Myanmar’s apparel exports are expected to more than double by 2020 owing to the favorable government policies and low labor costs in the country. One of the reasons for this is the high wages and relatively higher cost of production in countries like Vietnam, India, China, and South Korea, which is driving entrepreneurs to Myanmar. Secondly, entrepreneurs from China, South Korea, India, and Vietnam are keen on investing in the garment sector of Myanmar to take advantage of the benefits it enjoys with the developed markets of the US, EU, and Canada.
The new foreign investment law, which was passed in 2012, increased the maximum shareholding of foreign parties in manufacturing to 50 per cent, making the country a suitable sourcing destination for garments. The law also allows foreign investors to lease land for an initial period of 50 years, tax exemption for the first five years, and tariff-free import of raw materials to these companies.
The garment industry of Myanmar employs more than 2,50,000 people and accounts for 10 per cent of export revenues. Myanmar offers some of the cheapest labor costs on the planet combined with easy access to Asian markets -- both attractive features for corporations looking to source low-cost, ready-made garments for export.