Bangladesh FDI in Bangladesh apparel,
Bangladesh textile and apparel industries
received $408 million in foreign direct investment (FDI) in
2018, down by $13 million from the previous year. While total
FDI in the country saw a 68% rise to $3.61 billion in the same
year, the plunge in overseas investment in the textile and
apparel sector raised a question about its reasons and
effectiveness. For the last couple of years, FDI in the apparel
and textile has been hovering around $400 million.
When Bangladesh badly needs to produce
high -end products and increase production capacity in the
apparel industry, FDI in the area can play an important role in
technology transfer from the skilled foreign professionals,
economists and trade analysts believe.
“In increasing the export earnings and
sustaining the current growth of exports, Bangladesh needs to
increase production capacity and move for high-value goods to
get better deals from foreign brands for its apparel items. To
this end, the sector needs a huge amount of capital and skilled
workforce where FDI can play an important role,” Centre for
Policy Dialogue (CPD) research director Khondaker Golam Moazzem
has told to media.
He thinks such FDI should come in backward
linkage textile and high-end products of the readymade garment
as it will help transfer foreign and latest technologies to
embolden the local industry. FDI in these segments can be a boon
for Bangladesh's economy is moving towards the value-added
products, the economist adds.
Bangladesh is doing well in basic and
medium-end products in RMG, where primary textile is supplying
fabrics and yarn. But there is a huge scope of investment in the
primary textile, especially in high-end fabric textiles.
“Since there is a gap between demand and
supply of raw materials for the apparel, we need foreign
investment in the primary textile, which needs huge investment,”
Bangladesh Textile Mills Association (BTMA) president Mohammad
Ali Kokhon says.
But the FDI will not be attracted unless
the government policy becomes favorable and production cost is
reduced offering utility services including gas and electricity
at affordable prices, Kokhon points out.