Bangladesh’s Backbone: Garment Industry
The garment industry in Bangladesh is the heartbeat of the nation’s economy. It is the country’s largest export earner, employing millions, and shaping global perceptions of Bangladesh as a textile powerhouse. From humble beginnings in the late 1970s, the industry has grown into the world’s second-largest apparel exporter, only behind China.
In fiscal year 2022–23, Bangladesh exported $46.99 billion worth of garments out of a total $55.56 billion in exports. That means nearly 84 percent of all export earnings came from ready-made garments. According to the World Bank, the industry contributes about 11 to 12 percent of the country’s GDP. No other single sector dominates the economy to this extent.
The Rise of the Garment Industry in Bangladesh
The growth of the garment industry in Bangladesh has been remarkable. In the late 1970s, the sector was almost non-existent. A few factories operated with limited capacity. Today, the country is home to over 4,000 garment factories. These factories employ about 4.4 million workers, more than 60 percent of whom are women.
The industry took off during the 1980s under the Multi-Fibre Arrangement, which gave Bangladesh preferential trade access to Western markets. Cheap labor, low production costs, and strong buyer networks fueled rapid growth. International retailers like H&M, Walmart, and Zara now source a significant share of their garments from Bangladesh.
Contribution to Exports and GDP
The biggest role of the garment industry in Bangladesh is in exports. In 2022–23, the sector earned $46.99 billion, up from $42.61 billion in 2021–22. Knitwear exports grew 10.88 percent, while woven exports rose 7.5 percent. Europe accounts for about 50 percent of exports, the United States about 20 percent, and the rest goes to Canada, Japan, and emerging markets like India.
This dominance makes the industry the backbone of Bangladesh’s export economy. According to BGMEA, garments alone represent nearly 84 percent of total export earnings. In GDP terms, the sector contributes around 12 percent. For comparison, agriculture contributes about 11 percent, and remittances contribute around 6 percent.
Employment and Social Impact
Employment is another major contribution of the garment industry in Bangladesh. The industry directly employs about 4.4 million workers. Indirectly, it supports 10 to 12 million more through supply chains, transport, packaging, food vendors, and accessories.
The social impact is even greater. The industry has become one of the largest sources of women’s employment in the country. More than 60 percent of workers are women, often from rural backgrounds. This has empowered women economically and socially, giving them income, independence, and decision-making power in their families.
However, challenges remain. Low wages, poor working conditions, and factory safety issues have drawn criticism. The Rana Plaza collapse in 2013, which killed over 1,100 workers, was a tragic reminder of the risks. Since then, safety standards have improved under international pressure, but wage and labor rights remain debated issues.
Global Position and Market Share
The garment industry in Bangladesh holds a strong global position. Bangladesh is the second-largest apparel exporter in the world, after China. Its garments are known for affordability, bulk production, and reliable delivery.
The European Union is the biggest market, taking about half of exports. Duty-free access under the Everything But Arms (EBA) scheme has boosted sales. However, Bangladesh’s upcoming graduation from Least Developed Country status in 2026 may end these trade privileges. This could increase tariffs by 8 to 12 percent, threatening competitiveness.
The United States is the second-largest market, importing about $10 billion in Bangladeshi garments in 2022. Canada, Japan, and Australia are also important buyers. New markets like India, South Korea, and Latin America are growing steadily.
Dependence and Risks
While the garment industry in Bangladesh is the backbone of the economy, dependence on a single sector creates risks. Any global shock in demand, such as during the COVID-19 pandemic, hurts exports and jobs. In 2020, cancelled orders cost Bangladesh $3.2 billion in lost revenue and left millions of workers without income.
Global competition is also rising. Countries like Vietnam, India, and Ethiopia are offering competitive prices and better infrastructure. Bangladesh faces the challenge of maintaining low costs while improving quality and sustainability.
Labor rights and compliance issues add to the pressure. International buyers are increasingly demanding sustainable and ethical sourcing. Factories that fail to meet standards risk losing contracts.
Government Support and Policies
The government recognizes the importance of the garment industry in Bangladesh and has introduced policies to support it. Export incentives, cash subsidies, and favorable tax structures help keep the sector competitive. Investments in infrastructure, such as the Padma Bridge and port upgrades, aim to improve logistics.
Skills development is another priority. The industry needs more skilled workers to shift toward higher-value products. Training programs are being launched to prepare workers for automation and digital production.
At the same time, the government is encouraging diversification. Sectors like information technology, pharmaceuticals, and shipbuilding are being promoted to reduce dependence on garments.
Sustainability and the Future
Sustainability is becoming central to the garment industry in Bangladesh. Buyers demand eco-friendly production, reduced carbon footprints, and ethical labor practices. Bangladesh is responding with green factories.
According to BGMEA, Bangladesh now has over 200 LEED-certified green factories, the highest number in the world. These factories use less water and energy, reduce emissions, and improve working conditions. This shift gives Bangladesh a competitive edge in the global market.
The future also depends on innovation. Moving up the value chain into high-end fashion, technical textiles, and digital design can increase earnings. Diversifying markets beyond Europe and the US will reduce risks. Stronger worker protections and fair wages will create a more resilient industry.
The garment industry in Bangladesh is the nation’s economic backbone. It dominates exports, contributes heavily to GDP, and employs millions. It has empowered women and given Bangladesh global recognition as a textile hub.
Yet dependence on a single industry is risky. Global competition, trade policy changes, and climate vulnerability all pose challenges. The way forward is diversification, sustainability, and innovation. By building on its strengths while addressing weaknesses, Bangladesh can secure a powerful future for its garment industry.