Pakistani entrepreneurs investing in Bangladesh's textile sector have expressed increased concerns about the recent turmoil and unrest in the country, fearing instability similar to that in Pakistan. The prospect of martial law in Bangladesh heightens these concerns, potentially jeopardising the stability that attracted these investors in the first place.
In recent years, several Pakistani textile entrepreneurs relocated their operations to Bangladesh. The move was motivated by lower production costs, preferential trade agreements, and superior infrastructure. The world's second-largest apparel exporter after China, Bangladesh has been steadily gaining market share as Western sanctions have hit Chinese exports. Many Pakistani firms, particularly in home textiles and readymade garments, have capitalised on Bangladesh's strategic advantages, reducing production costs by nearly 50 per cent.
Among the notable companies that set up operations in Bangladesh includeSoorty Enterprises, which invested $35 million in a garment factory employing around 6,000 Bangladeshis, and Interloop. Other significant names include Pak Denim, Crescent Textile Mills, Gul Ahmed Textile Mills, Kohinoor Textile Mills, Al-Karam Textile Mills, Nishat Mills (part of the Nishat Group), Artistic Milliners, and Masood Textile Mills.
These companies benefited from Bangladesh's lower labor costs and favorable trade agreements with the European Union and the United States, which offer better market access and lower tariffs compared to Pakistan. Despite Pakistan being granted GSP+ status by the EU in 2013, Bangladesh's economic incentives made it a more attractive destination for Pakistani firms seeking to maximise profits.
However, Muhammad Jawed Balwani, Chairman, Pakistan Apparel Forum, notes, while prominent companies like Soorty and Interloopcontinue to operate successfully in Bangladesh, the political climate under former Prime Minister Sheikh Hasina was not always welcoming, as her policies were seen as pro-India. The new military government would be more favorable toward Pakistani investors, he hopes.
