RMG, the large scale production
of readymade garments is a relatively new phenomenon
in Bangladesh. The hundred percent export-oriented
RMG industry experienced phenomenal growth over
the years. In 1978, there were only 9 export-oriented
garment manufacturing units, which generated export
earnings of hardly one million dollar. Some of these
units were very small and produced garments for
both domestic and export markets.
Within a short period, Bangladeshi entrepreneurs
acquired the expertise of mobilizing resources to
export-oriented RMG industries. Foreign buyers found
Bangladesh an increasingly attractive sourcing place.
To take advantage of this cheap source, foreign
buyers extended, in many cases, suppliers' credit
under special arrangements. In some cases, local
banks provided part of the equity capital. The problem
of working capital was greatly solved with the introduction
of back-to-back letter of credit, which also facilitated
import of quality fabric, the basic raw material
of the industry.
Till the end of 1982, there were only 47 garment
manufacturing units. The breakthrough occurred in
1984-85, when the number of garment factories increased
to 587. The number of RMG factories shot up to 4740
in 2007-2008. The industry has grown at the rate
of 59% comparing from 1998-1999 to 2007-2008. In
2007-2008, the export earning of the RMG sector
was $10.70 billion with 16.18 % growth than the
Although Bangladesh exports garments to some 30
countries, its exports are highly concentrated in
two major markets, the USA and EU. The USA as the
largest importer country imported RMG products worth
3225.66 million USD from Bangladesh in 2007-08.
On the other hand Bangladesh
exported RMG in the EU countries worth 6490.65 million
USD. Of the individual members of the EU, Germany
is the largest importer of RMG (2057.75 Million
USD) from Bangladesh and it is followed by the UK
and the Netherlands.
Since the late 1970s,
the RMG industry started developing in Bangladesh
primarily as an export-oriented industry although;
the domestic market for RMG has been increasing
fast due to increase in personal disposable income
and change in life style. The sector rapidly attained
high importance in terms of employment, foreign
exchange earnings and its contribution to GDP.