Garment Industries of Bangladesh

Topics: Textile manufacturing, Textile, Textile industry Pages: 8 (2369 words) Published: May 16, 2013

1. In the field of industrialization, role of ready-made garments (RMG) industry is found very prominent in both developed and developing countries. Economic history of Britain reveals that in the 18th Century the cotton mills of Lancashire in Britain ushered in the first industrial revolution of the world. Moreover, during the last 200 years or more many countries of the world have used RMG industry as an engine for growth and a basis for attaining economic development. Over the past few years garment industry is found to have played such an important role in the process of industrialization and economic growth. The growth of garment industry in Bangladesh is a comparatively recent one. RMG business started in the late 70s as a negligible non-traditional sector with a narrow export base and by the year 1983 it emerged as a promising export earning sector. 2. Presently the RMG sector is the life-blood of Bangladesh economy achieving higher export growth every year. The sector is now the largest contributor not only to overseas trade but also to the national economy. Bangladesh textiles and RMG industry comprises 155,557 units - 148,000 handlooms units, 3,284 mechanized primary textile units, 5150 export-oriented readymade garments manufacturing units and 273 garments washing-dyeing units. The sector is a major foreign exchange earner for Bangladesh contributing 77 per cent to the country's net exports. At the end of the fiscal year 2011, total export of Bangladesh garments was worth US$ 23 billion, a 43 per cent increase over the previous year, accounting for almost 25 per cent of the GDP (gross domestic product). The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Bangladesh. Although the industry is one of the largest in Bangladesh and is still expanding, it faces massive challenges, principally because the country does not produce enough of the raw materials necessary, unfavorable trade policies, and inadequate incentives for expansion. However, the potentials in the RMG can be realized only if the challenges in some areas like – infrastructures, compliances, workforces supply, suppliers’ performances, raw materials, political stability are tackled. 3. After giving a bird’s eye view on the RMG sector of Bangladesh, this paper would try to analysis the impact of RMG on the economy of Bangladesh. Then the paper would contemplate critically on the problems faced by RMG sector and solutions.


4. The aim of this paper is to discuss about the ready-made garments (RMG) industry in Bangladesh, problems faced by this sector and plausible options to overcome.

An Overview of Ready-Made Garments in Bangladesh

5.The Rise of Ready-Made Garments in Bangladesh. The growth of garment industry in Bangladesh is a comparatively recent one. In the British period there was no garment industry in this part of the Indo-Pak-Sub Continent. In 1960 the first garment industry in Bangladesh (Then East Pakistan) was established at Dhaka. From 1976 and 1977 some entrepreneurs came forward to setup 100% export oriented garment industry. Both domestic and international environment favored the rapid growth of this industry in Bangladesh. Some important phases of the Bangladesh RMG industry:

Period| Event|
1977-1980| Early period of growth|
1982-1985| Boom days|
1985| Imposition of quota restrictions|
1990| Knitwear sector developed significantly|
1995-96| Child labor issue and its solution|
2003| Withdrawal of Canadian quota restriction|
2005| Phase-out of export-quota system|

Currently, there are more than 4,000 RMG firms in Bangladesh. More than 95 percent of those firms are locally owned with the exception of a few foreign firms located in...
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