begin their work on October 1 and conclude in the next three months to create a democratic framework for the country.
According to the Crisil report, engineering, procurement and construction companies engaged in energy and other projects in Bangladesh could face delays in execution this fiscal year as a significant part of their workforce has been recalled to India since almost a month ago.
With only a gradual increase in the workforce expected, the revenue reserve could be lower this fiscal year compared to previous expectations. In addition, electricity supply companies could experience delays in the payment of their dues, the report states.
