The Readymade Garments (RMG) Industry in Bangladesh is a leading sector in the country’s economy. It significantly contributes to Bangladesh’s GDP and employment.
The RMG sector has transformed the economic landscape of Bangladesh, making it a global hub for garment manufacturing. This industry not only plays a pivotal role in the nation’s economic development but also in the empowerment of millions, especially women.
The Readymade Garments Industry in Bangladesh
The readymade garments industry in Bangladesh is the driving force behind Bangladesh’s growth. The “Made in Bangladesh” tag has also earned the country’s reputation as a brand in the world. Bangladesh’s garments industry has become one of the world’s leading industries, playing an important role in Bangladesh’s economy and global fashion industry. The Bangladesh readymade garments industry is the country’s largest export earner, reaching $34.2 billion in 2018-19 (July 2018-June 2019) and accounting for 84% of Bangladesh’s total export earnings.
A Brief History of the Readymade Garments Industry in Bangladesh
After the independence of Bangladesh in 1971, the country was among the most poor in the world, and no major industries were established in the country. Still, the jute industry in Bangladesh is one of the oldest and most traditional industries in the country. That time, also called the “jute industry,” is golden fiber. However, the jute industry started to lose its golden days, and the RMG sector replaced it and outgrew it.
Bangladesh has become the second largest apparel exporter in the world after China. There are almost 5000 Readymade garments industries in Bangladesh. Bangladesh’s readymade garments industry is now the country’s largest industrial sector, and there are nearly 4.1 million workers in this RMG industry. Bangladesh’s export revenue now stands at USD 27.9 billion for the year 2019-20
Bangladesh’s apparel industry started its journey in the 1980s and has since grown to where it is today. Nurool Quader Khan is known as the founder of Bangladesh’s readymade garments industry. He had an idea of how to change Bangladesh. In 1978, he sent 130 apprentices to South Korea to learn how to make readymade garments. With these trainees, he established the first factory, “Desh Garments,” to manufacture apparel for export.
Growth Factor
There are several reasons behind the massive growth of the garment industry in Bangladesh. One of the most important is the country’s highly competitive labor market. Bangladesh has one of the lowest labor costs in the world and a large number of skilled workers in the country. In addition, the vertical integration of the industry, which includes everything from yarn manufacturing to finished products, has improved productivity and lowered manufacturing costs.
Key Strengths
This has been successful due to the following factors:
- Cost-Competitiveness
- Skilled Workforce
- Geographical Advantage
- Government Support
- Vertical Integration
Cost-competitiveness: Labor costs in Bangladesh are much lower than in many other garment-producing countries, which makes Bangladesh an ideal location for international apparel brands that want to reduce their production costs.
Skilled Workforce: The RMG industry benefits from a large number of low-skilled but easily trainable workers, which has been one of the key factors in the growth of the sector.
Geographical Advantage: Bangladesh’s strategic position makes it easily accessible to major European, North American, and Asian markets, making supply chain management easier and transportation more cost-effective.
Government Support: The government of Bangladesh has implemented various policies and incentives to promote the RMG sector, including tax breaks, export incentives, and investment-friendly regulations, which have helped attract foreign investment and drive the growth of the industry.
Vertical Integration: Most garment factories in Bangladesh are vertically integrated, which means they spin yarn and then produce finished garments. This process increases productivity and reduces production costs.
Challenges and Concerns
Bangladesh’s RMG industry faces several challenges Despite its remarkable growth:
- Labor Rights and Safety
- Environmental Impact
- Global Competition
Labor Rights and Safety: The industry has been marred by incidents of poor working conditions, labour rights violations, and workplace safety issues, highlighted by tragedies like the Rana Plaza collapse in 2013, which claimed over 1,100 lives. Efforts to improve safety standards and labor rights have been ongoing but require sustained commitment from all stakeholders.
Environmental Impact: Industrialization has hurt the environment. There are worries about water pollution, chemical use, and waste management in garment factories. Sustainable methods and eco-friendly practices are essential to reduce these effects.
Global Competition: Bangladesh also faces strong competition from other garment-exporting countries such as Vietnam, Cambodia, and India. In addition, rising wages, geopolitical tensions, and changing trade dynamics are some factors hindering Bangladesh’s ability to maintain its current level of competitiveness.
Government Policies And Incentives
The Readymade Garments Industry in Bangladesh thrives under supportive Government Policies and Incentives. These policies help the industry grow and reach international markets. Let’s dive into how the government backs this sector.
Subsidies And Export Promotion
The government offers several subsidies to bolster the garments sector. These financial aids make production cost-effective. Export promotion is a top priority. The aim is to enhance the sector’s global competitiveness.
- Cash Incentives: Manufacturers receive cash benefits for exporting.
- Tax Exemptions: Exporters enjoy reduced taxes to increase profitability.
- Access to Finance: Easy loans are available for expanding businesses.
Industrial Policies And Infrastructure Development
The government’s industrial policies focus on creating a supportive environment. Infrastructure development is crucial for this sector’s success. Here’s how the government is paving the way:
- Building Dedicated Industrial Zones: These zones offer modern facilities.
- Improving Transportation: To ensure smooth delivery of goods.
- Enhancing Utility Services: Reliable power and water supply are ensured.
These efforts aim to make Bangladesh a top choice for garment manufacturing. The government’s commitment is clear. It’s creating a business-friendly ecosystem. This ensures the readymade garments industry continues to flourish.
Future of the Readymade Garments Industry in Bangladesh
Despite the challenges, the future of Bangladesh’s RMG industry appears promising. Key strategies for sustainable growth include:
- Investment in Technology
- Sustainability Initiatives
- Skill Development
- Diversification
Investment in Technology: Automation, digitization, and technological innovation can increase efficiency, enhance quality, and reduce dependency on manual labor.
Sustainability Initiatives: From sourcing raw materials to manufacturing and distribution, sustainable operations can help strengthen the industry’s strength and reputation.
Skill Development: Investing in workforce education and skills training will give workers the tools to succeed and create a skilled workforce to keep up with changing market trends.
Diversification: Exploring new markets, product categories, and value-added services can help diversify revenue streams and reduce reliance on traditional markets.
Conclusion
The readymade garments industry in Bangladesh has undergone a remarkable journey of growth and transformation. Some issues still need to be sorted out, but with proper steps and plans in place, the readymade garments industry in Bangladesh can continue to grow in the global fashion market. The industry has faced many challenges, but it has continued to grow and contribute to the development of Bangladesh’s economy.
Also Read: The Future Of Industrial Engineering In Garments Industry
FAQs (Frequently Asked Questions)
What is the ready-made garment (RMG) industry in Bangladesh?
The ready-made garment industry in Bangladesh refers to the manufacturing and export of clothing items such as shirts, trousers, jackets, and other apparel that are produced in factories within Bangladesh.
How important is the RMG industry to Bangladesh’s economy?
The RMG industry is crucial to Bangladesh’s economy, as it is the largest export-oriented sector and a significant source of employment for millions of people, particularly women, in both urban and rural areas.
What are the major export destinations for Bangladeshi RMG products?
The major export destinations for Bangladeshi RMG products include the United States, the European Union countries, Canada, and various other countries in Asia and Africa.
