Garment production - why the rise in manufacturing from Bangladesh ?

Bangladesh's exports to India will reach at least $1 billion by the end of 2011 as India now find several of its neighbour's products attractive, a business leader said recently.

Bangladesh has garnered more market share than India in garment exports to the US, the largest importer of garments. Recession has hit retailers globally and the US and Europe are increasing their purchases from Bangladesh as it is able to supply quality garments at a relatively less price due to low labour cost and better economies of scale, experts said.

Data collected by the Apparel Export Promotion Council, the body for the promotion and facilitation of garment-manufacturing and their exports, show Bangladesh overtook India after August 2008. Bangladesh's share increased by 10 per cent, India's share went down by 3 per cent in the US market in the same time period.
Bangladesh has now taken the fifth position, which was previously occupied by India, in the list of largest garment-exporting countries to the US, pushing India to the sixth position.
Though China has always been a competition for Indian exporters and it continues to remain the largest supplier to both the US and Europe, it is the countries like Bangladesh that have started taking over India.

"On an average, Bangladesh has larger factories than India and they are more productive and have low labour cost, which is helping them in attracting buyers from the US and Europe," said Devangshu Dutta, chief executive officer of 3rd Eyesight, a consultancy firm. Since customers have started avoiding China due to labour problems and the high cost of production there, the business has shifted to alternative sources like Bangladesh as they are more competitive, productive and deal in large volumes, added Dutta.

India's labour rates are 129 per cent higher than that of Bangladesh. While the labour cost in India is 62 US cents per hour, it is merely 27 cents in Bangladesh, according to AEPC. Bangladesh is the only country which can produce quality textile clothing at least 20-30 percent cheaper than China. Clothing Manufacturing Association of India president Rahul Mehta said orders for the next season were not coming and it would be very difficult for India to catch up with Bangladesh unless right kind of policies were put in place.

The one thing that remains essential is that all factories should be closely assessed to ensure that ethical standards are met. A key objective for buyers being to protect the reputation of their brand.

If you require impartial advice on where to source apparel garments contact lorna@uni-garms.com for more information.