Bangladesh Textile Industry: Present Scenario, Future Prospects and Challenges

Last Updated on 20/03/2026

Introduction

Textile and clothing sector plays a vital role in the growth of economy; generation of more than 40% of the country’s industrial employment and about 84-85% of the merchandise export earnings through ready-made garments (RMG) by 2024. The RMG sector employs about 4 million workers directly, and the broader textile-apparel value chain supports several million more workers; women still constitute the majority of the workforce in apparel manufacturing. Until the liberation of Bangladesh, the textile sector was primarily an import-substitution industry. It began exporting ready-made garments (RMG) including woven, knitted and sweater garments in 1978, which grew spectacularly during the next two and a half decades from US$3.5 million in 1981 to a global export industry valued at around US$47 billion annually by 2024. Apparel exports grew, but initially, the RMG industry was not adequately supported by the growth up and down the domestic supply chain (e.g. spinning, weaving, knitting, fabric processing, and the garment accessories industries). Until FY 1994, Bangladesh’s RMG industry was mostly dependent on imported fabrics- the primary textile sector (PTS) was not producing the necessary fabrics and yarn. Over time, however, Bangladesh developed strong backward linkage industries, especially in spinning, knitting, dyeing, finishing, accessories and packaging, though dependence on imported cotton, man-made fibers, chemicals, machinery and a large share of woven fabric still remains high.

It is essential to identify and analyze the problems of primary sectors. Supporting basic textile industries such as spinning, weaving/knitting, dyeing and finishing industries are known as backward linkage industries. RMG sector and printing and packaging sector are known as forward linkage industries. From study of textile sectors; it was found that:

• Many textile mills have faced lower or uneven capacity utilization in recent years because of gas and power shortages, high raw material cost, exchange-rate pressure, global demand slowdown and financing constraints.
• We are still highly dependent on foreign machinery, spare parts, and in many cases foreign technical service providers.
• We still have to rely on foreign engineers/experts in some advanced areas; but this cannot be a long-term solution for the economic and technological growth of our country.
• It is well known to all of us that Bangladesh still lacks adequate research and development, product development, testing, innovation and textile recycling facilities compared to the size of the industry.

Structure of the Textile Industry in Bangladesh

There are two types of textile industry in Bangladesh. They are as following:

A. Backward linkage industries

Supporting basic textile industries such as spinning, weaving/ knitting, dyeing and finishing industries are known as backward linkage industries.

B. Forward linkage industries

RMG sector, printing, and packaging sector are known as forward linkage industries. Most of the textile industries are in the private sector.

According to constructional building design, there are two types of textile mill. They are as following:

i. Horizontal oriented textile mill

This factory or mills are constructed in ground floor based industry. Generally heavy weight large machineries are placed at this type of factory.

ii. Vertically oriented textile mill

This factory or mills are vertically constructed as a multistoried type building. Normally they are five to eight stored building. Generally light weight machinery is placed at top floor and heavy machinery is placed in ground to first floor. Process sequence or manufacturing steps are arranged according to product output. RMG is a vertically oriented factory.

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Major Textile Sector and Its Product

Major textile sectors of Bangladesh and its products are given in following table:

Table-1: Sector wise textile products

There are also some composite mills in our country. Two or more than two different mills are combined under one administration is called composite mill.

The combination of composite mills can be following:

• Weaving and dyeing finishing
• Knitting and knit dyeing
• Dyeing, printing and garments

Bangladesh export-oriented ready-made garment manufacturing and primary textile (spinning, weaving, knitting, dyeing) sector with back-up support of the accessory (trimming and packaging) industries, contributes about 84-85 percent of the country’s merchandise export earnings through RMG alone; the share is higher if home textile and other textile items are included.

The domestic textile industry has made appreciable contribution to the rapid growth of Bangladesh RMG industry. International RMG buyers preferred Bangladesh mainly for two reasons:

• Competitive prices of high volume lower-end and mid-value products and
• Presence of a growing primary textile industry capable of ensuring sizable supply of inputs to RMG industry, shorter lead time, and higher local value addition.

But the export oriented RMG industry is now at stiff competition because of a quota-free global market, rising compliance and traceability requirements, concentration in basic products, and stronger competition from China, India, Vietnam, Cambodia, Pakistan and Turkey. It is widely believed that the development of an effective backward linkage along with a well-designed road map for future growth would provide safeguard measures to retain and expand the Bangladesh textile and RMG export in the global market.

Development of the textiles and RMG industries calls for preparation of a pragmatic road map with synchronized strategic action plans in respect of technology, inputs, HRD, quality, productivity, compliances, sustainability, decarbonization, product diversification, man-made fiber (MMF) capability, and other trade promotion aspects. Preparation of road map essentially requires up-to-date information in aspect of past performances to analyze past and present situation and draw out conclusions that would serve as a basis for future courses of action for development of the sector. On the other hand, the issues related to quality, productivity, compliances and cost minimization depend on sustainable supply of skilled manpower to the sector.

The requirement of yarns (cotton, polyester, CVC, PC, mélange, acrylic, viscose, recycled fibers and MMF yarns), fabrics (woven, knit) and RMG are vast compared to available capacity. To fill up the demand supply gap, there is still need of a huge amount of investment (DDI/FDI), better capacity utilization of the existing m/c, skilled manpower (textile engineers), and product diversification.

At present, the DOT (Department of Textiles) has established MIS and website to complement the objective of the ministry’s need in respect of information and database. Updated information about current scenario of textile and RMG sectors of Bangladesh is available from the websites/databases of following organizations:

• Bangladesh Textile Mills Association (BTMA)
• Bangladesh Garments Manufacturers and Exporters Association (BGMEA)
• Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA)
• Specialized Textiles & Power Loom Manufacturers and Exporters Association
• Terry towel and home textile manufacturers/exporters organizations
• Bangladesh Dyed Yarn Exporters Association (BDYEA)
• Export Promotion Bureau (EPB)
• Bangladesh Bank
• Bangladesh Bureau of Statistics (BBS)
• Bangladesh Handloom Board
• Different textile institutes and universities

Importance of Textile Industry in Bangladesh

The textile has been an extremely important part of socio-economic development for a very long time for a number of reasons:

• The textile industry is connected with meeting the demand for clothing, which is a basic necessity of life.
• It is an industry that is more labor intensive than most other manufacturing sectors in Bangladesh, and thus plays a critical role in providing employment for people.
• It has contributed to employment creation, poverty reduction as well as women empowerment.
• About 84-85% of merchandise export earnings come from RMG alone; the share is higher if other textile products are added.
• RMG contributes roughly 10-11% of GDP directly, while the broader textile-clothing value chain is one of the largest contributors to manufacturing value addition.
• Provide huge opportunities for the supporting industry banking, insurance, shipping, transport, toiletries, cosmetics, hotel and other related economical activities.
• Provides about 4.0 million direct employment in RMG where women still represent the majority of the workforce.
• Several million livelihoods, commonly estimated at around 10-12 million people directly and indirectly, depend on this trade.
• Provides substantial employment in textile waste recycling, cotton-waste based spinning, accessories, transport, warehousing and other related activities.

Present Scenario of Textile Sector in Bangladesh

A) Spinning sector

Different types of yarns are produced at this sector. Most of the yarn is used in domestic and export oriented weaving and knitting mills in Bangladesh, while specialized yarns and a large portion of MMF-based yarns are still imported. Bangladesh remains one of the world’s largest cotton importers, because domestic cotton production is very limited.

The current situation of spinning sector is given below:

Table-2: Spinning sector 

Spinning sector is facing stiff competition from competitors like India, Pakistan and Vietnam due to price fluctuation of raw cotton, high energy cost, exchange-rate pressure, rising interest rates and global demand uncertainty.

You may also like: List of Yarn Spinning Mills in Bangladesh with Location

B) Weaving section

There are various design and structure oriented woven fabric produced by this sector. Mainly plain weave fabric is a major production category. This sector can produce only around 35-40% of woven fabrics required for export-oriented woven RMG, though it supplies a much larger share of the domestic market. The situation of weaving sector of Bangladesh is given below:

Table-3: Weaving sector 

Bangladesh has become an important global producer of denim fabrics and denim garments.

C) Power loom sector

Mainly synthetic and specialized products are produced. Sharee, lungi, and gamcha are also produced at this sector. Local primary textile industry meets most of domestic fabric demand. The power loom sector remains largely MSME-based and cluster-driven, with major concentration in Narsingdi, Baburhat, Sirajganj, Belkuchi and nearby areas. Recent consolidated official 2024 statistics for all power loom units are not published regularly in one single source, but the sector remains very important for the domestic market.

D) Hand loom

This sector is very old and traditional sector of Bangladesh. Jamdani, and banarosi like luxurious share are produced by this sector. The hand loom industry provides employment for a large segment of the rural population of Bangladesh. It also helps in self-employment of rural women.

Jamdani remains one of the most prestigious traditional products of Bangladesh, and the sector continues to have cultural and economic importance. However, handloom producers now face strong competition from mechanized looms, design imitation, low financing, weak market access and rising input cost. Recent comprehensive official production and employment data are not updated annually in one single source. Bangladesh Handloom Board looks after the sector.

E) Knitting, knit dyeing

There are two types of knitting and knit dyeing factory in Bangladesh. Some factory produce fabric for export demand and large no. of factory produce knit fabric for domestic need. Local knit sector can supply around 90-95% of knit fabric for export-oriented knit RMG, which is one of the strongest backward linkage advantages of Bangladesh.

• Export oriented knit/composite units – around 900+
• Local knit units – several thousand
• Employment – large, especially in integrated knit, dyeing and garments clusters

Knitwear now contributes the larger share of Bangladesh’s apparel exports.

F) Dyeing and finishing sector

These mills process the grey woven and knit fabric and produce different colored dyed and printed fabric. During wet processing of fabric these mills consume a huge amount of underground water and produce waste water (effluent).

• No. of units – around 450-500 modern dyeing, printing and finishing units (industry estimate)

Many export-oriented dyeing and finishing mills now operate ETPs and comply with buyer/environmental requirements, but water use, chemical management, sludge handling and energy consumption remain major concerns.

G) RMG sector in Bangladesh

• No. of units – around 3,500 active export-oriented factories
• Employment – about 4 million, where women remain the majority of the workforce
• Bangladesh is the world’s second-largest apparel exporter after China

Contribution of RMG sector in national economy of Bangladesh

• By 2024, the contribution of RMG (woven and knitwear) to national merchandise export was about 84-85 percent, with annual export earnings around US$47 billion.
• Knitwear contributes the larger share of RMG exports, roughly 56-57%, while woven garments contribute about 43-44%.
• Home textile export remains an important diversification segment, though it is below the pandemic-era peak.
• Bangladesh now has the highest number of LEED-certified green garment factories in the world, which has strengthened its image in sustainable manufacturing.

The garment manufacturing sector in Bangladesh has moved beyond the old slogan: “$50 billion by 2021.” The current vision is to sustain export growth beyond that threshold through higher value addition, product diversification, MMF apparel, non-traditional markets, innovation, productivity and sustainability.

RMG market

All country of European Union (EU) and USA are the major buyer of the RMG of Bangladesh. By 2024, about half of Bangladesh’s apparel exports go to the EU, while the USA accounts for around 18% of the total. The UK, Canada, Japan, Australia, India, South Korea and other non-traditional markets are also important and growing. Mainly EU is a strong knit RMG market and USA is a major market for both woven and knit RMG.

H) Sericulture sector

This sector is related to the production of silk worm, cocoon, silk yarn and fabric. Cultivation of mulberry trees for feeding of silk worm is closely associated to development of sericulture sector. Bangladesh sericulture board looks after this sector and concentrated mainly in Rajshahi area of Bangladesh. This sector contributes to the rural economy of women folk.

Compared with cotton-based textiles, the sericulture sector is now small, but it still has cultural, rural-employment and niche-market importance. Recent consolidated national production and employment data are limited, and the sector remains far below its historical potential.

I) Jute sector

Jute was a golden fiber of Bangladesh. Before 1980 jute earn a huge amount of foreign currency and the economy of Bangladesh was depend on jute. The market of jute was decreasing for low price of synthetic polyethylene. Till today jute is used at different sectors due to environmental friendly reason.

Bangladesh still remains one of the leading producers and exporters of jute and jute goods. In recent years, export earnings from jute and jute goods have generally remained below US$1 billion annually, but the sector is receiving renewed attention because of global demand for biodegradable, eco-friendly and diversified products. Present focus is not only on traditional products, but also on diversified jute goods, shopping bags, geotextiles, composites and eco-friendly packaging materials.

Future Prospects and Challenges in Bangladesh Textile Sector

• As the population is growing and the standard of living is increasing in Bangladesh, the demand for textiles is increasing rapidly.
• Moreover, growth rate of RMG export can continue as Bangladesh has edge over many competitors due to large manufacturing base, competitive labor cost, improving compliance and strong knit backward linkage.
• This present an urgent need to dramatically increase capacities in spinning, weaving, knitting, dyeing, printing and finishing sub-sectors, especially in woven fabrics, MMF, recycled fibers and technical textiles.
• This will require the adoption of the most modern and appropriate technology to ensure quality products at competitive prices.
• To be competitive in the global market both in terms of cost and quality, and also in terms of lead time, sustainability, traceability and compliance.
• Production and export of high value added products for higher retention of foreign exchange.
• Preparation for LDC graduation and post-graduation trade arrangements is now a major issue.
• Diversification of export items and finding new destination for export.
• To keep up the high growth rate of RMG export.
• Expansion of infrastructure such as road, port, railway, inland logistics and container handling capacities to accommodate import and exports.
• Shortage of gas and power supply.
• Environmental pollution, wastewater management and decarbonization pressure.
• Financial pressure on new textile projects and high cost of borrowing.
• Lack of technical, design, product development and market research facilities.
• Shortage of skilled manpower.
• Dependence on imported cotton, MMF, chemicals, dyes, machinery and spare parts.
• Buyer price pressure, wage pressure, and stricter ESG and due diligence requirements.
• Strong competition from Vietnam, India, China, Pakistan, Cambodia, Turkey and emerging sourcing destinations.

Way forward

1. Attaining stronger self-reliance in yarn and fabric production to ensure that the export oriented RMG industries raw material needs can increasingly be met locally, especially in woven fabric and MMF-based categories.

• To ensure higher retention of foreign exchange
• To create employment opportunity
• To reduce dependability of technician from overseas countries

2. Giving more emphasis on research for

• Production development for export diversification and export of higher value added product
• Process development for cost minimization and quality improvement
• Market research for finding new destinations of export and for sustainable growth of exports
• Product development in MMF, recycled fibers, technical textiles and circular textiles
• Energy efficiency, water reuse and sustainable chemical management

3. Ensuring the sub-sectors of the industry is better articulated resulting in a more synchronized development in the industry.

4. Govt. policy supporting

• The spinning sector, weaving sector, MMF sector and recycling sector to stay competitive and sustainable
• Reduction/rationalization of import duty on machinery, raw materials, MMF, dyes and chemicals
• Financial support to establish new textile industries in soft term and to modernize existing mills

5. Improvement of the road and the communication infrastructure.

6. Ensuring reliable power and gas supply, along with renewable energy and energy efficiency support.

7. Diplomatic and trade-policy efforts to ensure better market access after LDC graduation, including USA market access improvement and finding new destinations of export.

8. Emphasis on quality textile education, industrial training, product development, design capability and R&D to supply skilled manpower.

9. Appropriate steps ensuring protection of environmental pollution, wastewater treatment, water recycling and circularity.

10. More emphasis on digitalization, traceability, compliance, productivity improvement and green transformation.

Table-4: Textile sector of Bangladesh at a glance

Conclusion

The textile industry in Bangladesh continues to play a vital role in the national economy, contributing significantly to GDP, export earnings and employment. Bangladesh is one of the world’s largest apparel exporters and the second-largest apparel exporter after China, with a strong industry encompassing spinning, knitting, weaving, dyeing, finishing, and garment manufacturing. Success of textile industry of Bangladesh is attributed to its cost-effective labor, large production base, improving compliance and safety standards, a gradually strengthening domestic supply chain, and favorable market access in major destinations. However, future competitiveness will depend on diversification into higher value-added and MMF-based products, energy security, productivity, logistics improvement, sustainability, circularity, and preparation for LDC graduation.

References

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Mazharul Islam Kiron

Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. Mr. Kiron is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.

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