Term Paper on Readymade Garments Export Business in Bangladesh

The hundred percent export-oriented RMG industries have experienced phenomenal growth during the last 15 years. Within a very short period of time, it has attained great importance in terms of its contribution to GDP, foreign exchange earnings and employment and also as a vehicle of social changes. The export earning data of Bangladesh shows that in 19884-85, ready-made garment sector earned 12.39 %( $116 million) of the total export. This was raised to 36.46 %( $471 million) in 1989-90. This share rapidly went up to 53.36 %( $1064 million) in 1991-92. Surprisingly, the share showed no increase for the last three years. Bangladesh garments products are facing various barriers and difficulties in the international market. Garments’ contribution to the total export earning remained constant at around 52% for the years (52.84%) in 1994-95 and 52.63% in 1995-96. The total amount of RMG export in 2004-05, 2005-06 and 2006-07 was $5689.09 million, 7900.80 million and 4730.36 million. This is the current situation of RMG export from Bangladesh. 

The first ready-made garment factories in Bangladesh aimed at the export market were opened in the late 1970s by investors from other Asian countries whose exports had been restrained by quotas imposed by importing nations. By the mid-1980s, the ready-made garment industry had become a strong export earner. Garment exports brought receipts of only US$3 million in FY 1981, but by 1984 exports had risen to US$32 million, and the following year revenue soared to US$116 million. For FY 1985 and FY 1986, ready-made garments were the second biggest foreign exchange earner for Bangladesh after jute.

The surge in Bangladeshi exports eventually caused a reaction among some industrial nations. Canada, the European Economic Community, and the United States expressed concern that inexpensive Bangladeshi garments were flooding their markets. In 1985, after a series of notices as called for by multilateral agreements, the United States--which was the destination of about 25 percent of Bangladesh's garment exports--began imposing quotas on Bangladeshi garments, one category at a time.