Readymade Garment Industry in Bangladesh. Overview of the Textile industry of Bangladesh. Textile sector consists of around 5,400 factories and holding 78.60% of total exports of Bangladesh. Bangladesh is the 2 nd largest garments exporter in Asia and 3 rd largest in the world.
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Overview of the Textile industry of Bangladesh • Textile sector consists of around 5,400 factories and holding 78.60% of total exports of Bangladesh. • Bangladesh is the 2nd largest garments exporter in Asia and 3rd largest in the world. • More than 25 million people directly and indirectly depending on this sector for their livelihood and the numbers are increasing everyday.
Historic Trend of BD’s RMG ExportValues in Billion USD 2011-12 Source: EPB
Top 10 markets of Bangladesh’s RMGShare of USD 19.10 billion exports in FY2011-2012 Source: EPB
Growth of RMG IndustryValues in thousand factories 2011-12 Source: BGMEA
Opportunities of RMG Sector Bangladesh is on the radar-screen of all European and US apparel buyers. This is especially true as Bangladesh’s RMG exports will strengthen the country’s position and are likely to grow – double by 2015 and nearly triple by 2020 McKinsey &Company, August 2011
Strengths: Bangladesh – An emerging tiger Bangladesh economic growth % Constant unbroken GDP growth between 5%-7% 70% of the population is under 40 years of age. Economically active population is 45 million, and every year around 2 million people is joining the labor force Export driven growth in Manufacturing spearheading industrialization Stable position in sovereign credit rating by Moody’s and S&P JP Morgan produced a report in April 2007 (‘From Ho Chi Minh Trail to Mexico’) where they included Bangladesh in their ‘Frontier Five’ Goldman Sachs included Bangladesh in its ‘Next 11’ after the BRIC nations (Brazil, Russia, India and China)
Advantage: Enhanced market access EU GSP: Rules of Origin has been relaxed from two-stage to one-stage procession from 1 January 2011. EU has reformed its GSP that will come in to effect from January 2014, whereby the number of beneficiary countries has been reduced from 176 to 89. This would enhance the effectiveness of the trade concession among the beneficiaries Japan GSP: Rules of Origin for knitwear has been revised from three-stage to two-stage from 1 April 2011. Woven garment enjoys one-stage rules of origin Switzerland GSP: Rules of Origin has been relaxed from two-stage to one-stage procession from 1 April 2011 Norway GSP: Rules of Origin has been relaxed from two-stage to one-stage procession from 1 May 2011 Canada GSP: Canada provides Zero duty access on 25% value addition requirement Australia & New Zealand GSP: Australia & New Zealand provides Zero duty access on 25% value addition requirement (subject to additional 25% sourcing from GSP beneficiary countries) China Duty Free: China provides Zero duty access for 98% items from Bangladesh under global initiative through WTO India: India provides Zero duty access to almost all the key RMG items under SAFTA. 46 RMG items were declared duty free on 6 September 2012 Malaysia & South Korea: Both these countries provide duty free access to a number of apparel items from Bangladesh Russia’s WTO Accession: Russia’s accession to WTO has sourced a hope to liberalize trade with this country
Remarkable progress in social compliance • Better Work program • Bangladesh is now in the process of engaging in this program, administered by ILO and IFC and supported by USDOL • The feasibility study has been carried out which found a reasonable likelihood of achieving a positive impact through such a program • Currently the program designing phase is going on which will be completed in September 2012 Bangladesh’s garment sector is free of child labor and forced labor according to USDOL Report (Sep, 2009) BGMEA is monitoring the working condition in member factories on continuous basis