INVESTMENT OF FOREIGN COUNTRIES IN BANGLADESH TEXTILE INDUSTRY

  With the improvement of Bangladesh textile industry, foreign investment on the industry has also raised significantly. In the financial year 2021, $377 million is fetched by the Bangladesh textile industry as foreign investment. A 6% increment is observed in the year 2021. The foreign direct investment is growing continuously and it is becoming one of the major factors for the Bangladesh textile industry. The cheap labour, government support, and location in the middle of Asia-pacific region made it suitable for foreign direct investment.

Figure 1: FDI trends of Bangladesh

(Source: https://www.textiletoday.com.bd/wp-content/uploads/2018/08/FDI-trends-in-Bangladesh-textile-and-apparel-industry-from-2015-2017.jpg)

Among the total foreign investment on the textile industry of the country, a $222 million was invested as reinvested earnings for the companies operating inside the country. South Korea is considered as the largest investor of Bangladesh textile industries. It invests a total of 32% of the foreign direct investment received by Bangladesh textile industry. The second largest investor is Hong Kong which invested $89 million on the industry.

Bangladesh is the second largest exporter of garment and textile after Chine. A tariff free access of market is gained by Bangladesh in Europe, Australia, and Canada. Popular international brands like H&M, Levi’s, Zara, and Gap are manufacturing and importing textiles from Bangladesh. To boost the foreign direct investment in the textile, Bangladesh government is also providing several investment opportunities in the infrastructure and energy sector. It will boost textile industry investment volume. For United States, the foreign direct investment on the Bangladesh textile industry is $33.02 million.

Figure 2: Top foreign investors of Bangladesh

(Source: https://rmgbd.net/wp-content/uploads/2019/05/fdi-infographic-pie-chart-1557424856001-1024x464.jpg)

There are several reasons for which foreign direct investment is continuously growing in the Bangladesh textile industry.

·         Quick return: The first reason is quick return. Bangladesh textile industry is considered one of the most powerful industries that return the investment within few years. The investor can expect a positive return.

·         Large external and internal markets: Bangladesh textile industry has a powerful internal and external market which can be considered by the investor before investment. It will definitely develop a positive return of the investment.

·         Cheap labour: Bangladesh is abundant of labour and it is an opportunity for the foreign investors. The minimum wages can reach $250/month.