RMG sector In Bangladesh

Topics: International trade, Industry, Dhaka Pages: 13 (2627 words) Published: October 19, 2014

Growth of RMG Sector in Bangladesh

Prepared by
Tasnia Tajin 12364046
Tasnim Khanam Alis 12364048
Course Name: Managerial Economics (Microeconomics)
Course ID: ECO 501

Submitted to
Dr. Sayera Younus

Date: 14. 12. 2012


1. Abstract
2. Introduction
3. History
4. An Overview of the Bangladesh Ready Made Garment Industry 5. Growth of RMG industry in Bangladesh
6. Reasons behind the Growth of RMG Industry in Bangladesh
7. Challenges faced by the RMG sector in Bangladesh
8. Market overview
9. Conclusion
10. Recommendations
11. References


The inception of ready-made garment (RMG) industry in Bangladesh goes back to the late 1970s and soon became a key player in the economy of Bangladesh. Ever since its rise, the industry has contributed to export earnings, foreign exchange earnings, employment creation, poverty alleviation and the empowerment of women in Bangladesh. The two main reasons behind the success of the industry can be attributed to the export-quota system and the availability of cheap labor in the country. Although the growth of the RMG sector has remained steady over the years, it is not without any challenges. In our paper we delve into the factors that have made RMG such a powerful economic sector in our country and the challenges faced by the industry and try to provide recommendations to overcome those hurdles from an economic perspective.

The RMG industry of Bangladesh has seen fast growth over the past three decades. Until the 1970s the jute industry reined the industrial sector of Bangladesh but the RMG industry progressively replaced the jute industry since the early 1980s. In the decade of the 1980s, Bangladesh’s exports doubled from US$0.9 billion to US$1.8 billion, which in the next decade increased to just over US$ 5 billion on its way to reach US$10 billion by the end of the fiscal year 2005-06 an went to increasing up till 2012 establishing the RMG sector as a huge economic developed segment of not only Bangladesh but worldwide.

This study focuses on the contributing factors that have lead to the development of this sector, and the problems faced by the sector.

The paper is structured as follows; the first section consists of introduction, history and an overview of the Bangladesh Ready Made Garments Industry. The second section consists of the growth of RMG sector in Bangladesh, the reasons behind its growth and the problems faced by it followed by conclusion and recommendation.


Maslin and Jamdani cloth of our country were used as the luxurious garments of the royal figures in Europe and other countries. In ancient Bangalis had a great deal of expertise with regards to weaving of textile products. In rural communities both men and women were apprenticed in weaving. These skills in sewing and weaving were passed down through generations and are now transferred in today’s modern knitwear factories. In the early 1980s, there were small-scale independent investments in the readymade garments (RMG) sector. Within a decade, the RMG industry in Bangladesh had flourished and by the early 1990s it had surfaced as a key employer. Under the vibrant leadership of the private sector together with policy support from the government, the export oriented RMG industry has shown a magnificent expansion during the last two and a half decades. The textile sector initially could not keep pace with the requirement of yarn and fabrics particularly by the woven RMG sector as the textile and clothing industry was controlled by a fairly small community of local entrepreneurs. However, the sector expanded and the country currently exports over US$11 billion in textiles and garments, with a projected target of US$24 billion dollars by 2020.

Three independent associations are responsible for the textile sector: the Bangladesh Textile Manufacturers Association (BTMA), which represents spinners, woven...

References: End of MFA Quotas: Key Issues and Strategic Options for Bangladesh Readymade Garment Industry, Bangladesh Development Series – paper no 2 The World Bank Office, Dhaka December 2005
Abdur Razzaue, Abu Eusuf Trade, Development and Poverty Linkage:A Case Study of Ready Made Garment Industry in Bangladesh, April 2007 http://www.cuts-citee.org

Ananya Raihan, Debapriya Bhattacharya, Mustafizur Rahman : Contribution of the RMG Sector to the
Bangladesh Economy, October 2002 http://cpd.org.bd
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