Bangladesh's Knitwear


Development and Evolution of Bangladesh Knitwear Industry:

Looking  byond the Horizon

Prelude: Undeniably today BKMEA; the Apex Trade Body to represent solely the Knitwear Sector of Bangladesh, stands out in the global panorama with distinct identity and stature. Our finely-weaved knitwear products have placed us to the world renowned buyers as an unparalleled sourcing destination. BKMEA adheres to innovation and creativity so that the sectorial policy-making process becomes realistically and strategically perfect and gives off the result that expedites its developmental phase.

Bangladesh Knitwear industry keeps great contribution in the Bangladesh Economy through generating Employment; Involving Women in the Formal Sector, Increased Substantial Export Earnings, Women Empowerment, Reduction of Child Labor, Gender Equality, Health & Nutrition, and Diminishing Child Marriage etc. along with the gradual increase of knitwear exports to across the globe. Bangladesh now holds number two position in the world in terms of knitwear export and is bandied about as the Next possible champion in exporting knitwear products as China is gradually backing out of apparel business. The value addition from the knitwear sector is about 75%. The contribution in GDP is about 6.92% in FY 2013-14.

In line with the global trends, our entrepreneurs are introducing state-of-the-art technology in their production lines to match up to the emerging and dynamic needs. BKMEA’s motto is to stay afloat in the international competition & Markets with chic, elegant quality products .We are in continuous effort to strengthen the sustainable capacity building process and ensure quality to address the worldwide tastes and demands. And thus today our missions are transnational in nature. With over two million women workers employed in semi-skilled and skilled jobs producing clothing sector, the development of the apparel export industry has had far-reaching implications on the society and economy of Bangladesh. The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Bangladesh.

Structure of Bangladesh Knitwear Sector: The ready-made garment (RMG) industry is a strategic sector for Bangladesh. In FY2013-14, it provided 4.2 million direct jobs, 16 percent of GDP, and more than 75 percent of foreign exchange earnings. Over the past two decades, starting from the early 1980s, Bangladesh has built a strong reputation centered on price advantage via low-cost labor and investment incentives; production capacity, and satisfactory quality levels, especially in value and mid-market price point segments.

The export-oriented Knitwear industry is the top-leading exporting sector in Bangladesh in terms of export. Its contribution in creating employment opportunities for female workers without high educational background in the formal sector is exceptional! The industry has a great contribution in poverty reduction by providing entry-level workers with a great scale of employment opportunities and earnings higher than the national poverty line. Such a dynamic development of the industry entails great diversity in efficiency, even in comparison with the garment industry of other developing countries. The Knitwear industry of Bangladesh has global competitiveness in terms of product quality & price through industrial upgrading in terms of usage of latest machineries and vertical integration and industrial agglomeration.

Growth Structure & Future Projection about Knit Product: This recent robust growth is partly achieved owing to preferential support from the European Commission’s GSP & Relaxation of Rules of Origin (ROO) and the Duty Free Quota Free (DFQF) access granted by Canada, Australia, Japan and members of European Free Trade Agreement (EFTA). At the same time, the growth is also a consequence of favorable policies by the Government of Bangladesh, making it the most attractive sourcing hub in the world. Cashing in on this positive impetus, BKMEA has devised plan to diversify its export destinations to buffer against the contraction and budget-cut economic situation prevailing in the EU and beyond.

Table: Knitwear Export Growth of Bangladesh
Fiscal Year Knitwear Export
Value(in Million USD) Growth Rate (In %) CAGR Growth Rate (from 03-04 to 13-14; in %)
2003-04 2148.02 29.88  
2004-05 2819.47 31.26  
2005-06 3816.98 35.38  
2006-07 4553.60 19.30  
2007-08 5532.52 21.50  
2008-09 6429.00 16.20 16.97
2009-10 6483.29 0.84  
2010-11 9482.06 46.25  
2011-12 9486.39 0.05  
2012-13 10475.87 10.43  
2013-14 12049.81 15.02  
Source: ITC Trade Map & Export Promotion Bureau
Table: Performance of Bangladesh Knitwear Export
Table: Bangladesh Knitwear Industry: Vision for Future
Fact FY 2014-2015 Vision – 2021 Vision – 2050
Knitwear Export $13.25 Billion (Targted) $21.08 Billion $32.62 Billion
Growth of Knit (%) 15.6 20.9 32.1
Share in Apparel Export (%) 49.75 52.3 69.4
Share in National Export (%) 39.93 41.7 53.2
Share in GDP (%) 6.9 7.2 12.12
Employment Generation 1.6 Million 2.8 Million 4.9 Million
Female Empowerment (%) 45 52 67
Enhancement of Women Savings (%) 8.8 13.69 29.2
Poverty Reduction (%) 6.4 7.5 9.1
Banking & Insurance BDT 176 Billion BDT 187 Billion BDT 201 Billion
Shipping & Logistics Industry $79 Million $84 Million $ 91 Million
Forward & Backward Linkage Industry BDT 212 Million BDT 221 Million BDT 254 Million
Engineering Sector $10.1 Million $ 14.1 Million $ 19.4 Million
** Econometric forecasting methods: Autoregressive moving average with exogenous inputs (ARMAX), Forecast skill (SS) and Regression analysis

Made in Bangladesh”: Source of reliability and Trust: “Made in Bangladesh” garments are not only the major imported apparel items by USA, Canada and Europe from Bangladesh, but also these are acting as the “Image Ambassador” of the country and its people. It has helped to create a positive impression of Bangladesh. On a recent Board of Investment (BOI) statement, it is predicted that Bangladesh expects US$ 20 billion plus worth of investment within next few years from countries i.e Taiwan, India, Middle East and Far East besides direct investment from Europe and USA.  It has to be accepted here that the success story of Bangladesh’s RMG industry and its workforce plays a pivotal role in this conjecture!

The global economic crisis, if anything, has eventually boosted Bangladesh’s garment sector, as buyers worldwide have switched to less expensive garments—the so-called “Wal-Mart effect.” In addition, the ongoing rise in Chinese wages and currency has made Bangladesh a favorable investment destination.

Table: Top Ten Export Bundle of Bangladeshi Knitwear Products
Source: Export Promotion Bureau, EPB, Bangladesh
Table: Major Export Bundle (Product wise) of Bangladesh
T-shirt , Tank top and Singlet’s
Knitted Jacket, cardigans
Briefs, underwear’s and Panties
Pullover and sweatshirt
Babies Item

Fashion and Performance Apparel Development: The worldwide demand pattern for the Apparel product is changing at every single moment. The demand for technical and fashion product are increasing day by day.  On the other hand, the global smart fabrics and interactive textile market is expected to reach almost $2 billion by 2015. The markets will be driven by economic recovery pace, new product offerings and a rising degree of consumer confidence. Product innovation will partly concern new generation fibers, including hybrid materials and Nano-fibers.

To meet the world demand Bangladesh is innovating technical textile production technique, using latest technology, which ensures the better quality of the product/s. Besides, Bangladesh is using new high-tech fibers, which are more complex than traditional fibers for the production of different fashion products.

Table: Fashion items export of Bangladesh
Fashion Items

BKMEA Research and Development wing has been working on the development of new high-tech fabrics, fibers and new design and fashion products.  BKMEA Fashion Designing Institute is a real addition to this initiative and is expected to come into operation within the shortest span of time.

Performance Apparel Development: Bangladesh in the world Cup Bangladesh has supplied a considerable amount of Jerseys and Shorts for different Teams of the world Cup Football finals of The FIFA World Cup 2010 & 2014. This statement poignantly oozes the frisson of the capacity of Bangladesh Knitwear sector and authenticates the dependability and reliability that Bangladesh has been able to create across the globe.  Again Bangladesh supplies huge amount of sport items to the world recognized sportswear importers and retailers like PUMA, Adidas and NIKE.

Table: Sport and Performance product export of Bangladesh
Sports jersey and trousers

The worldwide market size of performance sportswear is currently estimated at US$ 6.40bn, which is upped by 19.4% over the last four years, and is expected to grow a further 18.75%, resulting in US$ 7.6bn by the end of 2014. According to the forecasting trends of performance apparel, sportswear will continue to grow faster for men than for women and most of the growth will be in North America, East Asia and Europe. With exclusive design pattern, skilled workforce, latest technology, available raw materials and huge experience, Bangladesh knitwear sector has closely eyed on this development and is delving into helping factories to be encouraged in performance apparels and grab the hugely potential markets in coming 5-10 years.

Top Buyers around the world and their dependency on Bangladeshi Knitwear items: Bangladesh textile garments sector has been expanded in vigorous way and maintained its maturity by holding 2nd position globally with 5% market share in Readymade Garments production and export.

Bangladesh has been successfully supplying apparel products consistently to the premier international fashion brands like H&M, C&A, M&S, Wal-Mart, GAP, Levi's, s. Oliver, Tesco, Zara, Carrefour, JC Penney and many more.

Supply capacity to produce cost-effective but Quality RMG products with over 5,500 factories employing about 4.5 million workers (of a total workforce of 80 million), Bangladesh is clearly ahead of other South-east Asian suppliers in this respect (Indonesia has about 2450 factories, Vietnam 2000, and Cambodia 260 factories).

International buyers/importers look for long-term apparel business ties in Bangladesh as the country has the potential to supply quality apparel items than any other countries of the world.

Favorable trade agreements:EU-GSP rules on duty-free imports of garments from Bangladesh have made sourcing from Bangladesh more attractive.

The capacity of Bangladesh knitwear industry has already been proved to be the most strongest in the world and the resilience of the sector also its crates confidence in the minds of the world importers, even at the times of adversity.

Competition to absorb the export share of world apparel market has reached fever pitch now. The gradual backpedaling of China on apparel export has created a vacuum in the apparel trade and the competitor countries of Bangladesh are striving their best to craft out their positions in the international markets. Bangladesh so has been in for a tougher rivalry amongst its competitors, but exerted its best effort so far to grab the bulk sum of what China is leaving out. Though it is not easy to grapple with the situation with dispatch and efficiency, yet we think, Bangladesh has probably turned the corner.

Table: Continent wise Product Demand of Bangladeshi Knitwear Product

Latin America

H&M doubling sourcing volume from Bangladesh: H&M, the Swedish retail giant for clothing is all set to double its annual outsourcing volume from Bangladesh to around $3 billion within the next five years. The recent visit of H&M CEO Karl-Johan Persson has revealed their interest to double their sourcing from Bangladesh, which is around $1.5 billion now.

C&A looking for long-term business ties: “Bangladesh is becoming more popular for its strong competitiveness as the other competing countries like China, Vietnam, India and Pakistan are facing higher costs of production” according to most of the international buyers. “RMG export of Bangladesh will remain unhurt for the next 15-20 years as the country has potential and as China is suffering from a shortage of workers and higher costs of production.”[Manager, German based C&A Company].

The company has increased its purchases to 20 percent. They have also added that every year the company would increases the volume of the orders from Bangladesh by at least 10 percent.

Same is the case with many other brands like Zara, GAP, TESCO, J C Penney, K Mart, UNIQLO, Kick, NKD, Aldi, Auchan, s-Oliver, American eagle, Street, and Primark etc. Some of them have already established their own offices in Bangladesh; others are sourcing through trading houses.

Table: List of top retailers and fashion brands importing from Bangladesh
Brand name
Brand name
H & M
C &A
Li Fung
G-Star Raw
JC Penney
K Mart
M & S
Charles Vögele


Table: List of top retailers and fashion brands importing from Bangladesh

Bangladesh: Sourcing Hub across the World Bangladesh is the land of very strong textile industries, quality garments industries and established buying hubs. Bangladesh knitwear industry has gained second place, leaving Turkey behind, in the global market. To ensure the sustainable development, we have established a healthy business environment & excellent standards for a close and mutually beneficial relationship among the manufacturers, exporters and importers in the process, ensuring a steady growth in the foreign exchange earnings of the country.

Bangladesh’s exporters are known for supplying good quality and large order sizes for the value and lower mid-market. They are now expanding into more value-added services. Starting from producing buttons, labels, apparel papers, threads, and all types of appliqué, embroideries, printings, fabrics, designs works, even services like dying, washing, ironing etc. are also performed in the Industrial areas of Bangladesh.

Competitiveness of Bangladesh Apparel Sector: The worldwide textile and clothing business are going through a major shift-- it is now more modernized, more dimensional and more vibrant. Also the global value chain for clothing trade integrates more rapidly than ever before! 

* Flexible functioning of the labor market is a positive factor for export competitiveness in Bangladesh.

* On average, labor markets in Bangladesh respond to productivity improvements and incentives and government interventions are comparatively minimal.

* This favorable endowment of labor and flexibility of the labor markets provide Bangladesh a great competitive edge on specializing in labor-intensive products, especially in the manufacturing sector.

* Bangladesh being the second largest apparel exporters is expected to play a major role in the global apparel market. 

* With three decades of experiences, supply of enthusiastic labors, huge number of entrepreneurs grown over the years, Bangladesh has established a structural competitiveness in the apparel industry, which is likely to sustain for the years to come as the economic structure of most developed countries has declined in last 5 decades

Since the LTA (long term agreement regarding international trade in cotton textile) came into force in 1962, (Source: Discussion paper no 5, WTO). 

Specific Advantages of Knitwear Sector of Bangladesh:

* Knitwear is a self-sufficient sector in all respects; currently the sector issupplying90% of the knit fabric requirements.

* Local yarn suppliers provide a large sum of yarn demand for the industry.

* Many garments have their own dyeing and finishing units.

* A separate dyeing and finishing industry also has grown up over the time to support the sector.

* More than 200 composite factories;

* Bangladeshi Knitwear is almost unbeatable in price advantages in the. world

* Bangladesh provides not only a cheap labor force, which is unbeatable but they are also peerless in stitching capability.

* Knitwear is exported to 153 countries of the world.

* Strong backward linkage facilities.

* Long experience of apparel business and a created value chain across the globe.

* More than 2000 knitwear factories.

However, Bangladeshi Knitwear Entrepreneurs are still working on development of the entrepreneurial skills, improving the existing productivity, developing the living standard of workers and providing them a green healthy working environment.  In this connection BKMEAgets into its stride & plays a catalytic role in amalgamating all these factories into a simple order and implementing those factors in the member factories.

Comparative Advantages of Bangladesh Knitwear Industry:


  • High quality diversified products.
  • Duty-free and quota-free access to the markets of several developed and developing countries, such as EU, Canada, Australian, Japan etc.
  • Strong backward linkage industry in the knit sector & growing capacity in the woven sector
  • Socially and environmentally compliant factories
    • - Child labor free factories
    • - Environmentally compliant ISO, BSCIS, WRAP, OKETEX etc. certified factories 
    • - Vertically integrated


  • Implementation of social compliance, fire safety mechanism in the factories.
  • Productivity campaign to ensure the best quality products.
  • Ensuring quality assessment process for the products-to-be-made.
  • Linkage the factories with environmentally and chemical sustainability program.
  • Adopting the Green factory mechanism for a sustainable industrial build-up.
  • Application of CPM (Clean production mechanism) into the factory production strategy.
  • Structural adjustment policies of the factories according to the demand of ILO, ACCORD, ALLIANCE & Other related international bodies.
  • Most factories being inspected by Bangladesh University of Technology and Engineering (BUET), thus ensuring structural safety for the importers of the world.

Endeavor of BKMEA: Greening the Knitwear Industry The worldwide trend of textile and clothing business and global value chain for clothing trade is now taking new shapes and forms almost daily. The current structure of world economic and social trend craves an era of innovation, diversification, sustainable growth & Development. Novelty in trends and fashions, modification in designs & colors also the comfort tastes have been adding new dimension in international apparel world.

It is estimated that adopting sustainable business practices to manufacture goods in conformity with the natural environment will surely pave the way to the future of Bangladesh apparel industry in the 21st century. The entrepreneurs are, therefore, thinking of eco-friendly factories in their business planning & applications and BKMEA is asserting more emphasis on these issues to be exerted in appropriate manner in the factories.

To pace with the demand of today’s reality in apparel sector, BKMEA has been in effort to introduce Chemical safety management specially Zero Discharge of Hazardous Chemical (ZDHC), Globally Harmonize System (GHS), Restricted Substance List (RSL) into the factories and reduce carbon emission with a view to promote environment-friendly green concepts among entrepreneurs. We also motivate them to adopt energy-efficient technologies and resource-efficient production technologies.

Our mission is to make the Bangladesh Knitwear industry a chemically and environmentally sustainable sector through the passage of time, which must be green, sound, eco-friendly at the same time!

BKMEA’s inherent transformation from an Association into an Organization: Organization is a structure of people with well-defined roles and functions whereas an association is a group of people with common interests. BKMEA was formed as a trade association to facilitate and promote knitwear business. It previously worked to create a common platform for the entrepreneurs from which they could move for their common interest. To cater the demand generated from the changing apparel global value chain, BKMEA has been matured into the level and heightof a world class organization.

BKMEA has given highest priority in the specialization of resources.

BKMEA has adopted Division of labor in the workforce to materialize the future endeavor. It has set forth Vision-2021 with a view to exporting $21 billion export by 2021. Different cells under BKMEA have grabbed the vision and started working accordingly.

Professional business bodies are basically involved in the development and monitoring of professional business programs, and the updating of skills, and thus perform professional certification to indicate that a person possesses qualifications in the subject area. Sometimes membership of a professional business body is synonymous with certification, though not always. Membership of a professional body, as a legal requirement, can in some professions form the primary formal basis for gaining entry to and setting up business venture.

BKMEA now plays role in policy-making process, framing sector-support rules, market expansion program, research initiatives, productivity campaign, making green and environmentally-friendly industrial belt etc. These initiatives vindicate how BKMEA has matured into an international organization from its primary tag of an Association.

Research Based Policy Suggestion: It is often assumed that if our values do not enter into our research, it is objective and above criticism. Objectivity is therefore defined as the basic conviction that there is or must be some permanent, a historical matrix or framework to which we can ultimately appeal in determining the nature of rationality, knowledge, truth, reality, goodness or rightness. (Bernstein 1983:8), the old adage “A Problem well-defined is a problem half-solved’ holds strong even today. Proper definition of a research problem is an important prerequisite for any research study. Often, the formulation of a problem holds more significance than its solution. The manner in which the problem is defined decides the direction for the entire research.

BKMEA, the sole representative of Bangladesh Knitwear sector, has delved into finding shortcomings and potentials for the sector, which in long term will strengthen the very fiber of the sector. Research is an analytical process that brings out step by step a logical solution to a problem. We believe, as apparel business has become internationalized and extremely competitive, we have got to look out for pitfalls and address them accordingly to program, under which we will be doing some groundbreaking and suitable research analysis that will come in handy for formulating policy and strategy. We want that all policies be made on reality and facts rather than understanding and guess.

New Market Expansion: The international textile and garment industry has undergone several shifts in production and marketing since the 1950s. The first shift occurred in the 1950s and early 1960s when production moved from North America and Western Europe to Japan. The second supply shift was from Japan to the Asian-newly-industrialized economics (NIEs)-Hong Kong, Taiwan, South Korea and Singapore- and this permitted the latter group to dominate global textile and garment exports in the 1970s and 1980s.

Over the past 10 to 15 years, there has been a third shift as production within Asia has moved from the NIEs to China and South East and South Asian exporters as exports from non-Asian countries, in particular control America, the Caribbean, Eastern Europe and North Africa, have increased substantially. These production shifts have been influenced by a range of factors, including the distortions in international trade arising from MFA quota system and labor cost differentials.

At the beginning of 2010s, Bangladesh Knitwear Sector has been able to export knit items to more than 145 countries with significant volume because of efficient planning and proper implementation. But a myriad of changes in the economic, technological, social and political equilibriums, the 2008 Financial Crisis, Europe’s sovereign-debt crisis, slowing down of key global economies have reshaped the world structure of global manufacturing chain.

Again, the present scenario and the emerging trends are strongly indicating that by the end of the first quarter of this century, the major share of apparel market is expected to happen in China, India, Brazil, Russia and other countries where the growth of per capita spend on apparel will be higher than the growth of the developed economy. In the meantime, the per capita spend on apparel in USA and Europe will rise at a much slower rate.

Despite the prolong debt crisis in EU and USA – the main two export destinations of Bangladesh, raising export to emerging markets neutralized the adverse export growth in the main two destinations. The success resulted in market diversification, which was not automatic rather interventional. This achievement is primarily down to a numbers of attempts taken by BKMEA during last three/four years with a view to trade expansion and facilitation.

In order to safeguard the sector from the wave of global recession, BKMEA’s strategy was to sustain in the main export destinations as well as explore more emerging countries for further sustainable growth rate. Finally at least seven countries had been identified based on economic indicators and named them as JBM-RCKS, which are Japan, Brazil, Mexico, Russia, China, Korea (South) and South Africa.

Targeting these markets, BKMEA has been attempting to strengthen bilateral trade relations through scoping mission, fair arrangement, buyers’ visit, and finally branding Bangladesh. These prudent initiatives fabricate immense possibilities for Bangladesh knitwear in those markets. The recent trade experiences validate the argument showing a surprising double digit export growth rate in these markets in the last fiscal year.

The new emerging markets are Australia, Japan, China, Russia, South Africa, Korea, India, Brazil, Chile, Mexico and Turkey and these countries herald great potentials in terms of export of Bangladesh Knitwear products. According to sources, rise in export to markets such as Australia, Japan, Russia and Brazil are highly encouraging.

The Russian market appeared particularly prospective with the highest growth of Bangladesh's RMG exports at $132.82 million, a commendable increase by more than 81 per cent in just a year.

In fact, exports to the new markets have been picking up over the recent years, amounting to an aggregate growth of $2.31 billion since 2008. This has been the outcome of ceaseless exploration of alternative markets of BKMEA in the wake of global downturn in general and the Euro zone crisis in particular.

Knitwear Import from Bangladesh(in 2013)
Knit Import from World (in 2013)
% Market Share of BD
South Africa

Source: International Trade Map

Non-traditional markets could be more promising destinations for the Bangladeshi exporters and it could help the sector to be recovered from the bad patch in the traditional markets like the US, Europe and Canada. In this scenario, Bangladesh garment industry is well placed to withstand the increase in competition in its export markets. 

Global Buyers’ Information Directory: Adapting to the global knit demand and thrive in a changing market nature is the ultimate objective of every entrepreneur in any sector. BKMEA with its Research & Development wing has published a mammoth 2100 pages book named “Global Buyers’ Information Directory”, where relevant buyer’s information, tariff structure, product values, economic situation have been accommodated to grab the opportunities of market expansion in upcoming days.

The “Global Buyers’ Information Directory” of BKMEA at a glance:

  • The 2100 pages book has more than 25,000 RMG buyers’/importers” information of 160 countries of the world.  
  • The tariff, non-tariff and Para-tariff barriers for exporting RMG products
  • The price scenarios of competitive countries on RMG products
  • The import structures of those 160 countries in 2013-14
  • The top ten (10) imported RMG products by 160 countries
  • Air and sea route cost-structure for transportation of goods
  • The potential economies of the world that would flourish during 2015-2020
  • List of top 50 buyers/importers of the world


Product Diversification: Initially the product base of Bangladesh Knitwear was small. But after 1999, this sector has flourished at a rapid scale. With the pace of the development, the product categories have been diversified. Now Bangladesh can supply any kinds of products demanded by world class brand retailers. BKMEA has undertaken different initiatives to diversify the product base. It has arranged single country trade fair in the targeted countries to understand the taste and pattern of the knit products. It has also participated in many trade fairs and fashion shows across the world. BKMEA has facilitated product diversification activities taken by the member factories and has instructed the member factories  to be attuned to product diversifications process so that they can cope up with the immense demand that they would be thrown to in the days to come. We have also familiarized our factories with changing patterns in design, art and fashion in the products.

Institute of Apparel Research & Technology (iART): Due to highly competitive market for the apparel products globally, the price and quality of the product, lead time and compliance as well as the wage, living standard, security and safe working environment are the main concerns of the buyers of apparel products. Besides, our sector still requires enhanced efficiency and productivity in order to remain competitive in the global market. Accordingly, in order to cater the research and development need of the Bangladesh apparel sector, BKMEA took the first innovative initiative to establish a separate apparel research institute, the Institute of Apparel Research & Technology (iART) in 2008.BKMEA, through the Institute of Apparel Research & Technology (iART), has initiated different training courses to create factory-based skilled workers for the knitwear sector of Bangladesh. The institute is expected to deliver skilled workforce for the sector side by side professional training for the industrialists, owners, top, mid and entry level officers of the factories by which the factory administrative and industrial chain become more effective, result-oriented and professional.

Research and Development: High female participation rates, as argued above, effectively result in lower wages and greater competition as evidenced by the size of the export market. As a result, in the knitwear sector female participation is higher. Currently the industry employs about four million workers, of whom 90% are women and total garment product exports account for 76% of all exports (Wikipedia, 2012).

Bangladesh Knitwear Sector: Macro contribution to the Economy: Bangladesh’s RMG sector contribution in terms of GDP is highly remarkable; it has reached 13 percent of GDP, which was only about 3 percent in 1991. The contribution of Bangladesh Knitwear sector on GDP is 6.92% and the backward linkage sector has another 2% contribution on GDP of Bangladesh. It also plays a pivotal role in promoting the development of other key sectors of the economy like banking, insurance, shipping & Logistic industries, etc.

High female participation rates, as argued above, effectively result in lower wages and greater competition as evidenced by the size of the export market. As a result, in the knitwear sector female participation is higher. Currently the industry employs about four million workers, of whom 90% are women and total garment product exports account for 76% of all exports (Wikipedia, 2012).

Bangladesh Knitwear Sector: Macro contribution to the Economy: Bangladesh’s RMG sector contribution in terms of GDP is highly remarkable; it has reached 13 percent of GDP, which was only about 3 percent in 1991. The contribution of Bangladesh Knitwear sector on GDP is 6.92% and the backward linkage sector has another 2% contribution on GDP of Bangladesh. It also plays a pivotal role in promoting the development of other key sectors of the economy like banking, insurance, shipping & Logistic industries, etc.

Productivity Improvement Campaign: Productivity Improvement Cell (PIC) is working at BKMEA member factories using the modern production system ‘Lean Manufacturing Method’, which endows very significant impact on the productivity level of the factories. Improvement range of this system varies from 20% to 90% depending on key performance indicators (KPI) e.g. cost, lead time, labor productivity, quality status and space utilization. Lean emphasizes on continuous improvement with proper utilization of existing resources of a factory. All training and awareness-raising sessions associated with this program are being conducted to ensure sustainable development and enhanced competitiveness of the factories. PIC team also works on fabric optimization, industrial and planning engineering, factory ergonomics etc.

Ensuring Social Compliance Standard: World Market is committed to ethical and responsible conduct in all of our operations and so, we have put special attention on respect for the rights of all individuals and respect for the environment. We are dedicated to upholding the human rights of all workers involved in our product supply chains. We consider fair labor practices to be an important part of human rights. Our goal is to ensure that all individuals involved in our supply chains experience safe, fair and non-discriminatory working conditions.

Fair wages and benefits are providing in compliance with laws of the country including those relating to minimum wages, overtime, maximum hours, piece rates, benefits, and other elements of compensation. Buyer/importers from different parts of the world audit our factories to monitor and evaluate their compliance with our standards for working conditions and human rights, including prohibition on forced labor in any form.

Along with these issues mentioned above, BKMEA has formed a 22-member competent compliance team to monitor compliance status of member factories on a regular basis. The monitoring process has been going on since early 2007 using a four- graded checklist based on ‘National Labor Law 2013’ and basic requirements of the importers.

Fire and Structural Safety: BKMEA Fire Safety Cell provides training courses to enable attendees to meet the requirements of factory fire safety. The training course is tailored to the specific risks of Fire Safety and Risk Assessment and best practices in Bangladesh garments industry. Its primary object is to minimize the risk of fires at workplace and to make sure all employers and employees get aware of appropriate actions to be taken in the event of a fire. BKMEA fire safety cell frequently checks fire and workplace safety issues of factories and conducts fire safety training & drill on regular basis. To make all aware of fire risk, BKMEA has published awareness-rising poster, sticker, and leaflet on fire safety issues and distributed these to the member factories. BKMEA is always committed to ensure structural safety in knitwear factories of Bangladesh.

Structural safety: In the rush to meet export demands, many knitwear factories have been set up in buildings unsuitable for industrial purposes. Some of them struggle to cope with the heavy load of sewing machines, fabric and large numbers of workers etc. Dedicated Structural Engineering team of BKMEA deals with structural aspects of the factories and provides them policy support on how to grapple with the problems.

Chemical and Environmental Sustainability: Bangladesh has gone long forward in becoming a leader in social and economic arena, but in regards to environmental and chemical sustainability for a sound industrial atmosphere, we still focus on thriving towards center of excellence. Environmental and chemical sustainability is going to be a core component of sustainable process in industrial management in the days to come in Bangladesh. So, BKMEA is now advocating a Chemical & environmentally sustainable Bangladesh Knitwear industry.

BKMEA believes in educating the existing factory manpower about the sustainability of environment and chemical management. Numerous publications on the issues of environment and chemical sustainability and safety management have been published regularly to update its member factories. No sustainable development lingers last without training-based education along with the practical demonstration that assists the factories to have better understanding of environmental and chemical safety issues. BKMEA has started providing consultancy services to its member factories on chemical management system, ETP and cleaner production management (CPM).

Green Factory Production: Bangladesh RMG sector is continuously updating itself with the global trend. However, it has not been mature as an industry to comply with greener production mechanism. But, as we embrace innovation in our ways to development, we can’t stay aloof from this much-coined issue. BKMEA has done great job in areas like product quality, workers welfare, social compliance, technological progress, market research etc. Now it is thriving to become green in the production process. Already we have seen some solid developments in this respect. Many entrepreneurs are in the process of developing green factories. This is happening because we are working to have a sustainable knitwear industry. We are focusing on mainly four points: a) reducing harmful emissions, b) improving energy efficiency, c) recycling byproduct, and d) improving waste management. As the consumers are very much comfortable with the environment friendly products, the immediate result of this imitative would be huge amount of orders from buyers.

Apart from this, we also think to save our eco-system for the greater interest of the mankind. At this juncture, eco-friendly factory or green factory can be a mainstream solution by which we could reduce co2 emission in energy production and enhance green efficiency of products.

Clean production Mechanism: Cleaner Production Mechanism is one of the most important steps towards sustainability. At the same time health and environmental impacts on plant workers and the surrounding community are reduced. Cleaner Production Mechanism focuses on three main issues: water and energy conservation, optimization of chemical usage and process or equipment modification. BKMEA has realized the need of good environmental management and started working on it few years back. The entrepreneurs start investing to improve the environmental performance of products, processes and services by focusing on the causes of environmental problems rather than the symptoms. In this way, it is different to the traditional ‘pollution control’ approach to environmental management. Where pollution control is an after-the-event, ‘react and treat’ approach, Cleaner Production reflects a proactive, ‘anticipate and prevent’ philosophy. BKMEA is going to take on a crash program within short time on CPM.

Dynamics of Bangladesh Knitwear Sector: Socio-Economic Development: Bangladesh Knitwear sector contributes to the Bangladesh economy in a distinctive manner. The last 20 years witnessed unparalleled growth in this sector, which is also the largest exporting industry in Bangladesh. It has attained top notch stance in terms of foreign exchange earnings, exports, industrialization and contribution to GDP within a short span of time. The industry plays a significant role in employment generation, women empowerment, poverty reduction, health and Nutrition improvement etc.   Let’ have a look at the social contributing factors that are the direct results of Bangladesh knitwear sector.

Women’s Empowerment: It is well recognized that women’s participation in income generation activities lends them a better status within the family and provides them with considerable freedom. A job ensures equitable access to household resources (nutrition) and larger investment on female human capital (health and education). Expansion of women’s employment has contributed positively to the improvement of the savings behavior of the poor people since women tend to be better savers.

Employment in the Knitwear industry has provided direct access to cash income for the first time to many poor women. A survey, conducted by the Institute of Business Administration (IBA) in 2012 showed that for 86 percent of the female workers in the non-EPZ areas, work in the garment industry was the maiden wage employment. The survey also showed that women were taking up such roles paying for house rents and schooling expenses for their children or brothers and sisters. Surprisingly the female garment workers were spending the same amount as the male workers on the studies of their family members. The same survey further showed that female workers were spending their earnings on their marriage, thus taking a big burden off their families. The independent earnings also allow these women to have a greater share in household decision making. Evidently, wage work at the Knitwear industry has empowered women and improved their status. Most significant change has been occurred in the empowerment of women. Now women can play important role in making decisions by their own.

Poverty Reduction: RMG sector now provides employment to about 4 million people, accounts for one-thirds of manufacturing investment and is responsible for three-fourths of export earnings. It has been observed that out of 9.0 percentage point reduction in head-count poverty during 2000-2005, 2.5 percentage point reduction could be adduced to growth of RMG sector. The knitwear export growth has also a positive impact on service sector. The service sector has created huge job opportunity for the people. All these, amongst others, have positive impacts in reducing poverty and have resulted in change. The estimated poverty headcount ratio for 2014 is 24.7 (GED Estimate) percent. Bangladesh has already met one of the indicators of target 1 of MDGs by bringing down the poverty gap ratio against 2015 target of 8.0.

Employment Generation: The effective way to reduce the poverty level is to create employment opportunities for the impoverished people. Bangladesh Knitwear Industry has played important role by creating employment opportunities for the poor and uneducated people who were previously engaged with the traditional agriculture sector. BKMEA has set up a training institute and developed different short, medium and long term courses on different issues related with knitwear production. Thousands of workers and mid-level management have got training from BKMEA. Many fresh graduates have already taken trainings from the institute and joined in the knitwear factories. The immediate result of rising knitwear sector translated into rapid urbanization. So far the industry creates 1.6 million direct jobs and 0.5 million indirect jobs.

Purchasing Power Increment: The export of knitwear has increased leaving a huge impact on the purchasing power capacity, particularly for rural female. The purchasing power of the low income people has increased significantly. The product basket under their capacity has been expanded considerably compared to the past. Now People can afford more goods than before. This happens because the income level has increased considerably. The purchasing power of the garment workers has been increased significantly compared to the scenario back in 1980s and 1990s.

Improvement in health sector: Bangladesh has made significant progress in providing health services. Awareness about heath has increased among People. Knitwear sector of Bangladesh provided directly about 2 million employment facilities and another 1.5 million indirectly, which improves the income level as well as the purchasing power of those people.  Access to medicine and access to registered doctor have increased significantly. Calorie intake of the workers has increased considerably.  According to Bangladesh Maternal Mortality Survey (BMMS), maternal mortality has declined from 322 in 2001 to 194 in 2010, a 40 percent decline in nine years. Child mortality rate has been reduced to a satisfactory level. According to Bangladesh Demographic and Health Survey (BDHS) 2011 (NIPORT 2013), 31.7 percent of births in Bangladesh are attended by medically trained personnel, e.g., a qualifi­ed doctor, nurse, midwife, family welfare visitor (FWV), or community skilled birth attendant (CSBA). BKMEA has set up a hospital for the better treatment of the workers. BKMEA also strictly monitors the member factories so that each factory provides medical services to the workers.

Structural & Social Development: The Knitwear industry is contributing in a number ways to the Bangladesh national economy in poverty alleviation programs and has helped create an awareness of women's issues at all levels. In addition to its economic contribution, the expansion of the RMG industry has caused noticeable social changes by bringing more than 2.92 million women into the work force.

In 1980, estimates show around 50,000 female garment workers in this sector (World Bank, 2008). According to Bhattacharya and Rahman, the number of people employed in the apparel sector had increased to more than 1.5 million in 1997-98, which constitutes about 70% of the total female employment in the country's manufacturing sector (Bhattacharya and Rahman, 1999). Currently the industry employs about 4.5 million workers, of whom 90% are women, mostly from rural areas.

Table: Female employment in South Asia Garment Industry
No. of Workers
% female
% of total Exports
4.1 million
Sri Lanka
5.3 million

High female participation rates, as argued above, effectively result in lower wages and greater competition as evidenced by the size of the export market. As a result, in the knitwear sector female participation is higher. Currently the industry employs about four million workers, of whom 90% are women and total garment product exports account for 76% of all exports (Wikipedia, 2012).

Bangladesh Knitwear Sector: Macro contribution to the Economy: Bangladesh’s RMG sector contribution in terms of GDP is highly remarkable; it has reached 13 percent of GDP, which was only about 3 percent in 1991. The contribution of Bangladesh Knitwear sector on GDP is 6.92% and the backward linkage sector has another 2% contribution on GDP of Bangladesh. It also plays a pivotal role in promoting the development of other key sectors of the economy like banking, insurance, shipping & Logistic industries, etc.

Robust Economic Growth: Bangladesh has posted a robust and resilient economic performance over the past decade, accompanied by a sustained decline in poverty. This robust growth was accompanied by a uniform and steady decline in poverty headcount rates between 2000 (48.9 percent) and 2014 (24.7 percent), and a continuous decline in the number of poor people—from nearly 63 million in 2000 to 31 million in 2013, despite a growing population. This has reflected in the country’s economic performance.

Table: Contribution of RMG sector on Export growth rate of Bangladesh
Growth rate of RMG (in %)
Growth rate of Non-RMG (in %)
Export growth rate (in %)
GDP growth rate(in %)

Sources: Export Promotion Bureau; computed by iART team

The growth of Bangladesh economy is led by the growth of RMG sector of Bangladesh during last five years. The contribution of RMG sector export on annual export of Bangladesh was almost 80 percent.

Value Addition from Knitwear industry: In Bangladesh, normally the knitwear production process starts from cotton. Then the next processes are done in our country. We are to import 98% of our required cotton from foreign countries- the only impediment to become a vertically integrated knitwear industry. Bangladesh knitwear industry is playing a vital role in value addition of Gross Domestic Product (GDP).

Table: Value Addition and Net Retention Rate of Bangladesh Knitwear Sector
Value Addition
Net Retention

The domestic value addition in this sector is about 75%, which is much higher than woven products. The Knitwear sector’s value addition contribution in the GDP is about 10%. In the export field, the knitwear industry of Bangladesh has managed to make a big name across the world. BKMEA has taken different initiatives to promote the export growth of knitwear products. BKMEA is working to incorporate the latest technology, which in turn will increase the domestic value addition.

Backward linkage Development: The core strength of the knitwear sector is its backward linkage. The entrepreneurs of the sector have not only increased their stitching capacity overtime, but also invested in the allied industry to augment the overall capacity of the total sector with the same pace. Over the period of time, knitwear sector gradually became almost self-sufficient in fabric and yarn development. This improvement has become possible because of the integrated growth of spinning factories in line of the growth of country's stitching capacity and increased need of the yarn and fabric. As the export has increased in the knitwear sector, the capacity of backward linkage has also increased accordingly. The result is local suppliers can provide now 95% of the total fabric requirement of the sector (source: BTMA). The growth of spinning mills is also stepped with the growth of knitwear exports. In 2010-11, total number of Yarn Manufacturing Member Mills was 383, whereas Fabric Manufacturer Member Mills was 743. But Now a days, there are more than 500 Yarn Manufactures Mills in Bangladesh. As of now, the total investment in the backward linkage in knitting, dyeing and spinning industry is more than US$ 5.03 billion or € 4.00 billion.

In 2013-14, the contribution of knitwear in national export earnings is 39.81%. The Direct contribution of Knitwear sector on GDP of Bangladesh is almost 7%, but the backward linkage sector of Knitwear sector has another 2% contribution on GDP.

This has resulted because of the backward linkage industry that has grown over time which helped the knitwear sector to have the higher value addition and therefore a much higher net retention rate.

Shipping and Logistics Industry Development: The RMG sector has contributed to the expansion of the shipping business in Bangladesh and stimulated setting up of several container yards, expansion of port facilities to handle large container carrying trains, increase of cargo handling and storage facilities. RMG manufacturers also extensively use services of Clearing & Forwarding Agents for the purpose of customs clearance of inputs and finished goods.
It is estimated that port usage fees earned from the RMG sector account for more than 40% of the income of the port authority. RMG sector contributed about US$79 million in FY2014 to earnings of the Shipping& logistic business of the country by way of port charges, C&F Agent’s commissions, freight charges, forwarding charges etc. The prediction about RMG sector contribution to the Shipping and logistic industry will increase at $84 million in 2021 and at $91 million in 2050. 

Development of Banking and Insurance Sector: Development of Bangladesh knitwear sector and the related activities has contributed a lot to the robust growth of the financial sector in Bangladesh. In FY 2002, the banking sector earned about 37 million dollars from business related with the RMG sector in the form of interest and charges and L/C charges. More than one-tenth of the commercial banks’ asset portfolio belongs to the RMG and textile sector in the country. In FY 2001 commercial banks lent Taka 4400 crore to the textile sector, while the amount lent to the woven-RMG sector was Taka 812 crore. The export financing business of the commercial banks is largely dependent on the textile and RMG sectors.
After the phase out MFA’s the RMG sector of Bangladesh expanded dramatically and reached at peak during last 5 years. The number of RMG factories rises dramatically from 2000 to about 5000. The export of RMG product increased sharply with an average growth rate of 19% over last 15 years. In the meantime the L/C for export and back to back L/C for raw materials import also risen equivalently, which had a positive impact on improvement of profit making condition of commercial bank.   
Besides, the expansion of readymade factories creates the demand for capital machineries also the industrial raw materials. So the settlement for import L/C of industrial machineries increased sharply which rises the lending from the bank, which maximized the profit of Bank. A World Bank survey revealed that almost all firms (98%) are the clients of the commercial banks for working capital and procurement of machines and equipment (57%).
The RMG sector has also contributed to the growth of the country’s insurance sector. On average, every year the premium paid by the RMG sector to the insurance companies was about 6 million dollars. All firms have their machines and plants insured and, additionally, 87% of importers of input and 45% of the RMG exporters get their imports/exports insured. In 2014, the earning of Bank and Insurance companies from the Knitwear sector of Bangladesh was about BDT 176 Billion, which will rise at 187 billion BDT in 2021 also 201 billion BDT in 2050.

Cosmetic Industry Development: There is a significant growth of female employment in the RMG sector of Bangladesh; one of the higher female labor markets within the Asia region. The demand for cosmetic products like Color cosmetics, that includes lipstick, nail polish, eye and cheek shades and Personal care products, that includes skin and hair care products, like shampoo, conditioner, lotions, Beauty soap and creams are increasing day by day. As the RMG sector has a great contribution in income generation of women workers, the demand for cosmetics items have grown significantly. In monetary term the value is about 28 million USD.

Future Prediction and Strength of Bangladesh Knitwear Industry: Bangladesh is becoming more and more significant for the apparel retailers and fashion brands worldwide as the country is consistently providing the C&M service at the most competitive price with maintaining acceptable quality standards. Commitment, competitive price and high quality of products are the main driving forces behind the rise in exports of garment items to the new destinations.
Besides other competing countries of Bangladesh like China, Vietnam, India and Pakistan are facing higher costs of production; Bangladesh is becoming more popular with the buyers for affordable prices of garment items.
Again the forecasting through the Autoregressive Moving Average with Exogenous Inputs (ARMAX) shows that Bangladesh will be the Giant Knitwear exporters with a value of 32.62 billion USD, at a growth rate of 32.1%. Also the contribution of Knitwear sector to the GDP will be 12.12% by the year of 2050.

Bangladesh: Leading sourcing Destination: Bangladesh is being considered as the next hotspot for RMG as the “country’s ready-made-garment industry has identified solid apparel-sourcing opportunities there”. The top hotspots indicated by CPOs are Bangladesh, Vietnam, Indonesia and Cambodia. McKinsey forecasts export-value growth of 7 to 9 per cent annually within the next ten years, suggesting the market will be double by 2015 and nearly tripled by 2020.

A survey result has also revealed that European and US companies that focus on the apparel market’s value segment plan to expand the share of their sourcing from Bangladesh to 25 to 30 per cent by 2020, from an average of 20 per cent now.

Bangladesh: Prospecting Alternative of China: Bangladesh’s apparel industry is likely to get a big boost as the world’s largest textile producer. China and it Chinese apparel makers and top global retailers have started shifting their orders to Bangladesh due to the rising labor cost in that country. Vancl, China’s largest online apparel retailer, shifted some orders to Bangladeshi textile makers late last year in an effort to cut the labor cost in the context of China’s rapidly rising production costs.

Besides, the European popular retailer H&M has also shifted some orders to Bangladesh from China because of the fast rising labor cost there. The Beijing Business Today, a Chinese daily, reported that the Vancl would continue shifting orders to the manufacturers in Bangladesh.  This year also, the Vancl would shift a portion of its orders for casual pants to Bangladesh and it has begun experimenting with foreign production of sweaters and down-jackets from 2013.

Last year China raised its minimum labour cost by 23 per cent putting the local and foreign garment manufacturers under pressure and forcing them to focus on the countries like Vietnam, Cambodia, Sri Lanka and Bangladesh, where the labour costs are low. It is a piece of good news for Bangladesh.

Since China is switching over to the higher segment of the market and also the hi-tech industry, the country will need to import garment products. Bangladesh is ready to seize the opportunity to export into China.

Sourcing Decision: Bangladesh Top ChoiceRetailers are betting on Bangladesh’s garment industry more than that of any other country in the coming years, Wall Street Journal reported. Bangladesh’s $20 billion garment business came out ahead of smaller rivals Vietnam and Cambodia in the ranking of countries with the highest potential for future sourcing, according to a new study by consulting firm McKinsey &Co. “Bangladesh is going to be No. 1,” recent study shows.

Picture: Large share of their sourcing value away from China to other countries over the next 5 years, Compiled by KMPG Report-2013, McKinsey’s apparel CPO survey 2013 & World Bank.

The new research shows that production capacity and price appear to trump safety and labor issues when it comes to choosing where to source clothes from. The minimum wage structure and high number of garment factories in Bangladesh have made the country a magnet for global retailers. Though Importers have formed safety pacts aimed at improving working conditions, but this also has helped improve its image. As it Clothing makers from around the globe are now planning to increase their reliance on Bangladesh in the future.

For now, China remains the world's largest garment producer by far, with more than $150 billion in annual exports. But its minimum wage is three times the $68 monthly base rate of Bangladesh. Bangladesh is tied with Italy for the No. 2 spot for current exports; Italy is historically a major producer of fashion and accessories, but is declining in consideration of importance.

Bangladesh will be able to export US$ 1.0 billion worth of RMG to China within a few years. There will be demand of US$ 650 billion in the global clothing and apparel market by 2020, where there is a scope for Bangladesh to contribute $44.56 billion. China is an untapped opportunity for Bangladesh and at the same time Bangladeshis a lucrative destination for Chinese consumers as we sell at  10 to 15 per cent lower price due to duty-free access facility.

Other reasons behind the top retailers’ interest in Bangladesh Knitwear are availability of skilled labour, utility service at lower price, convenience of duty-free custom bonded warehouse, improved GSP advantages under regional cumulative, simplification of tariff regime, meeting world standard on social compliance issues, easily accessible infrastructure like sea road, railroad, river and air communication etc.

Conclusion: Today's greater challenge involves rethinking business models, taking on new mission responsibilities, and evolving management and governance approaches. BKMEA collaborates with factories and their industrial structure to transform the way they do business across the globe. As large and complex systems of international apparel trade change time to time, these factories must maintain oversight of the work they do, stay within budget, and deliver effective and international standard products. This is particularly important when integrating new and existing systems into a seamless whole. That is where BKMEA, as an Organization, is different from others and has been in relentless effort to keep all entrepreneurs engaged to the modern development of international apparel business.

Bangladesh exports 35 types of garment products to about 152 countries around the world. The RMG sector is a 100% export-oriented industry. Given the remarkable entrepreneurial initiatives and the dedication of its workforce, Bangladesh can look forward to increasing its share of the global RMG market. This beckons creating millions of jobs in a country like Bangladesh and millions of customers worldwide. There is enough goodwill for the workers and people of Bangladesh to ensure that.

These all facts & figures boil down to the reality that in the coming days. Bangladesh is going to lead the world in exporting RMG. A glorious future is, indeed, beckoning!  Reasonably, BKMEA has its own motto: “Working today to shine tomorrow”, which poignantly reflects how we (Bangladesh) intend to reign supreme in the international markets in the days ahead.

So, vision is in hand and we must make it happen!