Reveal The Reasons Behind The Rapid Growth Of Bangladesh'S Textile Industry

Textile industry is the main sector of Bangladesh national economy. Bangladesh's textile industry enjoys a high reputation in the world's competitive clothing market. Bangladesh's textile industry focuses on textiles, knitwear and woven garments. These products are the first choice to obtain export income for them.

Over the past decade, Bangladesh has surpassed India in terms of exports due to a 20% rise in product prices due to India's labor costs. Due to the outbreak of civil war in Sri Lanka, Bangladesh joined the alliance in the 1980s. Lower production costs and free trade agreements with Western buyers are good for Bangladesh, which ranks third among the world's exporters.

　　01. Bangladesh's position in garment export

Bangladesh is the world's third largest exporter of textiles and clothing.

In the past five years, its textile and clothing exports have grown at a compound annual growth rate of 9%, and its imports have grown at a compound annual growth rate of 7%. Due to the excellent performance of garment products, Bangladesh's export revenue increased by 30.46% to US $33.84 billion in the July February period of the current financial year (2021-22) from US $25.86 billion in the same period of the previous financial year.

According to the data released on March 2 by the Export Promotion Bureau, Bangladesh's export revenue increased by 34.54% in February 2022 from $3.19 billion in the same month in 2021 to $4.29 billion. Among them, the export revenue of ready-made clothes reached 27.49 billion US dollars, 30.73% higher than 21.03 billion US dollars in fiscal year 21.

Bangladesh imports the most cotton textiles, accounting for 55% of the total imports of clothing and textiles.

Bangladesh imports the most cotton textiles, accounting for 55% of the total imports of clothing and textiles. Man made textiles, others and clothing ranked second, third and fourth, accounting for 35.0%, 6.8% and 3.2% respectively. Bangladesh imports 94% of its textiles and clothing from the top 10 suppliers, most of which come from China, accounting for 58% of its total market. India and Pakistan followed, with 19% and 6% 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 clothing ranked second and third with 17% and 4% market share respectively.

　　02. Bangladesh's performance in garment outsourcing

Bangladesh is the world's largest exporter of clothing. Its clothing export increased at a compound annual growth rate of 13%, from 4.8 billion US dollars in 2000 to 33.8 billion US dollars in 2021, which may expand in a larger scale in the future. The rapid growth of clothing exports in Bangladesh will lead to an increase in demand for textile intermediate products such as fabrics and yarns. To fill the supply and demand gap, Bangladesh now imports yarns and fabrics from China, India and other countries. Bangladesh has long been an important export market for man-made textiles and cotton garments.

It is expected that there will be a lot of new investment in purchasing textile and textile industry in Bangladesh in the next few years.

Australia is reported to be interested in developing a manufacturing centre in Bangladesh and to buy back goods produced there or export them to Europe and other countries. Australian companies will provide inputs such as wool, cotton, timber, meat, leather and grains to Bangladeshi industrialists, who will produce goods for re export to Australia or Europe. By paying more attention to distribution channels, Bangladesh will become a self-sufficient textile and clothing center in the next decade, which will reduce some of the export potential of China and India. Therefore, while Bangladesh is a major outsourcing market for clothing and textiles, it will be crucial for Indian companies whose main export market is Bangladesh to look for other markets in the next few years.

　　03. Reasons behind the growth of Bangladesh textile industry

Bangladesh's industrious labor force is the main reason for the growth of textile industry.

In order to meet the delivery deadline, Bangladeshi workers often work overtime. As a result, Bangladesh's per capita income and people's living conditions have improved in recent years.

In addition, there are three basic reasons for the growth of Bangladesh's textile industry: abundant resources and beneficial government policies; Cheap natural gas and energy; And because of the large population, the advantages of creating labor-intensive products are obvious. These prospects have been fostered by the government, whose liberal policies have encouraged foreign investment.