Did you know that India is the second-largest trading partner of Bangladesh, with a bilateral trade volume of $10.9 billion in FY21? However, this trade relationship is under threat, as a growing number of Bangladeshis are calling for a boycott of Indian products and a campaign to oust India from their country.

The boycott campaign against Indian products in Bangladesh is a manifestation of the growing anti-India sentiment and discontent among some sections of the Bangladeshi society, who feel that India is not respecting the sovereignty and interests of Bangladesh. The campaign, which started on social media with the hashtag #IndiaOut, urges people to protest India and boycott Indian products, especially in the fast-moving consumer goods (FMCG) sector, which includes packaged foods, beverages, toiletries, over-the-counter drugs, and similar consumables. The campaign also accuses India of meddling in Bangladesh’s political affairs and elections, and of supporting the ruling Awami League party, which is seen as pro-India by the opposition and some civil society groups.

I will analyze the impact of the boycott campaign on the Indian economy, and how it could affect the trade and ties between India and Bangladesh. I will use data news articles, and reports to provide some estimates of the value and growth of the FMCG market in Bangladesh, and the share and performance of Indian companies in it. 

FMCG stands for fast-moving consumer goods, which are products that are sold rapidly and at a relatively low cost, such as packaged foods, beverages, toiletries, over-the-counter drugs, and similar consumables. According to one source, the gross sales value of FMCG in Bangladesh rose to $3.9 billion in FY22, up from $3.7 billion a year ago. If the figure is converted into local currency, it will be over Tk 37,000 crore (@Tk95 for a dollar). Another source⁴ estimates the FMCG market in Bangladesh to be around $2.5 billion as of 2019. However, these figures may not reflect the exact value of the Indian FMCG products market in Bangladesh, as they include both local and foreign brands.

Indian FMCG companies have a significant presence in Bangladesh, as they offer a variety of products that cater to the needs and preferences of the consumers. Some of the well-known Indian FMCG brands in Bangladesh are Marico, Emami, Dabur, Asian Paints, Godrej, and others. According to a report by Emerging Rating, Indian FMCG companies accounted for about 15% of the total FMCG market in Bangladesh in 2019, with a value of around $375 million. The report also stated that Indian FMCG companies have been growing at a faster rate than the overall FMCG market in Bangladesh, with a compound annual growth rate (CAGR) of 18% from 2016 to 2019, compared to the market CAGR of 12%.

Impact of the boycott campaign on the Indian economy

The boycott campaign against Indian products in Bangladesh could have both direct and indirect effects on the Indian economy, depending on the extent and duration of the campaign, and the response of the Indian government and businesses. Some of the possible impacts are:

Reduced exports and trade surplus

 India is one of the largest trading partners of Bangladesh, with a bilateral trade volume of $10.9 billion in FY21. India enjoys a huge trade surplus with Bangladesh, as it exports more than it imports from the country. In FY21, India’s exports to Bangladesh were worth $9.4 billion, while its imports were only $1.5 billion. This means that India had a trade surplus of $7.9 billion with Bangladesh, which accounted for about 5.6% of India’s total trade surplus of $141.7 billion in FY21. If the boycott campaign succeeds in reducing the demand for Indian products in Bangladesh, especially in the FMCG sector, India’s exports and trade surplus could decline significantly, affecting its balance of payments and foreign exchange reserves.

Lower GDP and employment

The FMCG sector is one of the key contributors to India’s GDP and employment, as it accounts for about 40% of the consumer expenditure and 10% of the manufacturing output in the country. The sector also employs about 15 million people directly and 30 million people indirectly in India. If the boycott campaign leads to a loss of market share and revenue for Indian FMCG companies in Bangladesh, it could have a negative impact on India’s GDP and employment, as the companies may have to cut down on their production, investment, and workforce. According to a study by the Federation of Indian Chambers of Commerce and Industry (FICCI), a 10% increase in the FMCG sector’s output can lead to a 1.7% increase in India’s GDP and a 2.3% increase in employment. Conversely, a 10% decrease in the sector’s output can lead to a 1.7% decrease in India’s GDP and a 2.3% decrease in employment.

Reputational damage and diplomatic tensions

The boycott campaign against Indian products in Bangladesh could also damage India’s reputation and image as a friendly and reliable partner in the region and the world. The campaign could create a perception that India is interfering in the internal affairs of Bangladesh and exploiting its trade relations for its own interests. This could erode the trust and goodwill that India has built with Bangladesh over the years, and affect the cooperation and collaboration between the two countries on various issues, such as security, connectivity, energy, water, and culture. The campaign could also escalate the diplomatic tensions between India and Bangladesh, and hamper the efforts to resolve the outstanding disputes and challenges, such as the sharing of the Teesta river water, the Rohingya refugee crisis, and the border management.

The “India Out” “Boycott India” campaign in Bangladesh is a manifestation of the growing anti-India sentiment and discontent among some sections of the Bangladeshi society, who feel that India is not respecting the sovereignty and interests of Bangladesh. The campaign could have a significant impact on the Indian economy, as it could reduce the exports and trade surplus of India, lower its GDP and employment, and damage its reputation and image. The campaign could also strain the bilateral relations between India and Bangladesh, and undermine the strategic partnership and friendship that the two countries have developed over the years. Therefore, it is important for both India and Bangladesh to address the root causes and grievances behind the campaign, and to engage in constructive dialogue and cooperation to resolve the issues and challenges that affect their mutual interests and welfare. India should also take steps to diversify its export markets and products, and to enhance its competitiveness and quality in the FMCG sector, to mitigate the risks and losses due to the boycott campaign. Bangladesh should also consider the benefits and opportunities that it gains from its trade and ties with India, and the costs and consequences that it may incur from the boycott campaign. Both countries should also promote people-to-people contacts and cultural exchanges, to foster mutual understanding and respect, and to counter the negative propaganda and misinformation that fuel the boycott campaign.