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√ Export earnings: US$ 2051.30 million up to March 2004-05 (2nd largest sector)
√ Share of Export earnings: 38.12%
√ Net Retention Amount: US$ 1230.78 million
√ Net retention rate: 60%
√ Value addition: 75%
√ Share in net export: 32% (Highest)
√ Quantity exported: 87.40 million dozen (Top sector)
√ Labor force employed:
• Direct: 0.70 million; about 70% of them are women.
• Indirect: 0.40 million
The RMG business started in Bangladesh in the 70s but it was then merely a casual effort. The first
consignment of knitwear export was made in 1973 and the first consignment of woven garments was
made in 1977. Though started later, but it was the woven sector that first dint a spot in the
The entrepreneurs of the knit sector stepped forward with their expertise in the late 80's. With their
earnest efforts they were able to export US$ 14.84 million in 1989-90. Out of this US$ 12.22 million
was exported to EU and US$ 2.02 million was exported to US. The trend continued in the knit sector
because of the market access opportunity provided to the LDCs under the Generalised Systems of
Preference (GSP) benefit.
This is the rejuvenated beginning of the epic story of Bangladeshi knitwear sector RMG sector that in
true sense has been able to massive industrialization in a sustainable way with effect on all probable
human development aspects which is the encouraging part of the story.
The growth of knitwear sector is increasing at an increasing rate. The cumulative average growth rate
of the sector is 27%. And it is continuously grabbing a more portion in the export pie of Bangladesh.
This is mainly attributed to the facilities provided under the EC GSP and ROO. The knitwear sector is
heavily driven by these favorable policies and took the opportunity to develop a strong backward
linkage for the sector.
EU is the main export region of Bangladeshi Knitwear constituting 83% (US$ 1780.57 million) of
total knitwear export in FY 2003-2004 followed by USA (11%, i.e. US$ 236.79 million).
This has become possible because it can
satisfy the ROO of EU as value addition
is higher (75%) in this sector. After the
adoption of the guidelines for the
application of the scheme of generalized
tariff preferences by EC knitwear export
from Bangladesh to EU rose
precipitously. The two-stage
transformation requirement of ROO in
1999 boosted market penetration in EU
further; it contributed a growth of
101.19% since 2000-2001.
Bangladesh RMG sector has successfully passed some critical tests and is now sailing with two masts:
knit and woven. The sub-sectors are now in healthy competition among themselves to take the role of
leadership within the country.
Woven Garments 47% and Knitwear 28%. In a period of just 9 months (up to March FY 2004-05) the
figures have changed dramatically, the share of woven garment to the country's export has reduced to
43.90%, on the other hand the share knitwear has increased to 33.64%. It indicates clearly that the
knitwear is performing well in both ways. In the first 9 months of FY 2004-05 the scenario is as
under:
√ Women empowerment
√ Gender equality
√ Improved health & nutrition
√ Reduced child marriage
√ Reduced infant mortality
The development in the sector also contributed a lot in the growth and development of the backward
linkage industry of the country.
Competitive wage rate together with easily trainable workforce, entrepreneurial skill, expanding
supply side capacity, and government policy support helped to translate the comparative advantages
into competitive advantages. The core strength of the knitwear sector is its backward linkage. The
entrepreneurs of the sector not only increased their stitching capacity overtime but also invested in the
allied industry to augment the overall capacity of the total sector with the same pace. Over the period
of time knitwear sector gradually became almost self sufficient in fabric and yarn. This improvement
has become possible because of the integrated growth of spinning factories in line of the growth of
country's stitching capacity and increased need of the yarn and fabric.
Though woven is the highest contributor (47%) in terms of gross export, but knit becomes the most
significant component if we consider net export with a share of 32%. This has resulted because of the
backward linkage industry that has grown over time which helped the knitwear sector to have the
higher value addition and there fore a much higher net retention rate.
√ Local yarn suppliers provide around 75% of the total requirement of the sector.
√ We have more than 100 composite factories; besides the composite units many garments have
their own dying and finishing units. A separate dying and finishing industry also has grown up
over the time to support the sector.