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Bangladesh to sustain apparel exports through FDI, mechanised production

"In the last five years, Bangladesh has emerged as one of the top exporters to the US and the European Union. The country, over the years, has made a deep-rooted impact by exporting a record value of denim to both these markets. As the statistics from the European Statistical Office reveal, Bangladesh exported 11.46 per cent more denim products in 2018 than in 2017. The total value of these exports was $1.65 billion with the country holding the highest market share of 29.12 per cent in Europe."

 

Bangladesh to sustain apparel exports through FDIIn the last five years, Bangladesh has emerged as one of the top exporters to the US and the European Union. The country, over the years, has made a deep-rooted impact by exporting a record value of denim to both these markets. As the statistics from the European Statistical Office reveal, Bangladesh exported 11.46 per cent more denim products in 2018 than in 2017. The total value of these exports was $1.65 billion with the country holding the highest market share of 29.12 per cent in Europe.

What worked in Bangladesh’s favour are timely technological upgrades, strong backward linkage, especially fabrics and branding of products. The ongoing trade war between the US and China is also fuelling growth.

Technologies and value-added products to drive growth

Bangladeshi denim manufacturers have introduced latest washing and fabric technologies to improve the qualityBangladesh to sustain apparel exports through FDI mechanised production of their goods. For instance they now use laser technology to wash and design their denim instead of water and stone which increase the sustainability of their products.

Bangladesh manufacturers are offering a variety of value-added products, which along with a sense of safe workplace and sustainable act as catalyst to drive growth in the sector. Events like Bangladesh Denim Expo are also helping the country to grow and reach the desired level. Increased fabric manufacturing capacity and other backward linkage have helped the sector to grab a larger market share in the country which currently has 32 denim mills with a capacity of 450 million meters of fabrics per annum.

Diplomacy and negotiations for increasing apparel exports

The current market situation presents further opportunity to increase exports volumes. According to the Asian Development Bank estimates, Bangladesh is likely to earn an additional $200 million from apparel exports over the next two years. To achieve this, the country needs to develop apparel diplomacy and increase its negotiation capacity to improve trade facilities.

Competitive prices and a capacity to execute bulk orders are some of the major contributors to Bangladesh’s success in the export markets. However, the country may no longer benefit from low prices as its production costs have increased. To sustain growth, the country now needs to concentrate on technology-driven manufacturing. It can also attract foreign investments to acquire knowledge and create skilled workforce from the foreign companies.

The Bangladesh government should also provide subsidies in gas and electricity connections to increase its fabric production capacity. This will increase its competitiveness in the market.

 
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