Textile industry in Bangladesh | Prospects, Problems, Present scenario

Textile industry in Bangladesh

The textile and garment industry provides a single source of growth in Bangladesh's fast-growing economy. The textile industry in Bangladesh is the main exports sources of foreign exchange earnings. Textiles, garments, and ready-made garments (RMG) exports accounted for 77% of Bangladesh's total exports in 2002. In 1972, the World Bank estimated Bangladesh's gross domestic product (GDP) at US$6.29 billion and increased to $368 billion by 2021, of which $46 billion came from exports, of which 82% were readymade garments. As of 2016, Bangladesh's position in garment manufacturing is second only to that of China. Bangladesh is the world's second-largest exporter of western fast fashion brands. 60% of Western brand export deals are with European buyers and about thirty percent with American buyers and ten percent with others. Only 5% of textile factories are owned by foreign investors, and most of the production is controlled by local investors. In the 2016-2017 financial year, the RMG industry generated US$28.14 billion, accounting for 80.7% of total export earnings and 12.36% of GDP; the industry also adopted green manufacturing practices.

Textile industry in Bangladesh's prospects

i. Significantly qualified workforces are available at lower labor charges. The proposed minimum wages include travel allowance, house rent, medical allowance, maternity benefits, festival bonus, and overtime benefits in Bangladesh Export Processing Zones (BEPZ) units. On the other hand, wages outside BEPZ are about 40% lower. Also are-

ii. The energy at a low price.

iii. Easily accessible infrastructure like sea roads, railroads, rivers, and air communication.

iv. Accessibility of fundamental infrastructure, which is about 3 decades old, was mainly established by the Korean, Taiwanese, and Hong Kong Chinese industrialists.

v. FDI is legally permitted.

vi. Moderately open Economy, particularly in the Export Promotion Zones.

vii. GSP under EBA (Everything but Arms) for Least Developed Country applicable (Duty-free to EU)

viii. Improved GSP advantages under Regional Cumulative.

ix. Looking forward to Duty-Free Excess to the US, talks are on and appear to be on a hopeful track.

x. Investment assured under Foreign Private Investment (Promotion and Protection) Act, 1980 which secures all foreign investments in Bangladesh.

xi. OPIC's (Overseas Private Investment Corporation, USA) insurance and finance agendas are operable.

xii. Bangladesh is a member of the Multilateral Investment Guarantee Agency (MIGA) under which protection and safety measures are available.

xiii. The adjudication service of the International Centre for the Settlement of Investment Dispute (ICSID) offered.

xiv. Excellent Telecommunications network of E-mail, Internet, Fax, ISD, NWD & Cellular services.

xv. Weakness of currency against the dollar and the condition will persist to help exporters.

xvi. Bank interest@ 7% for financing exports.

xvii. The convenience of duty-free custom bonded w/house.

xviii. Readiness of new units to enhance systems and create infrastructure accordantly with product growth and fast reactions to circumstances.

Problems of the textile industry in Bangladesh

i. Lack of marketing tactics

ii. The country is deficient in creativity

iii. Absence of easily on-hand middle management

iv. A small number of manufacturing methods

v. An international pressure group forces local producers and the government to implement social recognition. US GSP may be canceled and purchases from the US and EU could be significantly reduced.

vi. M/c advancement is necessary. The machinery required to assess add-on a garment or increase competence is missing in most industries.

vii. Lack of training organizations for industrial workers, supervisors, and managers.

viii. The autocratic approach of nearly all the investors

ix. Fewer process units for textiles and garments

x. Sluggish backward or forward blending procedure

xi. Incompetent ports, entry/exit complicated, and loading/unloading takes much time

xii. Speed money culture

xiii. Time-consuming custom clearance

xiv. Unreliable dependability regarding Delivery/QA/Product knowledge

xv. Communication gap created by incomplete knowledge of English.

xvi. Subject to natural calamities.

Women in the textile industry

With the rise of the textile industry in Bangladesh, the structure of gender participation in the economy has undergone a major change. The World Bank estimates the number of women workers in the industry in the 1980s was 50,000; That number was brought to 2.85 million by 2008 and is now probably above the 3 million mark. Traditionally, women's participation in the formal economy of Bangladesh has been minimal. Bangladesh's main export-oriented ready-made garment industry, but with 90 percent employment of women workers was built largely on the supply of cheap and flexible women workers in the country. By 2001, about 3 million workers were employed in the textile industry, 90% of whom were women. In 2004, the garment sector was the largest employer of women in Bangladesh. By 2013, there were about 5,000 garment factories, employing about 4 million people, mostly women.

The garments sector has provided employment opportunities to rural women who had never had the opportunity to be part of the formal workforce before. It has given women the opportunity to be financially independent and have a voice in the family because now they contribute financially. However, women workers face various problems. Most women come from low-income families. The low wages of women workers and their compliance have enabled the industry to compete with the world market. Women are paid much less than men due to a lack of education. However, the pressure of buyers to comply with the Labor Code has enabled the factories to maintain satisfactory working conditions.

Present scenario of the textile industry in Bangladesh

Today, developed countries are heavily dependent on developing countries for the manufacture of textiles and garments. At present, with a turnover of $20 billion, Bangladesh is the second-largest garment producer in the world, accounting for 80% of exports. There are three things that have increased the growth of the textiles industry in Bangladesh. The country has a lot of resources, opportunities, and beneficial government policies. A large number of workers can be found in Bangladesh. Also, the cost of natural gas and energy is cheap. With a large population, labor is plentiful, and Bangladesh has an advantage in producing labor-intensive products.

The main reason for the development of the textile industry in Bangladesh is the hard workforce. They put in more work time to complete the target. Therefore, the per capita income of the country and the standard of living of the people have improved in recent times. Second, the country has gained a favorable opportunity to trade with the US and European countries in the readymade garments sector.

These opportunities were supported by government policy that sustained textile growth in Bangladesh. Liberal government policies promoted investment from abroad. The garment industry of Bangladesh is famous and occupies a prominent place in the world market today. The country's textile industry includes specialized textile products, knitwear, and woven product. These products top the country in terms of export earnings.

Moreover, the quota-free textile rule introduced in 2005 has significantly improved the textile industry in Bangladesh. Government policies that support textiles include financial benefits and institutional assistance. As mentioned earlier, labor and energy are cheaper and more readily available here than in India, Pakistan, or China. This gives them a competitive advantage over their competitors.

The new textile policy that has been introduced has no tariffs for the spinning sector. However, imported yarns and materials have higher tax rates to encourage the use of local fabrics and yarn production. All these issues have worked together for the development of textiles in Bangladesh. Yet, in the last ten years, the country has witnessed the growth of the spinning industry.

Conclusion

Bangladesh has come a long way from today's agro-based economy to an export-import-dependent economy. Bangladesh has increased its overseas reserves from $ 270 million (1972) to $ 33000 million (2018) with the help of a nearly 40-year-old textile and garment industry. Even then, there are many opportunities for Bangladesh to grow to its full potential. But today's textile industry is more competitive than ever. Due to this Bangladesh will face some challenges. By solving these problems, Bangladesh can create a technology-based garment industry and be a leader in this sector as it is a country with a huge youth population. All things considered, we can say that Bangladesh has a bright future in the textile and garment industry.