Bangladesh Textile Industry - History of Textile Production in Bangladesh

History of Textile Production in Bangladesh

Immediately after the founding of Bangladesh, tea and jute were the most export-oriented sectors. But with the constant threat of flooding, declining jute fiber prices and a significant decrease in world demand, the contribution of the jute sector to the country’s economy has deteriorated. The garment industry in Bangladesh became the main export sector and a major source of foreign exchange starting in 1980, and exported about $5 billion USD in 2002.

The industry employs about 3 million workers of whom 90% are women. Two non-market factors have played a crucial role in ensuring the garment sector’s continual success namely (a) quotas under Multi- Fibre Arrangement1 (MFA) in the North American market and (b) preferential market access to European markets.

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.