One of the factors that have driven Bangladesh’s textile and garment industry over recent years is the growing foreign direct investment in the industry. The country’s cheap labor, preferential location in the heart of Asia-Pacific and government support are some positive reasons.
Foreign direct investment in Bangladesh’s textile and garment industry increased by 11 per cent in 2016 compared to the previous year. South Korea was the largest investor in fiscal year 2016. South Korean apparel companies share was over 32 per cent in total FDI followed by Hong Kong. FDI from the United States stood at a modest $33.02 million.
An increasing number of international investors and famous fashion brands, such as Zara, H&M, Gap and Levi’s, are manufacturing and importing clothes from Bangladesh. Bangladesh is the world’s second largest garment exporter and is expected to export over $50 billion worth of garments by 2021.
The South Asian country also enjoys tariff-free market access in EU, Canada, Australia and some other major textile and garment markets in the world. In order to further increase FDI in the sector, Bangladesh is promoting investment opportunities not only in the textile sector but in the allied energy and infrastructure sectors that will help boost volumes in the textile trade.