With record export earnings of $42.61 billion in the fiscal year 2021-22, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has set a target to earn $100 billion by 2030 from the clothing products. In attaining the target of $100 billion export target, the sector has to earn $7.17 billion each year. Against 35.47 per cent growth in FY22, the sector also has to post an 11.26% annual growth in export earnings till 2030. The ambitious target was set at a time when the global economies are bleeding due to the Covid-19 pandemic impacts and ongoing Russia-Ukraine war.
On the other hand, the LDC graduation in 2026 will be another challenge for the exporters. This is because of possible duty free benefits withdrawal by the importing countries in the post-graduation period. Several researches showed, Bangladesh will have to range from 9%-12% duty after Bangladesh’s graduation to a developing country.
In FY22, export earnings from apparel products rose sharply by 35.47 per cent to $42.61 billion, which was $31.45 billion in the previous year. The sector contributed 81.81 per cent to the national exports. Of the $42.61 billion, knitwear products fetched $23.21 billion, up by 36.88 per cent from last fiscal year’s $19.91 billion, while woven items earned $19.39 billion, registering a 33.82 per cent growth. Knitwear products contributed much better than woven products.
Knitwear products contributed 44.56 per cent, while woven products 37.23 per cent. For sustaining the growth and to earn the $100 billion from the sector, there is a strong need to bring balance between woven and knitwear products. Knitwear products did well as the sector has a strong backward linkage and it can meet 85% to 90% demands of raw materials from domestic sources.
On the other hand, the woven sector can meet around 50 per cent raw materials from domestic sources, which is a barrier to growth. To reduce the gap between the woven and knitwear sector, the industry people have to come up with new investments to improve capacity to supply raw materials from local factories.