Historical Development of Garments Industry in Bangladesh

Historical Development of Garments Industry in Bangladesh

The World Bank estimated Bangladesh’s GDP in 1972 to be US$6.29 billion, and it is expected to rise to $353 billion by 2021, with $46 billion coming from exports, 82 percent of which were readymade clothing. As of 2016, Bangladesh was only second to China in terms of apparel manufacture.

Bangladesh is the world’s second-largest supplier of American fast fashion companies. The textile and garment sector is a major source of growth in Bangladesh’s rapidly developing economy. Textile and garment exports are the principal source of foreign currency revenues. By 2002, textile, apparel, and readymade garments (RMG) exports accounted for 77 percent of Bangladesh’s total export value.

History of Garments Industry in Bangladesh

The garment industry in Bangladesh began in the 1980s and has subsequently advanced to its current position. Nurool Quader Khan, Bangladesh’s late creator of the readymade garment business, was a trailblazer. He saw a way for the country to be altered. In 1978, he sent 130 trainees to South Korea to learn how to create ready-to-wear garments.

Using those trainees, he founded the first factory, “Desh Clothes,” to produce garments for export. At the same time, the late Akhter Mohammad Musa of Bond Garments, the late Mohammad Reazuddin of Reaz Garments, MdHumayun of Paris Garments, Engineer Mohammad Fazlul Azim of Azim Group, Major (Retd) Abdul Mannan of Sunman Group, M Shamsur Rahman of Stylecraft Limited, the first President of BGMEA, AM Subid Ali of Aristocrat Limited also came forward and established some of the first garment factories in Bangladesh.

Other careful and industrious entrepreneurs followed in their footsteps and opened RMG facilities all around the country. Since then, Bangladesh’s garment industry has had no need to look back. Despite a number of setbacks in recent years, the industry has managed to carve out a position in the global market and maintain a robust performance.

Various sources of impetus have aided the industry’s development and maturity at various times since its beginning. We initially learned about child labor in 1994, and we were able to eradicate it from the business in 1995.

The MFA-quota was a benefit to our industry, allowing it to expand, mature, and thrive. When the quota was set to expire in 2004, many people predicted that the phase-out would cause substantial disruptions in our exports.

On the other hand, the post-MFA era is a success story. By proving all of the forecasts wrong, we were able to overcome the post-MFA problems. With exports worth more than $27.9 billion in the 2019-20 fiscal year, Bangladesh’s garment sector is now the country’s top export earner.

Contribution of the Garments Sector in Bangladesh Recently

The RMG industry makes a substantial contribution to the Bangladesh economy. The RMG sector has grown at a rapid pace during the previous decade. The RMG industry accounts for around 76 percent of Bangladesh’s overall export profits.

Statistically, Bangladesh’s RMG sector earned US$ 5,686.06 million in FY 2003-04; in FY 2004-05, the value was US$ 6,417.67.67 million, in FY 2005-06, the value was US$ 7900.80 million, in FY 2006-07, the value was US$ 9,211.23 million, in FY 2007-08, the value was US$ 10,699.80 million, in FY 2008-09, the value was US$ 12.35 billion, and finally in FY

These are the crucial success criteria in Bangladesh’s RMG sector:

  1. a large worker force,
  2. Human resources who are qualified and skilled
  3. Technological advancements,
  4. Government assistance for textiles and clothes
  5. Zones of special economic and export processing,
  6. Establishment of textile and clothing settlements
  7. The motivation to use local inputs,
  8. Duty exemption for the importation of inputs/machines
  9. Reduced income tax,
  10. And foreign assistance such as GSP, GSP+, duty-free access, and so on.

Strategy is everything in business. When we consider the essential components strategically, the following points spring to mind:

  1. Cost-Effective Strategy,
  2. New Product Development Strategy,
  3. Product Diversification Strategy, and
  4. Market Diversification Strategy are all examples of strategies.

How the Garments Industry is Progressing

According to a recent article in the Dhaka Tribune, Vietnam has surpassed Bangladesh in the global clothing industry, becoming the world’s second-largest exporter of readymade garments (RMG). China is the first. Bangladesh RMG is now ranked third in the international market.

Bangladesh’s worldwide market share in garment exports was 6.8% in 2019, up from 6.4 percent the previous year, according to the World Trade Statistical Review 2020. Bangladesh will export $28 billion in clothes in 2020, accounting for 6.3 percent of the global market, while Vietnam will export roughly $29 billion.

Due to the Covid-19 epidemic, both Bangladesh and Vietnam profited less from garment exports in 2020 than the previous year, although the magnitude of the drop differed. Bangladesh’s revenues fell by 15% in 2020, according to the World Trade Organization (WTO), while Vietnam’s fell by 7%.

The BGMEA specialists believe that the growth rate has slowed as a result of Bangladesh’s shutdown last year, although Vietnam’s industries did not cease production or export for a single day.

With hurdles on one side, the Bangladesh ready-made garment business has a better future ahead of it; at least, that is what statistics and data have led us to believe. We are more optimistic about the prospects of our RMG business as a result of a recent research conducted jointly by the United States Fashion Industry Association (USFIA) and the University of Rhode Island (URI).

Better labor standards and safety conditions put in place following the employees’ deaths played a significant effect. With these enhancements, Bangladesh has become an appealing alternative for multinational apparel firms, particularly those trying to diversify production locales and, more lately, those concerned about how global trade disputes may influence their bottom line.

With hurdles on one side, the Bangladesh ready-made garment business has a better future ahead of it; at least, that is what statistics and data have led us to believe. We are more optimistic about the prospects of our RMG business as a result of a recent research conducted jointly by the United States Fashion Industry Association (USFIA) and the University of Rhode Island (URI).