The textile and apparel industry in Bangladesh occupies a prominent position within the country’s industrial structure.

It is the largest manufacturing sector, providing jobs for some 50% of the total industrial workforce and contributing 9.5% of the country’s GDP.

Also, it accounts for almost 77% of total exports, making it Bangladesh’s leading foreign exchange earner.

In the early 1980s exports were dominated by jute while garment sales were insignificant. But today garment exports are by far the leading export category. In 2001/02 the clothing sector generated as much as US $4.58 bn in foreign exchange.

The industry benefits from special access to markets in the EU, Canada, Norway and Japan. Because Bangladesh is a less developed country, its textile and clothing exports enter these countries quota-free and duty-free. This concession, together with low labor costs, provides the garment sector with a strong competitive advantage.

But in order to produce garments for export, the sector has to purchase a large share of its yarn and fabric needs from abroad, especially woven fabrics. Few local textile firms are able to produce materials of the required quality or in adequate quantities.

The Bangladeshi government is attempting to remedy this situation. To reduce the country’s import bill, it is offering tax concessions and incentives aimed at encouraging investors to develop the necessary backward linkages.

Source: http://www.researchandmarkets.com/reports/38728/38728.htm