The impact of the ready-made garment sector on the economy of Bangladesh is undeniable. In FY23, it contributed 10.35% to the country’s GDP, reflecting its important role in economic growth. RMG’s export earnings for FY23 stood at $46,991 million, with a growth of 10.27% over the previous fiscal year and a contribution of 84.58% to the total earnings of export of the country.
Despite its impressive growth, the apparel sector has been facing various disruptions for several years, such as geopolitical tensions, price fluctuations and supply chain disruptions. The inherent and long-term challenges facing the sector have exacerbated the impact of external disruptions and raised concerns about the sector’s ability to adapt and thrive in the face of global challenges.
The sector continues to rely heavily on imported raw materials, making it even more vulnerable to external supply chain disruptions. Lack of product diversification also emerges as one of these critical inherent challenges. With its specialization in a limited range of clothing products, Bangladesh’s ability to trade effectively and compete internationally is limited. Although this constraint has been evident for over a decade, the need for diversification has become increasingly necessary in recent years.
In 2021, 43% of total global clothing trade was based on synthetic fibers (MMF). However, Bangladesh had only 22 percent of garments made from MMF in its export basket. To address this challenge, Bangladesh can forge strategic partnerships with countries with expertise in MMF production. These collaborations would not only strengthen Bangladesh’s capabilities in MMF-based products but also attract foreign direct investments. Diversifying into MMF-based products would expand Bangladesh’s product range, strengthen its bargaining position and boost global competitiveness.
Another driving factor changing the apparel landscape is automation, which goes beyond the production floor and streamlines packaging and logistics processes. Although it offers promising benefits, including increased efficiency, reduced costs and improved quality, the automation of routine and manual tasks raises concerns about potential job losses, particularly for low-income workers. qualified. In its Future Skills Study, a2i identified RMG as the sector most affected by Industry 4.0-led automation.
However, automation also creates opportunities for workers with technical skills to operate and maintain automated systems. Therefore, Bangladesh needs to make significant investments in education and skills development to enable its workforce to meet the demands of the growing garment sector and bridge the skills gap.
International buyers are increasingly demanding fashionable, sophisticated, high-value and high-quality clothing from Bangladesh. To meet these evolving demands, wearable product manufacturers must continually improve their capabilities in product design, product categories, product quality, productivity, services and compliance.
As stakeholders – consumers, investors and governments – put pressure on companies to meet targets on GHG emissions, chemical releases, water use, waste management standards, worker safety, decent wages and an inclusive workforce, sustainability has transcended simple differentiation to become an essential condition for business success.
The apparel sector finds itself at a crucial crossroads, facing a convergence of external disruptions and inherent challenges. A concerted effort to address the skills gap and ensure acceptable compliance with labor standards and infrastructure upgrades, combined with additional investments in research and innovation, will help propel the garment sector towards a future of sustainable growth and global leadership.
A multi-faceted strategy including cooperation between the private sector and the government can firmly establish Bangladesh as a leader in the ever-changing world of the garment sector.
The author is an economic analyst
