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The textile industry in Bangladesh, now the sixth largest exporter of apparel in the world after a decade of spectacular economic growth, has positioned itself to benefit from the current global economic crisis. Production of ready-made garments (RMG) and knitwear is at an all-time high. Many challenges remain, but the overall outlook for this nation's industry remains bright.

Few nations have gone through as much dramatic change over the past several decades as the Indian Ocean nation of Bangladesh. A rich and fertile agricultural land, Bangladesh (once a part of the state of Bengal in India) made its initial impact in the modern textile industry as the world's largest producer of jute ("the Golden Fiber of Bangladesh") with an 80% share of the market in 1947, before production in other nations and use of synthetic fibers eroded this hegemony. An impoverished and densely-populated nation, Bangladesh has made great strides in economic development since the late 1970s, and was included in Goldman Sach's 2005 list of the "next 11" growing economic nations behind Brazil, Russia, India, and China.

Status of Textile Industry in Bangladesh

The textile industry is an important segment of Bangladesh's manufacturing industry, playing a critical role in its economic development. Textile exports (including apparel) accounted for 76% of the national export in FY 2007, an increase from 41% in FY 1989 and 66% in FY 1995.

Until the liberation of Bangladesh, the textile sector was primarily an import-substitution industry. It began exporting ready-made garments (RMG) including woven, knitted, and sweater garments in 1978, which grew spectacurlarly during the next two and a half decades-from US$3.5 million in 1981 to US$10.7 billion in FY 2007. Apparel exports grew, but initially, the RMG industry was not adequately supported by the growth up and down the domestic supply chain (e.g., spinning, weaving, knitting, fabric processing, and the accessories industries). Until FY 1994, Bangladesh's RMG industry was mostly dependent on imported fabrics-the Primary Textile Sector (PTS) was not producing the necessary fabrics and yarn. Since then, production has increased in all Bangladesh PTS sub-sectors.

Major Markets

Bangladesh was the sixth-largest exporter of apparel in the world after China, the EU, Hong Kong, Turkey, and India in 2006. That year, Bangladesh's share in world apparel exports was 2.8%.

The US was the largest single market with US$3.23 billion in exports, a 30% share in 2007. Today, the US remains the largest market for Bangladesh's woven garments taking US$2.42 billion, a 47% share of Bangladesh's total woven exports. The European Union remains the largest regional destination-Bangladesh exported US$5.36 billion in apparel; 50% of their total apparel exports. The EU took a 61% share of Bangladeshi knitwear with US$3.36 billion exports.