Digital transformation and labour governance in the India–Bangladesh textile value chain: competing narratives of automation, skills and upgrading

1 Introduction

Industry 4.0 has emerged as an important component of modern industrial transformation, especially in industries experiencing stiff international competition, shorter lead time, quality concerns, and demand for increased visibility in the supply chains. In the textile and garment industries, digital transformation is characterised by automation, connectivity, big data, process integration, and intelligent production management aimed at improving efficiency and resilience (International Labour Organisation, 2020; Kanupriya, 2021; Kabir et al., 2019; Gupta, 2015).

The study of India and Bangladesh will be useful in investigating this issue because the two countries have close ties with each other in the textile and clothing value chain and hold different places in the chain. Analysis by the World Bank has revealed the existence of strong links between India and Bangladesh with India being specialised in upstream stages like cotton, silk, yarn, and fabric, while Bangladesh is specialised in downstream apparel production and export (Kabir et al., 2019). The reason why these links are important is that digital transformation does not happen in a vacuum in national boundaries but interacts with sourcing arrangements, tariffs, standards, logistics, and shifts in global production (Kabir et al., 2019; Gupta, 2015). Bilateral trade relations are economically significant too as trade statistics indicate that Bangladesh imports much more from India than exporting to India, implying that India is an important supplier of intermediaries to Bangladesh’s production chain (OEC, 2026). At the same time, studies of recent developments in textile trade reveal how changes in market access, tariff preferences, and sourcing patterns affect the competitiveness of India and Bangladesh vis-a-vis US and Europe (Vajiram and Ravi, 2026; Mishra, 2026). Consequently, digital transformation in India cannot be studied separately from labour productivity and employment in Bangladesh, and vice versa (Kabir et al., 2019).

Labour is highly critical since it is the most significant source of employment in both nations in terms of the textile and clothing sector, though in diverse ways. According to the Ministry of Textiles, the textiles sector is among the most crucial sectors in the country as it involves 45 million individuals working directly in the textiles industry and another 100 million working indirectly in the textile sector (Ministry of Textiles, Government of India, 2025). In Bangladesh, ready-made garments are highly crucial in generating revenue and providing employment to the women workers undertaking labour-intensive production activities (IMF, 2022; ILO Evaluation Office, 2020). Digital transformation in this case entails not just new technologies but reorganisation of labour, access to training, labour inspection, worker voice, and cost distribution (International Labour Organisation, 2020; IndustriALL, 2026).

This article, therefore, evaluates the construction of digitalisation and automation in the interlinked textile industry of India and Bangladesh in regard to skills development, labour regulation and integration within the value chains. It focuses on analysing public discourses about the relationship between technological upgrades and labour outcomes rather than estimating automation risk through predictive modelling (Cheong et al., 2023). This aspect is highly important as the public discourse helps to inform policy, management strategy and institutional responses, especially in emerging economies where the adoption of technological innovation differs between firms and sectors as well as facing the challenge in governance (Kanupriya, 2021). It, therefore, follows that the digital transformation of the India-Bangladesh textiles value chain requires value chain governance approach rather than purely national and technological approaches. The managerial narratives focus on competitiveness, resilience, and accountability whereas others focus on the lack of institutional capacity to reskill, represent the workers and protect them socially, especially in labour-intensive production (International Labour Organisation, 2020; IndustriALL, 2026; UNESCO, 2026). This study, therefore, evaluates these contrasting narratives in order to understand the framework for how Industry 4.0 may affect labour not only at firm level but also at interconnected production systems (Kabir et al., 2019).

2 Literature review

2.1 Digital transformation in textile

According to literature, digital transformation of the textile industry involves the use of digital technologies and systems in the manufacturing and logistics chain of the industry through automation, sensing, data processing, intelligent control systems and enhanced digital quality management systems (Dal Forno et al., 2023; Deepthi and Bansal, 2024; Kanupriya, 2021). In the textile and apparel sectors, these technologies are usually linked with productivity growth, waste reduction, quality consistency, predictive maintenance, traceability and faster responses to buyer demands (Sabareesh et al., 2024; Kanupriya, 2021). Much of the applied literature also emphasises the role of digital technologies in linking production with sustainability goals, particularly through process efficiency and reduced resource use (Sabareesh et al., 2024).

However, adoption remains uneven. Studies on Industry 4.0 in the textile and apparel industry indicate that the sector continues to lag in the adoption and implementation of advanced digitalisation and smart-factory systems, with higher level of adoption in process optimisation and monitoring than in fully integrated smart-factory systems (Dal Forno et al., 2023; Deepthi and Bansal, 2024). Studies of the Indian textile industry similarly suggest that digitalisation should be understood in relation to structural challenges, with technology uptake shaped by structural inequalities, organisational preparedness and labour market segmentation (Kanupriya, 2021). This uneven adoption is important in emerging markets because the extent and location of digital technology implementation are influenced by firm size, access to capital, export orientation and infrastructure readiness (Mansour and Bouchachia, 2026). It also matters because the potential for automation varies across the textile-value chain. Mechanised and data-driven optimisation of upstream production processes, such as spinning and weaving, may be more feasible than automation in downstream garment production, which remain highly dependent on flexible materials handling and labour-intensive assembly (International Labour Organisation, 2020; Kabir et al., 2019).

Figure 1 conceptually illustrates that upstream textile processes such as spinning and weaving may be more amenable to mechanised and data-driven optimisation than downstream garment operations that still depend heavily on flexible material handling and labour-intensive assembly (International Labour Organisation, 2020; Kabir et al., 2019).

2.2 India and Bangladesh in a shared value chain

The significance of the India- Bangladesh relationship lies not simply in geographical proximity but in their integration within a cross-border textile and clothing value chain. (Ahmed and Carter, 2018) argue that the two countries have significant value-chain linkages, with India supplying a wide range of intermediate inputs and Bangladesh focusing on the final assembly and export of apparel. They also find that tariffs, non-tariff barriers, standards-related frictions and policy distortions can impede a more efficient patterns of specialisation and upgrading in the region (Ahmed and Carter, 2018).

This value chain perspective is important because it moves the analysis away from national competitiveness in isolation. If India digitises its upstream production segments, this may affect the cost, quality and delivery times of inputs available to Bangladeshi garment manufactures. Conversely, if Bangladesh restructures production around faster, more traceable and digitally coordinated export systems, this may alter sourcing pressures and product strategies for Indian textile producers (Kabir et al., 2019; Gupta, 2015).

Figure 2 illustrates the complementary positions of India and Bangladesh within the textile value chain. India is predominantly positioned in upstream activities, including cotton and silk production, yarn and fabric manufacturing, while Bangladesh is predominantly positioned in downstream apparel manufacturing and export. Cross-border flows of intermediate inputs are mediated by digital coordination systems, trade policies, and buyer requirements. This creates a chain of interdependent opportunities and vulnerabilities, as technological upgrading, market shifts and policy changes in one country can have labour and competitiveness implications for the other (adapted from Kabir et al., 2019; Gupta, 2015; Das, 2017; Mishra, 2026).

The value-chain approach also helps examine why labour outcomes should not be examined only at the level of individual factories. Technological and production changes may generate cascading effects on employment through input–output relationships across borders. Lead- time reductions or improved quality in Indian production of yarn and fabrics could benefit Bangladesh’s apparel export competitiveness, but could also result in an uneven distribution of value capture along the chain (Kabir et al., 2019). Similarly, trade and industrial policy decisions in either country could strengthen some groups while disadvantaging others, with consequences for labour structure, investment incentives and labour bargaining power (Kabir et al., 2019; Apparel Digest, 2026) (Table 1).

Table 1. Comparative position of India and Bangladesh in the value chain of textiles and clothing.

2.2.1 Analytical implication

India and Bangladesh hold distinct but interconnected positions within the textile and clothing value chain. India’s upstream specialisation creates opportunities for data-driven and automation-based manufacturing, whereas Bangladesh’s downstream concentration places greater emphasis on workforce transition and adjustment capacity. These differences indicate that technological changes in one part of the value chain may affect competitiveness and the movement of labour across countries. The interdependence between two economies therefore highlights the limitations of a purely nation-centric approach to policy and supports a more integrated value-chain perspective.

2.3 Automation, labour and uneven adjustment

Previous studies suggest that routine and repetitive jobs are more likely to be substituted than non-routine jobs that require adaptive thinking and skilled movements. In apparel manufacturing, by contrast, automation remains partial because of the complexity involved in handling soft material (International Labour Organisation, 2020; Fana et al., 2024). Research by the ILO on automation, employment and reshoring in the apparel industry highlights that companies often view automation as a means of improving efficiency and resilience, while recognising the technical and economic constraints on full substitution (International Labour Organisation, 2020).

This distinction between partial and complete automation is central to comparing the two countries. In India, automation will proceed further downstream in capital-intensive segments, whereas in Bangladesh, the ready-made garment industry still depends greatly on manual labour. Hence, in addition to the technological aspect, automation in Bangladesh raises some issues related to employment and macroeconomics. As stated by Kabir et al. (2019) and IMF (2022), the automation in the ready-made garments industry in Bangladesh should be evaluated taking into account the importance of the industry for the country’s economy and the employment rate in the industry. The labour impacts of automation extend beyond job displacement. Automation and digitisation can change how tasks are performed, work intensity, workplace surveillance, shop-floor hierarchies, and skills requirements. Labour experts suggest that technological transitions in export-oriented industries may occur in environments where social protections, worker consultations and labour inspections are limited, increasing the likelihood that adjustment costs will be transferred to workers (IndustriALL, 2026; ILO Evaluation Office, 2020). In Bangladesh, for example, concerns relating to labour inspections, freedom of association and anti-union discrimination indicate that governance capacity is an important dimension of the automation debate.

2.4 Skills and labour governance

UNESCO’s current focus on skills development for work and life provides an important policy framework for interpreting the implications of digitalisation in the textile industry. According to UNESCO, technical and vocational education and training should support employment, inclusion and transition into digital and green economies while addressing barriers related to gender, geographic location and inequities (UNESCO, 2026; UNESCO, 2025). This is particularly important in the Indian and Bangladeshi context because digitalisation requires not only digital literacy but also technical, managerial, maintenance and data-related skills (UNESCO, 2026). However, discussion of skills development can be overly reductive when framed solely as a problem of skills shortage. Skills are institutionally structured through training systems, employer practices, credentialing systems, job markets, and opportunities for workplace mobility. When firms engage in selective automation without developing reliable training and career development systems, high-skilled jobs will be available to a select few employees whereas others will suffer from heightened workload intensity or job insecurity (International Labour Organisation, 2020; Kanupriya, 2021). This is particularly true of export-oriented industries because productivity enhancements will be advantageous to buyers whereas the social implications of workforce adjustment will not necessarily be taken into account (International Labour Organisation, 2020; Kabir et al., 2019).

Thus, the issue of labour governance is crucial when discussing the implications of technological innovations. In Bangladesh, the problems related to freedom of association and compliance with labour laws and rights persist even in view of the positive experience gained due to ILO monitoring and union reports (IndustriALL, 2026). In India, the digitalisation of textiles industry could be discussed against the background of modernisation policies focusing on competitiveness and production scale, yet there are labour-related distributional issues as well, especially those related to gender and informal employment (Kanupriya, 2021; Ministry of Textiles, Government of India, 2025). Hence, the literature suggests the need for further research on the connection between digital transformation and institutional capacity and labour governance, as well as productivity and innovation. Overall, existing studies suggest that digital transformation in the textiles industry cannot be discussed from the technological and national perspectives alone. Existing literature pays attention to automation, skills, labour governance and value chain upgrading but addresses these aspects separately from one another. Thus, in the India-Bangladesh textiles value chain technological transformations take place within an interconnected institutional-economic environment, which calls for a unified approach to analysis of digital transformation as perceived by various stakeholders in regional value chains.

2.5 Research gap

While considerable research has been done on the relationship between Industry 4.0, global value chains, and labour governance, there remain several important gaps in our knowledge on the matter. Firstly, there is a need for a theoretical gap to be filled, as previous research generally considers digital transformation, automation, value-chain upgrading and labour-related effects as distinct occurrences; yet, little information has been provided in order to consider the interconnection of these processes in a connected regional production system such as the India-Bangladesh textile value chain. In particular, the literature on the matter is scarce in terms of explaining the interrelation of technological upgrading of one segment of a value chain and competitiveness and labour-related consequences experienced by another segment as a result. Secondly, a methodological gap needs to be addressed as previous studies have mainly used surveys at a firm level, sectoral statistics and/or case studies that have been specific to certain countries, while comparative secondary qualitative studies investigating how different stakeholders construct and challenge the meaning of digital transformation have received little attention. The lack of comparative secondary qualitative research has left us with limited knowledge about the competing narratives according to which governments, firms, trade unions, and policymakers interpret automation, skills and adjustments related to labour in an interconnected economy. Finally, there is a policy gap that needs to be closed, as policy discussions are mostly national-centric when it comes to digital transformation, without paying sufficient attention to the cross-border aspects of automation, employment, sourcing and labour governance in relation to digital transformation.

2.6 Theoretical framework

This research establishes a conceptual framework that considers the relationships between digital transformation, automation, skill development, labour governance, worker outcomes, and regional competitiveness in the India-Bangladesh textile and apparel value chain. Digital transformation refers to the adoption of automation, Industry 4.0 technologies, digital production systems, digital coordination, and traceability in the production and value chain processes. This creates new modes of work organisation and skill needs. While the outcomes of technological upgrading depend on technology alone, labour governance – which includes regulation, worker protections, social dialogue, training, labour inspection, and social protection – plays a critical role in determining who gains and losses from technological change in terms of firms and workers. Such labour governance conditions influence worker outcomes, such as job creation, job loss, task restructuring, work intensification, access to training, employment quality, and upward mobility. Worker outcomes affect regional competitiveness through the impacts they have on productivity, quality, resilience, labour stability, sourcing practices, and the ability of India and Bangladesh to upgrade in the regional textile value chain. The framework adopts an interpretive approach. This framework is useful in analysing how various stakeholders create the relationships between technological upgrading, skills, labour governance, worker outcomes, and regional competitiveness within the interrelated regional production system.

Figure 3 highlights the research design of this project. First, we begin with digital transformation, which alters the process of production, coordination, and organisation of work through the adoption of new technologies and automation. In turn, it creates new skill demands and may lead to differentiated workforce transitions in upstream textile production in India and downstream apparel manufacturing in Bangladesh.

Labour governance functions serve as a mediating institutional variable in this scheme, not an outcome of the process, in contrast with the traditional models of industrial development and growth. Such labour market institutions as regulation, labour inspection, workers’ representation, social dialogue, education and training, and social protection determine whether technological changes will be inclusive and produce benefits for workers, such as productivity employment and mobility, or will increase their vulnerability by means of displacement, intensification of work, precariousness of re-employment, and lack of access to training. Lastly, the third component is competitiveness, which is defined broadly to encompass productivity, export performance, quality, reliability, sourcing relationships, and value-chain upgrading capability. This way, we account for the interdependence of India’s upstream textile production and Bangladesh’s downstream apparel production. Our theory does not rely on a self-evident assumption that digital transformation will automatically improve competitiveness and welfare of the workers.

3 Research aim and questions

The study has three main aims. Firstly, it evaluates digital transformation in relation to competitiveness and value- chain upgrading within the India-Bangladesh textile and clothing value chain (Kabir et al., 2019; Kanupriya, 2021). Second, it explores how different stakeholders frame labour-related issues, particularly automation, skills development and worker vulnerability (International Labour Organisation, 2020; IndustriALL, 2026; IMF, 2022). Thirdly, it explores how value-chain integration connects industrial upgrading in one country with labour adjustment and policy challenges in the other (Kabir et al., 2019; Gupta, 2015).

The research questions are:

• How is the process of digital transformation told in the interdependent textile sector across India and Bangladesh?
• What competing narratives emerge around automation, skills and labour governance?
• How does value-chain integration shape the interpretation of labour outcomes across the two countries?

4 Methodology

The study adopts a secondary qualitative research design, based on publicly accessible online sources. It follows the seven-step methodology for secondary qualitative research proposed by Cheong et al. (2023). The design is appropriate because the study examines how digital transformation, automation, skills and labour governance are framed in public policy documents, industry reports, news articles and organisational communications. Such sources provide evidence of how different stakeholders define, interpret and contest the labour and institutional implications of digital transformation within the India-Bangladesh and apparel value chain (Cheong et al., 2023). The secondary qualitative method is a structured basis for examining how different actors construct meanings and implications of the digital transition in this regional production system.

4.1 Data sources

The corpus consists of materials from five source categories: (Ahmed and Carter, 2018) reports and working papers from international organisations, particularly the ILO, UNESCO, the IMF and the World Bank; (Apparel Digest, 2026) government and official policy documents about textiles, labour and industrial development; (ADB and IsDB Institute, 2023) industry and trade analyses of textile value chains and sectoral transitions; (Bahl, 2025) labour-oriented and NGO materials concerning workers’ rights, labour inspection and social protection; and (BRAC University et al., 2023) media and trade-press materials addressing automation, trade shifts and sectoral transformation (Kabir et al., 2019; IndustriALL, 2026; IMF, 2022).

The documents were collected between March and May 2026 using Google Scholar as the primary search engine, together with official organisational repositories and websites, including those of the International Labour Organisation (ILO), UNESCO, IMF, World Bank, Ministry of Textiles (Government of India), IndustriALL and other relevant government portals. Search terms included combinations of digital transformation, Industry 4.0, automation, labour governance, skills, Indian, Bangladesh, textile industry and textile value chain. Documents were included only if they were published in English between 2015 and 2026 and were relevant to the textile and apparel industry. The corpus included peer-reviewed journal articles, government documents, reports from international organisations, labour organisations, and reputable media and trade-press sources. Materials unrelated to the textiles and apparel industry were excluded.

Following the screening and quality-assessment process, 60 documents were retained as the final analytical corpus (Appendix A).

4.2 Inclusion logic

The selection criteria comprised three conditions. First, sources had to address India, Bangladesh, or the interaction between the two countries within the textile apparel industry. Second, sources had to discuss at least one of the following themes: digital transformation, automation, skills, labour governance, or value-chain restructuring. Third, sources had to contain substantive interpretative or analytical discussion relevant to the research questions (Cheong et al., 2023; Kabir et al., 2019). These criteria established a focused source base for the narrative analysis (Cheong et al., 2023). The exclusion criteria were: (1) documents unrelated to the textile apparel sector, (2) duplicate records, (3) documents containing insufficient substantive or analytical discussion; and (4) sources that could not be verified or were not from recognised academic, governmental, labour, industry or international-organisation sources. The final analytical corpus comprised 60 documents: 7 documents primarily on India, 13 documents primarily on Bangladesh and 40 addressed bilateral, regional, or broader global issues relevant to the India-Bangladesh textile and apparel value chain. This distribution reflects the study’s focus on interlinked regional value chains rather than on individual national experiences. Reporting the corpus composition also provides context for interpreting the narrative findings and helps clarify the distribution of source material across the study.

Table 2.

4.2.1 Document quality assessment

The credibility, relevance, publication date and contribution to the research objectives were assessed for all documents. Only documents from recognised academic, governmental, international and industry sources were included for the final analysis (Table 2).

Table 2. Data corpus and inclusion criteria.

Total corpus: 60 documents.

Inclusion criteria:

• The document focused on India, Bangladesh, or the India-Bangladesh textile and apparel value chain.
• The document addressed at least one of the following themes: digital transformation, Industry 4.0, automation, skills development, labour governance, trade policy, or value-chain restructuring.
• The document contained substantive narrative, interpretive, or policy-oriented discussion rather than purely statistical reporting.
• The document was publicly accessible and published by a recognised academic, governmental, industry, labour, or international organisation.
• Documents were selected to ensure representation of managerial, policy, labour and trade perspectives.

4.2.2 Corpus development and analytical procedures

Throughout the identification and screening of documents, a record of the search was maintained to enhance methodological transparency and repeatability. Google Scholar and official repositories, including those of the International Labour Organisation (ILO), UNESCO, IMF, World Bank, Ministry of Textiles (Government of India), IndustriALL, ETI Bangladesh, BRAC University, were searched between March and May 2026. The specified inclusion and exclusion criteria were then applied to screen the identified documents. Of the 85 records initially identified, 10 duplicate records were removed and 15 records were excluded during screening, resulting in a final analytical corpus of 60 documents (Appendix A). The final corpus comprised 40 bilateral, or global sources, 7 India-focused sources and 13 Bangladesh-focused sources.

4.2.2.1 Search record summary

Table 4.

4.2.2.2 Coding framework

The coding process used both deductive and inductive approaches. The initial codes were informed by the literature on global value chains, labour governance and digital transformation, while additional codes emerged from the documents during the analysis. Coding was conducted manually and iteratively refined through multiple readings of the corpus.

Table 5.

4.2.2.3 Source-to-theme matrix

Table 6.

4.2.2.4 Theme development process

Theme development involved four stages. First, all the documents were read and assigned preliminary codes. Second, similar codes were grouped into broader categories. Third, categories were compared across stakeholder groups to identify patterns and differences. Finally, four overarching narratives were constructed through iterative review and interpreted through the lenses of global value chain governance, value-chain upgrading, labour governance and institutional discourse theory.

4.3 Analytical procedure

The analysis followed seven stages adapted from Cheong et al. (2023) definition of scope; identification of public sources; relevance screening; corpus organisation by country and stakeholder type; coding of recurrent concepts; grouping of codes into narrative themes; and interpretation through a value-chain governance lens.

4.4 Analytical lens

The study combines thematic discourse analysis with a value-chain perspective. Thematically, it analyses how different stakeholder groups frame automation, digital transformation, skills and labour. Analytically, these framings are interpreted through the structural interdependence between upstream textile manufacturing activities in India and downstream apparel production in Bangladesh (Kabir et al., 2019). This perspective helps explain why similar narratives concerning competitiveness and digitalisation may produce different labour implications across interconnected industries (International Labour Organisation, 2020; Gupta, 2015). The analysis focuses on how stakeholders construct narratives concerning digital transformation. Accordingly, discussion of labour vulnerability, competitiveness and cross-border implications are interpreted in relation to the narratives identified within the analytical corpus.

5 Findings

Table 3 shows narrative themes and actor framing.

Table 3. Narrative themes and actor framing.

5.1 Analytical summary

The four stories reveal that the process of digital transformation in the India-Bangladesh textile value chain is perceived differently by various groups of stakeholders. Competitiveness-focused stakeholders pay more attention to upgrading efficiency and positioning themselves in the market, while labour -oriented stakeholders are concerned about unequal distribution of adjustment costs. Skill development is often considered as an option for helping workers adjust to new conditions, although the success of this option depends on the institutional context and training opportunities. The documents also show that technological change and its impact on workers can be beyond the national boundary.

5.1.1 Narrative one: Digitisation as a competitiveness and strategic upgrading (global value chain governance perspective)

The most obvious narrative is that digitalisation as a key competitive tool and means of strategic upgrading. Throughout the policy, trade and management literature, automation and digitisation are described as a means of coping with increased global competition, quality, traceability, and supply chain uncertainty (International Labour Organisation, 2020; Kanupriya, 2021). Hence, Industry 4.0 technologies are seen as a necessity in export-oriented manufacturing because of the need to maintain competitiveness and cope with changing market demands (International Labour Organisation, 2020; Gupta, 2015). In India, the narrative centers on industrial modernisation and moving towards high value processes through greater integration of the manufacturing, logistics and technological capability (Kanupriya, 2021; Ministry of Textiles, Government of India, 2025). Since India takes an increasingly active part in upstream production, such as cotton, yarn, and fabric manufacturing, digitalisation in India can be perceived in terms of process optimisation, quality control, scalability and compliance with international standards of manufacturing (Kabir et al., 2019; Gupta, 2015; Singh, R. et al., 2025). This narrative has been extended beyond India’s production system since the products of Indian textile manufacturers serve in downstream production of apparels in Bangladesh.

For instance, narratives of competitiveness in Bangladesh are intrinsically linked to the export-led industrial development model of this country and its buyer-driven garment sector. Hence, digital transformation of Bangladesh is discussed in relation to speed, efficiency, compliance, cost and reliable delivery of garments in the export system of this country (IMF, 2022; ILO Evaluation Office, 2020). Although in the past the competitive advantage of Bangladesh has been associated with labour cost efficiency and labour-intensive assembling, currently, there is a different discourse regarding digital transformation, which considers automation as a factor of export competitiveness (International Labour Organisation, 2020; IMF, 2022). From the point of view of bilateral relations, this narrative manifests itself through the idea that the deeper integration between the textile supply chain upstream of India and the garment industry downstream of Bangladesh could result in the development of a more efficient regional textile and garment value chain. Thus, according to Das (2017), trade policy, trade facilitation, standardisation and institutional arrangements can be used by the two countries in order to derive additional benefits from value-chain linkages. UN ESCAP (2022) has also pointed out at the potential of increased trade in textile and garment intermediates between South Asian countries including India and Bangladesh. Both the abovementioned perspectives add a regional aspect to competitiveness narratives and imply that digital upgrading can bring benefits not only to individual companies, but also to the coordination of production and supply of goods in multiple countries (Das, 2017; UN ESCAP, 2022; Bahl, 2025). Such an interpretation fits into the framework of global value-chain governance theory that considers technological upgrading as an important factor of competitiveness of production systems. The examined documents show that competitiveness narratives are not confined by national borders. Trade and policy sources often emphasise the importance of the improvements in the quality and reliability of textile production in India for the performance of Bangladesh in exports. In particular, according to UN ESCAP (2022), there is potential in the development of regional sourcing arrangements that would promote South Asian textile competitiveness.

5.1.2 Narrative two: Automation as uneven labour restructuring instead of sole technological progress (labour governance approach)

The second narrative does not accept the premise that automation is a form of technological progress that brings only benefits. Trade unions, non-governmental organisations and critics see automation as an unequal process of labour market restructuring in which the advantages of efficiency and productivity gains can go to different parties from those who face adjustment costs (International Labour Organisation, 2020; IndustriALL, 2026; IMF, 2022). Accordingly, the central question is not whether automation technologies will be adopted, but how their impact will be distributed. It was found in research that companies in the apparel industry regard automation as the tool for increasing efficiency, decreasing lead times, and achieving flexibility. However, the technical and economic barriers to implementing full automation suggest that automation is likely to remain partial and selective (International Labour Organisation, 2020). As a result, employment implications of automation may appear in terms of job composition, classification, work intensification and selective displacement rather than outright elimination of employment (International Labour Organisation, 2020; Fana et al., 2024).

The impact of automation is especially significant in Bangladesh where the ready-made garments industry is closely linked to foreign exchange revenues and large-scale employment of women (IMF, 2022; FSG et al., 2022; ILO Evaluation Office, 2020). Automation can provide productivity gains while at the same time putting pressure on workers in repetitive tasks and lower-skilled positions. The problem may become even more acute when workers have little opportunity for redeployment and compensation in periods of technological transition.

Labour governance considerations raise concerns about these issues even further. According to the reports of the ILO roadmap implementation in Bangladesh, there are still existing challenges concerning freedom of association, labour inspection, and anti-union discrimination, despite the achievements in the institutional development (IndustriALL, 2026). All these factors might reduce the capabilities of the labour institutions to negotiate training, redeployment, compensation, and representation for those workers who are affected by automation (BRAC University, ETI Bangladesh and GIZ, 2023; IndustriALL, 2026; IMF, 2022). Hence, the issue of automation has to be assessed in connection with the institutional context of cost adjustment.

In the case of India, the issue is different since the country’s textile industry comprises various production segments, different company types, and multiple labour relations. Critical analysis of digitalisation in the Indian textile industry shows that narratives of development through digital transformation may conceal inequalities resulting from labour market segmentation, informality, gender discrimination, and inequality in terms of access to the benefits of technological revolution (Kanupriya, 2021). Though digital upgrade of upstream production activities such as spinning, weaving, and processing might increase efficiency and improve the quality of products, their impact on workers will depend on how companies organise the labour processes and adjust costs for different groups of workers (Kanupriya, 2021; Ministry of Textiles, Government of India, 2025). Thus, the analysis reveals that the issue of automation has to be understood as a labour governance problem and not only a technological one. In addition, according to the documents, changes in technology, sourcing, production schedules, and buyer demands in one country can influence labour relations in the other country. The focus on workers’ transition in Bangladesh’s automation discourse can have some influence on the Indian suppliers of upstream products when their export buyers request faster delivery, higher traceability, and better product quality (ETI Bangladesh, 2024; Kabir et al., 2019). Thus, it is possible to say that the issue of labour adjustment can be regarded as a regional process and not only as domestic. It should be mentioned, however, that since the research is based on qualitative secondary analysis, the findings do not prove any causal relationships between automation and employment outcomes. They merely identify the way how the issue of automation and its risks and opportunities are represented in the documents.

5.1.3 Narrative three: Skills as both solution and boundary (institutional discourse perspective)

While the second narrative addresses the issue of how automation changes the division of labour and the costs involved, the current narrative considers whether skill systems allow workers to take advantage of the technological shift. This third narrative sees the development of skills as an essential component in the management of the process of digital transformation in the textiles and garments value chain. From the discourse on policy documents and international organisations, training institutions, and employers view technical education and training as an indispensable requirement for ensuring employability, increasing productivity, and allowing people to join technology-driven production processes (UNESCO, 2025; UNESCO, 2026; International Labour Organisation, 2020). The documents reviewed show that the skills required for digital transformation extend beyond basic digital literacy. These skills include machine operation, data analysis, equipment maintenance, quality control, production management, digital compliance, logistics coordination, and adaptive problem-solving (UNESCO, 2025; UNESCO, 2026). The needs differ in accordance with each country’s place in the regional value chain. For instance, the skills needs of India for its upstream textile activities may be different from those of Bangladesh for its downstream apparel industry (Kabir et al., 2019; Kanupriya, 2021).

According to the Indian literature, digitalisation provides scope for workers who have skills in technology and management. However, such opportunities do not seem to be universally available and may depend on the availability of training for workers in appropriate skills (Kanupriya, 2021; Ministry of Textiles, Government of India, 2025). Therefore, digital transformation increases the demands for specialised skills while the lower skilled have limited chances to move up. Skills development has also a restrictive dimension. Just because training is available does not mean that it is automatically inclusive. People may be barred from it due to location, education, employment, firm size, cost, and lack of certification programmes (UNESCO, 2025; UNESCO, 2026). In the cases where employers provide little training and where institutional mechanisms are weak, only a few workers may have better prospects while the others are threatened with marginalisation, overworking, and precarious employment (International Labour Organisation, 2020; Kanupriya, 2021).

Consequently, the development of skills should be regarded not only as a solution but also as a limit. It can contribute to upward mobility and technological transition when connected with access to education, recognition, employers’ commitment, and opportunities for redeployment. On the other hand, the excessive focus on individual employability can conceal structural inequalities due to the shift of the burden of adjustment from firms and institutions to individuals. Research on the experience of women working in garment production in Bangladesh confirms the need to link technological change with opportunities for accessible transition, rather than regard skills development as an isolated reaction to automation (FSG, HM Foundation and The Asia Foundation, 2022; BRAC University, ETI Bangladesh and GIZ, 2023). It implies the need for employers, training institutes, trade unions and governmental bodies to provide assistance in this process, involving technical and digital education along with consultations with workers, recognition, social protection, and redeployment opportunities. In this sense, the skills policy should be considered within the framework of labour governance and value chain upgrading rather than an individual or educational measure (UNESCO, 2025; UNESCO, 2026; International Labour Organisation, 2020).

5.1.4 Narrative four: Value-chain integration as interdependence and cross- border vulnerability (value chain upgrading perspective)

A notable finding is the tendency to analyse digital transformation in national terms, even though many of its implications are cross-national. The India-Bangladesh textile link proves that value chain integration allows the benefits and risks of the technological and industrial transformation to transcend national borders (ADB and IsDB Institute, 2023; Kabir et al., 2019; Gupta, 2015). An improvement in the quality and reliability of the intermediate textile inputs imported from India will contribute to the sourcing environment and exports competitiveness in Bangladesh. At the same time, Bangladesh’s reliance on imported intermediate inputs may result in creating structural vulnerabilities and restraining domestic upgrading in certain circumstances (ADB and IsDB Institute, 2023; Kabir et al., 2019; OEC, 2026). According to UN ESCAP (2022), regional value chains offer numerous possibilities for further economic integration in South Asia. From this point of view, digital transformation takes place not within national economies but through interconnected production systems. As a result, the technological upgrading, digital coordination, trade facilitation and enhanced logistics in one country may have an impact on the production capacity and competitiveness in the other country.

In its turn, the relationship between two countries works the other way around. Any increase in the competitiveness, changes in tariffs, or higher buyer demands for speed, transparency and traceability can affect the expectations regarding the sourcing of Indian upstream suppliers (Vajiram and Ravi, 2026; Mishra, 2026). The transformation of Bangladesh’s downstream apparel export system may consequently influence the planning process, quality, delivery schedule and technological investments in Indian textile producers. Thus, interdependence implies that a national policy framework is inappropriate in such a case. Digital transformation is pursued by one state for increasing its competitive advantages, whereas the results of such a strategy can travel through the value chain and impact the labour conditions of another country (Jiang et al., 2024; Kabir et al., 2019; Gupta, 2015). This finding represents one of the articles major contributions. In this context, it is not possible to govern labour relations in regional value chains only through domestic policy instruments or firm-level strategies. The interdependencies may result in what is referred to as “vulnerability transmission” where the risks and adjustments that arise become transmitted across interdependent production networks through trade, supply chains, and economic ties.

These four discourses, however, are non-exclusive of one another. Rather than acting separately, these discourses overlap and can even compete with each other within the region’s textile value chain. Competitive discourses and discussions of upgrading can coincide with fears of labour insecurity, institutional shortcomings, and uneven adjustment, with skills development often offered as a way to negotiate these contradictions. Digital transformation in this context is seen as a contested process, whereby governments, companies, labour, unions, and other parties involved give varying interpretations of the same technological progress. Collectively, these four narratives reflect the contested institutional nature of the digital transformation process in the India–Bangladesh textile value chain. While digital transformation is a technological process, it is also a process of reorganising work, distributing the costs of adjustment, and competing for competitiveness in interconnected production processes. Through the use of the four discourses of global value-chain governance, value-chain upgrading, labour governance, and institutional discourses, this study makes an original contribution to technological change representation in value chains in developing economies.

6 Discussion

Figure 4 illustrates the linkages of three processes - technological upgrading, value-chain interdependence and institutional mediation- that explain digital transformation in the textile industries of India and Bangladesh. This competitive narrative is supported by evidence of increasing pressure on firms around quality, lead time, traceability and resilience. (Ogunyemi et al., 2022; Global Textile Times, 2025). However, when competitiveness is treated as the sole outcome of digital transformation, this narrative may obscure the uneven distribution of adjustment costs among workers (ILO Geneva, 2026; Kalayci, 2025).

The comparative contribution of the article lies in showing that the relationship between India and Bangladesh is not symmetrical. In India, the stronger upstream position creates an opportunity for the development of a process modernisation and industrial capability narrative, whereas in Bangladesh, the dependence on labour for downstream exports makes it more visible (Lu, 2025). The literature analysed indicates that the textile and clothing value chain may link the two countries, suggesting that the governance of digital transformation in one country may influence the adjustment pressures experienced in the other. (Humphrey, 2004; Gereffi et al., 2005).

This leads to two broader implications for emerging market research. First, studies of automation in manufacturing should move beyond methodological nationalism, particularly in sectors organised through regional and global value chains (Humphrey, 2004; Feng et al., 2024). Second, labour outcomes cannot be inferred from technology adoption alone. They depend on institutional capacity, including labour law, inspection systems, worker representation, access to training, social protection and the coordination of industrial and trade policy (Yu et al., 2025; OECD, 2023). Conceptually, the article develops a narrative-based framework for analysing digital transformation in emerging-market value chains. The framework brings together four interconnected narratives: competitiveness and upgrading, uneven labour restructuring, skills as mediated inclusion and vulnerability transmission through interdependence. The analytical corpus supports this interpretive framework, but vulnerability transmission should not be understood as an empirically confirmed causal mechanism. Together, these narratives show that technological change in the textiles sector is not a uniform process but one that unfolds unevenly across countries, firms and groups of workers (IndustriALL, 2026; Wolszczak-Derlacz et al., 2025). Interdependence may generate cross-border vulnerability, with risk and adjustment pressures spreading across connected production systems through trade, sourcing relationships and institutional asymmetries. This interpretation is consistent with value-chain upgrading theory, which emphasises the uneven distribution of benefits and risks within interconnected production systems.

7 Practical and policy implications

The following recommendations are presented as research-informed policy considerations derived from the analytical corpus and should not be interpreted as empirically validated interventions. For managers, the findings suggest that digital transformation strategies should be evaluated not only in terms of productivity and quality outcomes but also in terms of their workforce consequences across linked supply systems. Companies that rely on regional sourcing relationships should recognise that resilience depends partly on the stability and adaptability of labour arrangements within their own facilities and across their supply networks (International Labour Organisation, 2020; Kabir et al., 2019). This creates a business rationale behind collaboration in supplier development, training and capability building (Kabir et al., 2019; Gupta, 2015). For policymakers in India, digital transformation in the upstream stages of the value chain should be considered in relation to downstream participants, including Bangladesh (Kabir et al., 2019; Das, 2017). Policies designed to improve quality, logistics and production capacity may generate benefits, but their developmental impact could be strengthened when complemented by trade facilitation policies that support regional value-chain integration (Kabir et al., 2019; UN ESCAP, 2022).

This study underlines, for Bangladeshi policymakers, the importance of integrating export competitiveness with workforce oriented transition planning. The digital transformation has to go beyond the adaptation of individual firms, since it is closely related to the garments sector’s contribution to job creation and exports in Bangladesh. The research implies that the labour market governance, availability of reskilling programs, labour inspection and social dialogue may foster inclusive transitions (IndustriALL, 2026; IMF, 2022; ILO Evaluation Office, 2020). The results show that the digitalisation of the textiles industry in South Asia is a challenge for governance in a connected production corridor and not the modernisation of individual countries. International organisations, buyers and aid agencies can help to develop interoperable standards, education systems and labour rights as complementary elements of value-chain redesigning instead of considering them unrelated to technological transformation (UNESCO, 2026; Kabir et al., 2019; IndustriALL, 2026).

8 Limitations

There are several limitations in this study that need to be mentioned. First of all, the study only uses publicly available secondary sources and does not provide any insights into workplace practices and experiences of workers, managers, and policymakers. Second, the study does not use any interview, survey, or fieldwork methods to confirm stakeholder views or compare public discourse with private decisions made in organisations. Third, the document corpus used for the analysis is prone to selection bias since it is dependent on availability, visibility, and accessibility of online materials in English as well as on search terms and inclusion criteria used by the researcher. Fourth, the study uses interpretative narrative analysis, which means that there is some subjectivity involved in the process of coding, themes construction, and stakeholder frames interpretation. Finally, due to its comparative and qualitative nature, this study cannot identify any cause-and-effect relationships between digital transformation and effects on workers but can only reveal recurrent patterns in this regard.

9 Conclusion

This research implies that digital transformation in the textile industry needs to be understood in the context of value chain integration rather than individual nation state analysis. The interconnected structure of production in the India-Bangladesh textile complex involves the upstream advantage of the former country and the downstream advantage of the latter as far as apparel production is concerned (Kabir et al., 2019; Gupta, 2015). Digital transformation in general is depicted in the sources as a precondition of competitiveness and upgrading, but the evidence based on labour proves that technological change is institutional and conflicting between different interest groups (International Labour Organisation, 2020; IndustriALL, 2026; IMF, 2022).

The unique contribution of this research lies in the illustration that the future of labour in the regional textile corridor will depend not only on adoption of Industry 4.0 technologies but also on integration of those technologies with the respective trade policies, training systems, labour institutions and cross-border production processes (UNESCO, 2026; Kabir et al., 2019; IndustriALL, 2026). Changes in technology and labour market may spread out beyond national boundaries and result in redistribution of risks within value chains depending on the differences in institutional settings and sourcing relationships (Kabir et al., 2019; OEC, 2026). Digital transformation in emerging markets is to be understood not only as an industrial governance issue, but also as a labour governance one. Therefore, the interrelatedness of the Indian and Bangladeshi textile industries provides an interesting perspective to look at Industry 4.0 not as an automation story in general but as a process of contestation and reorganisation of work and competition in the regional value chain (Kabir et al., 2019; Gupta, 2015; Ahmed and Carter, 2018).

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Supplementary material

The Supplementary material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/frsus.2026.1922659/full#supplementary-material

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Footnotes

Edited by: Vineet Tiwari, Indian Institute of Information Technology, Allahabad, India

Reviewed by: Kazi Rezwan Hossain, Ahsanullah University of Science and Technology, Bangladesh

Xue Fubing, Zhejiang Sci-Tech University, China