Bangladesh has the potential to grab a 12% stake in the global man-made fibre-based apparel market that will reach $375 billion by 2030, mainly cashing in on China's declining share, Dr MA Razzaque, chairman of the Research and Policy Integration for Development (RAPID), says.
Apart from offering necessary policy incentives, for this, the government will also have to invest $25-30 billion more in developing a strong backward linkage, he also said in a workshop on "Man-made fibre for moving up the value chain of RMG in the context of LDC Graduation" on Tuesday.
The Support to Sustainable Graduation Project of the Economic Relations Division (ERD) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) jointly organised the event in the capital.
Dr MA Razzaque also thinks Bangladesh's cotton exports will rise to 20% of the $250 billion international market, considering the current growth trend over the last decade.
In this way, the country's total apparel export will hit the $95 billion mark by 2030 with a massive jump from around $42 billion recorded in FY22. In 2030, the global market is projected to reach $625 billion.
Stating that man-made fibre clothing may drive the country's future export growth, Dr MA Razzaque recommended bringing in foreign investments in man-made textiles and apparels to turn the country into a regional supply hub of such non-cotton products.
Increased use of man-made fibre will enable Bangladesh's readymade garment sector to diversify its products and move up the value chain as the sector prepares for the post-LDC graduation scenario, he pointed out.
The global apparel market was $440 billion in 2021, of which man-made fibre apparel's value amounted to $222 billion and cotton apparel value was $190 billion, which is 42% of the global apparel market.
On the other hand, cotton accounted for 72% of Bangladesh's garment exports, man-made fibre apparel 24% and the rest were silk, wool and others.
Bangladesh's ready-made apparel has made a strong footprint in the global market and emerged as the second largest exporter in the world after China.
However, the country would lose all the LDC-specific international support measures, including preferential rules of origin and duty-free and quota-free market access soon after the graduation to a developing nation in 2026 – except the Everything but Arms (EBA) scheme of the EU GSP, which will end in 2029.
The losses of the preferential market facilities after graduation may create some challenges for the country's exports, particularly that of the RMG, which alone contributes around 81% of the total exports.
Speaking on the occasion, Planning Minister Muhammad Abdul Mannan said switching to man-made fibre would help the country bring about increased diversification within the RMG sector.
He also said such a transformation would strengthen the backward linkage of the local RMG industry.
"But such a transition will not require much investment. Now, some policy support, such as duty-free facility and low-cost loans, is needed," he noted.
Mentioning that businesses have demanded a 10% incentive on man-made fibre-based product exports, he said the government will decide on it.
ERD Secretary Sharifa Khan, in her speech, said, "Bangladesh would have to grab the potential of man-made fibre while maintaining the current growth in cotton to increase our global market share."
BGMEA President Faruque Hassan called for enhancing the competitiveness of the RMG sector to prepare it for the post-LDC graduation scenario.
He also emphasised simplification of relevant business processes and improvement in logistics.
Executive President of Bangladesh Knitwear Manufacturers and Exporters Association Mohammad Hatem attended the event as special guest.
Executive Director of Bangladesh Bank Kazi Rafiqul Hassan and Director of Bangladesh Textile Mills Association Syed Nurul Islam also spoke during the event.
Farid Aziz, additional secretary to ERD and project director of Support to Sustainable Graduation Project, delivered the welcome address at the event.
Stakeholders from the public and private sectors as well as research organisations participated in the workshop.