Textile industry in Bangladesh

The textile and clothing industries provide the single source of growth in Bangladesh’s rapidly developing economy. Exports of textiles and garments are the principal source of foreign exchange earnings. By 2002 exports of textiles, clothing, and ready-made garments (RMG) accounted for 77% of Bangladesh’s total merchandise exports. In 1972, the World Bank approximated the gross domestic product (GDP) of Bangladesh at US$6.29 billion, and it grew to $173.82 billion by 2014, with $31.2 billion of that generated by exports, 82% of which was ready-made garments.

As of 2016 Bangladesh held the 2nd place in producing garments just after China.Bangladesh is the world’s second-largest apparel exporter of western fast fashion brands. Sixty percent of the export contracts of western brands are with European buyers and about forty percent with American buyers.

Only 5% of textile factories are owned by foreign investors, with most of the production being controlled by local investors. In the financial year 2016-2017 the RMG industry generated US$28.14 billion, which was 80.7% of the total export earnings in exports and 12.36% of the GDP; the industry was also taking on green manufacturing practices.

Bangladesh’s textile industry has been part of the trade versus aid debate. The encouragement of the garment industry of Bangladesh as an open trade regime is argued to be a much more effective form of assistance than foreign aid.

Tools such as quotas through the WTO Agreement on Textiles and Clothing (ATC) and Everything but Arms (EBA) and the US 2009 Tariff Relief Assistance in the global clothing market have benefited entrepreneurs in Bangladesh’s ready-made garments (RMG) industry. In 2012 the textile industry accounted for 45% of all industrial employment in the country yet only contributed 5% of the Bangladesh’s total national income. After several building fires and collapses, resulting in the deaths of thousands of workers, the Bangladeshi textile industry and its buyers have faced criticism.

Many are concerned with possible worker safety violations and are working to have the government increase safety standards. The role of women is important in the debate as some argue that the textile industry has been an important means of economic security for women while others focus on the fact that women are disproportionately textile workers and thus are disproportionately victims of such accidents.

Measures have been taken to ensure better working conditions, but many still argue that more can be done. Despite the hurdles, riding the growth wave, Bangladesh apparel making sector could reach 60 percent value addition threshold relying on the strong backwardly linked yarn-fabric making factories directly from imported raw cotton, reaching a new height of exports worth of US$30.61 billion in the fiscal year 2018.