The textile industry has played an important role in Bangladeshs economy for a l

ong
time. Currently, the textile industry in Bangladesh accounts for 45 percent of a
ll industrial employment and contributes 13 percent to the national GDP. The ind
ustry employs nearly 5 million people (skilled and semi skilled), of which 80% a
re women.
A huge 81 percent of the countrys export earnings come from textiles and apparel,
according to the latest figures available. Bangladesh exports its apparel produc
ts worth nearly $5 billion per year to the United States, European Union (EU), C
anada and other countries of the world. It is the sixth largest apparel supplier
to the United States and EU countries. Major products exported from Bangladesh
include polyester filament fabrics, man-made filament mixed fabrics, PV fabrics,
viscose filament fabrics and man-made spun yarns. Major garments exported inclu
de knitted and woven shirts and blouses, trousers, skirts, shorts, jackets, swea
ters and sportswear, among other fashion apparel.
A Picture of Bangladeshs Textile Industry

Bangladeshs textile industry can be divided into three main categories: public se
ctor;
handloom sector; and the organized private sector. The private sector is the fas
test growing sector in the country while the others are still fighting with each
other. The handloom industry provides employment for a large segment of the pop
ulation of Bangladesh and supplies a large portion of the fabric required by the
local market. About 20 percent of existing mills in Bangladesh are large-scale
mills, roughly 30 percent are medium-scale mills, and the remaining 50 percent a
re small-scale mills and the number of spinning mills in the country is increasi
ng day-by-
day to contribute to the countrys
economy. The textile quotas under the Multi-Fiber Arrangement of January 2005 ha
ve been moderate in Bangladesh and the industry is divided on their impact. Whil
e industry
analysts say Bangladeshs garment and textile manufacturers will have to face stee
p
competition from countries such as India, Pakistan, China and Thailand as a resu
lt of new policies, the textile companies see no impact on their business. Combi
ned, the textile and apparel sectors consist of 3,600 firms. There is a concentr
ation of manufacturing activity in and around the capital city of Dhaka and a gr
owing garment manufacturing presence in the count
rys export processing zones.
Bangladesh Textile Mills Association Secretary General said that because textile
s and ready-made garments are the two largest export sectors and employers in Ba
ngladesh, government support will continue and there are no restrictions on repa
triation of profits and investment or tax-free imports of machinery and raw mate
rials for export. The government also is liberal toward work permits and receive
s huge response regarding this. According to the Bangladesh Garment Manufacturer
s and Exporters Association (BGMEA), the total fabric requirement in the captive
market is about 3 billion yards, of which roughly 85 to 90 percent is imported
from countries such as China, India, Hong Kong, Singapore, Thailand, Korea, Indo
nesia and Taiwan. Fabric demand is increasing at the rate of 20 percent per year
and also expects to increase in the foreseeable future. Although the industry i
s one of the largest in Bangladesh and is still expanding, it faces serious prob
lems, principally because the country does not produce enough of the raw materia
ls necessary for the industry to expand. The primary materials used in the spinn
ing sector are raw cotton and man-made fibers such as viscose and polyester stap
le fibers. Unfortunately, none of these raw materials are produced in Bangladesh
. Most spinning mills in Bangladesh produce low-grade yarn. Available figures sh
ow that current yarn production satisfied only 22-percent of the total yarn dema
nd. In spite of this drawback, as many as 116 new spinning mills, each having th
e capacity of 25,000

spindles, will be established in the near future due to the increasing demand in
the local market. The weaving sector also is plagued by a lack of organization
and coordination. The existing weaving capacity in Bangladesh can meet only abou
t 40 percent of fabric demand; the rest is imported. However, the increasing tre
nd of expansion in the weaving sector is clear from the fact that 223 modern wea
ving plants, each with an annual capacity of 10 million meters, will be set up i
n the near future. The knitting and hosiery sectors look brighter than weaving,
and about 80 percent of garment accessories like cartons, threads, buttons, labe
ls, poly bags, gum tapes, shirt boards and neck boards now are being produced wi
thin Bangladesh and contribute to the national gross domestic product. However,
the textile industry is just budding. The Bangladesh government offers great inc
entives for encouraging the use of local fabrics in the export-oriented garment
industries. To encourage textile export, companies can import capital machinery
duty-free. Cotton also may be imported duty-free. Moreover, the government recen
tly has implemented several policy reforms to create a more open/transparent and
competitive climate for foreign investment. Rising garment export trends from B
angladesh, along with some benefits provided by the government, have created con
cerns for Pakistan's government. Textile tycoons in Karachi are thinking about s
hifting their business to Bangladesh.