Textile industry in Bangladesh

The textile industry in Bangladesh

The textile industry in Bangladesh, now the sixth largest exporter of apparel in the world after a decade of spectacular economic growth, has positioned itself to benefit from the current global economic crisis. Production of ready-made garments (RMG) and knitwear is at an all-time high. Many challenges remain, but the overall outlook for this nation's industry remains bright.
Few nations have gone through as much dramatic change over the past several decades as the Indian Ocean nation of Bangladesh. A rich and fertile agricultural land, Bangladesh (once a part of the state of Bengal in India) made its initial impact in the modern textile industry as the world's largest producer of jute ("the Golden Fiber of Bangladesh") with an 80% share of the market in 1947, before production in other nations and use of synthetic fibers eroded this hegemony. An impoverished and densely-populated nation, Bangladesh has made great strides in economic development since the late 1970s, and was included in Goldman Sach's 2005 list of the "next 11" growing economic nations behind Brazil, Russia, India, and China.

Ready-Made Garments in Bangladesh


The journey of the RMG industry started in early 1980s. Unique ideas like the bonded warehouse license and back-to-back letter of credit concepts propelled the industry forward. The hurdles of the Multi Fibre Arrangment (MFA) quotas in 1985 and the Harkin Bill in 1994 were great challenges for the industry, as were the phasing out of MFA quotas in 2004 and the European Union Generalized System of Preferences (GSP) scheme. Although there was concern that the MFA phase-out would shut down the industry, the Bangladesh textile sector actually grew tremendously after 2004 and reached an export turnover of US$10.7 billion in FY 2007.
Bangladesh's export trade is dominated by the RMG industry. The sector currently employs 2.5 million people-about 40% of total manufacturing (85% of these employees are women)-and accounts for 76% of the country's export earnings and 10% of its GDP.
Manufacturers have successfully maintained product quality, commitment to buyers, and social compliance, making Bangladesh a reliable apparel sourcing destination. Bangladesh's RMG industry does business with top buyers around the world including Wal-Mart, Tesco, Hennes & Mauritz, Marks & Spencer, GAP, Nike, JCPenney, Sears, Zara, and Carrefour.