The textile industry is a major sector of the national economy of Bangladesh. Bangladesh’s textile industry is well known in the highly competitive apparel market of the world. Bangladesh’s textile industry specialises in textiles, knitwear and woven garments. These products are preferred to generate export earnings for it.
Bangladesh has overtaken India in exports over the last decade due to a 20% increase in the price of products due to Indian labour costs. Bangladesh joined the union in the 1980s due to the outbreak of civil war in Sri Lanka. Lower production costs and free trade agreements with Western buyers have benefited Bangladesh, which ranks third among global exporters.
1.1 Bangladesh’s position in apparel exports
1.1.1 Bangladesh is the third largest exporter of textiles and clothing in the world.
Its textile and apparel exports have grown at a CAGR of 9 per centand imports at a CAGR of 7 per cent over the last five years. Bangladesh’s export earnings for the July-February period of the current fiscal year (2021-22) increased by 30.46% to US$33.84 billion from US$25.86 billion in the same period of the previous fiscal year due to the outstanding performance of ready-made garment products.
According to data released by the Export Promotion Bureau (EPB) on March 2, Bangladesh’s export earnings rose by 34.54 percent year-on-year to US$4.29 billion in February 2022 from US$3.19 billion in the same month of 2021. The export revenue from garments reached US$27.49 billion, up 30.73% from US$21.03 billion in FY21.
1.1.2 Bangladesh imports the most cotton textiles, accounting for 55% of total clothing and textile imports.
Bangladesh imported the most cotton textiles, accounting for 55 per cent of total clothing and textile imports. Man-made textiles, other and apparel ranked second, third and fourth, accounting for 35.0%, 6.8% and 3.2% respectively. Bangladesh imported 94% of its textiles and clothing from the top ten suppliers, most of which came from China, accounting for 58% of its overall market. India and Pakistan followed with 19% and 6% of the market share respectively. Cotton textiles account for the majority of India’s textile and clothing exports to Bangladesh, accounting for 77%of all exports. Man-made textiles and garments came second and third, with 17% and 4% market shares respectively.
1.2 Bangladesh’s performance in apparel outsourcing
Bangladesh is the world’s largest exporter of apparel. Its garment exports have grown at a compound annual growth rate of 13% from US$4.8 billion in 2000 to US$33.8 billion in 2021 and are likely to expand at an even greater scale in the future. The rapid growth of Bangladesh’s garment exports will lead to an increase in demand for textile intermediate products such as fabrics and yarns. To bridge the gap between sup
ply and demand, Bangladesh now imports yarn and fabrics from China, India and other countries. Bangladesh has long been an important export market for man-made textiles and cotton garments.
1.3 Significant new investment is expected in the procurement of textiles and the textile industry in Bangladesh in the coming years.
Australia has reportedly expressed interest in developing a manufacturing centre in Bangladesh and buying back the goods produced there or exporting them to Europe and other countries. Australian companies would supply inputs such as wool, cotton, timber, meat, leather and grains to Bangladeshi industrialists who would produce the goods and re-export them to Australia or Europe. By placing greater emphasis on distribution channels, Bangladesh will become a self-sufficient textile and apparel centre within the next decade, which will reduce some of the export potential of China and India. So although Bangladesh is a major outsourcing market for apparel and textiles, it will be crucial for Indian companies whose main export market is Bangladesh to find other markets in the coming years.
1.4 Reasons behind the growth of the textile industry in Bangladesh
Bangladesh’s hard-working labour force is the main reason for the growth of the textile industry.Bangladeshi workers often work overtime to meet deadlines for delivery. As a result, Bangladesh’s per capita income and the living conditions of its people have improved in recent years.There are also three fundamental reasons for the growth of the textile industry in Bangladesh: abundant resources and beneficial government policies; cheap gas and energy; and the obvious advantage of creating an industry of labour-intensive products due to the large population. These prospects have been fostered by the government, whose liberal policies have also encouraged foreign investment.
