The ready-made-garment industry is growing tremendously over the years. As of now, China rules the industry. Following China’s lead in Bangladesh as one of the leading RMG industries in the world.
Since the 1990s this industry has been the main source of Bangladesh’s foreign earnings. In 2019–2020, more than 84% of the country’s total export earnings came from garment exports. While many believe that it is a good sign since the country’s economy is growing because of the industry which became the primary source of foreign income, it also raised an alarm as the country became hugely dependent on the RMG industry.
As per Springer Link, the continued growth in the apparel industry has helped Bangladesh to maintain steady economic growth.
The major reason the country is considered a global apparel sourcing hub is due to the salary structure of the Bangladeshi apparel industry. The current monthly minimum wage in Bangladesh is USD 97 whereas in China it ranges from USD 162 to USD 358.
Bangladesh is on the way to becoming the next sourcing destination and replacing China due to its large labor force, low wages, and modern manufacturing facilities.
Many experts believe that it is the vast labor force, low wages, suitable locations, and export-friendly policies that give a competitive advantage to Bangladesh when it comes to the RMG industry.
Another reason can also be the size of the RMG manufacturing units which provides a competitive advantage for the country. Large manufacturing firms have more capital and human resources and are risk-takers.
In 2020, Bangladesh contributed 6.4% toward the global RMG market share which is higher than its competing countries like Vietnam (6.2%), India (3.3%), and Turkey (3.1%).
While the country was stricken hard during the pandemic like the rest of the world, it seems to be picking up the pace gradually to get back in the race and even win it.
