In the first quarter of the current fiscal year, garment exports from Bangladesh dropped 1.64 per cent. Earnings from the sector fell 11.52 per cent short of the quarter’s target. The country’s overseas shipments have declined. The apparel industry is backbone to the country’s economy and the world’s favorite sourcing hub. In the last seven months, around 59 garment manufacturing units have had to shut shop rendering around 25,900 workers jobless.
The Bangladesh garment industry is facing a challenging scenario. The world’s second biggest garment exporter may soon be overtaken by Vietnam. The poor show by Bangladesh on the back of faltering price points has adversely impacted the inflow of investment, complicated further by its inherent weakness on the product diversification front. A huge number of its factories are small and medium enterprises, which fail to live up to and maintain the requisite compliance standards.
Among the proposals to revive growth are one per cent incentive on exports with immediate effect, devaluation of the currency, doubling the loan rescheduling period for the existing sick garment factories, fund allocation for modernization, tech upgradation of factories and a 0.25 per cent source tax with retrospective effect.