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Bangladesh has strong advantage in clothing

The revealed comparative advantage (RCA) of clothing industry of Bangladesh is high compared to major global competitors like China, Vietnam and India. The RCA of Bangladesh in the apparel industry was around 24 points in 2000, which increased to 29 in 2015.

Bangladesh’s high revealed comparative advantage in garments reflects the growing share of garment industry in its overall export basket. The RCA is a measure of the relative market share computed as the ratio of a country’s share in world exports of a particular item to that of the country’s overall share in world exports of all items.

However, India’s RCA in the apparel industry declined to 2.38 in 2015 from 4.47 in 2000. Since India’s liberalisation more than a quarter century ago, India’s share in the global exports of textile and footwear has declined even as smaller economies such as Bangladesh and Vietnam have seen their market shares rise sharply.

In the US market, India’s apparel exports accounted for only four per cent of US’ overall apparel imports in 2015, while Vietnam, Bangladesh and China accounted for 12 per cent, six per cent and 37 per cent market shares respectively.

 
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