Historical Background of Textile Industry in Bangladesh

Textiles play a vital role in the economy of Bangladesh.The textile industry of Bengal is very old.This sector has not grown in a day. It has a long history to know and to highlight.

In 1972 the newly formed government enacted the Bangladesh Industrial Enterprises (Nationalization) Order, taking over privately owned textile factories and creating a state-owned enterprise (SOE) called Bangladesh Textile Mills Corporation (BTMC). BTMC never managed to match the pre-1971 output and in every year after the 1975–1976 fiscal years, lost money.Until the early 1980s, the state owned almost all spinning mills in Bangladesh and 85 percent of the textile industry’s assets (not including small businesses). Under the 1982 New Industrial Policy (NPI) a large number of these assets including jute mills and textile mills were privatized and returned to their original owners.
Global restructuring processes, including two non-market factors, such as quotas under Multi-Fibre Arrangement (MFA) (1974–2005) in the North American market and preferential market access to European markets, led to the “Emergence of an export-oriented garment industry” in Bangladesh in the late 1970s and ensured the garment sector’s continued success.

In 1980, an export-processing zone was officially established at the port of Chittagong.

By 1981, 300 textile companies, many small ones, had been denationalized and often returned to their original owners. In 1982, shortly after coming to power, President Hussain Muhammad Ershad introduced the New Industrial Policy (NPI), the most significant move in the privatization process, which denationalized much of the textile industry, created export processing zones (EPZs) and encouraged direct foreign investment. Under the New Industrial Policy (NPI) 33 jute mills and 27 textile mills were returned to their original owners.

From 1995 to 2005 the WTO Agreement on Textiles and Clothing (ATC) was in effect, wherein more industrialized countries consented to export fewer textiles while less industrialized countries enjoyed increased quotas for exporting their textiles. Throughout the 10-year agreement, Bangladesh’s economy benefited from quota-free access to European markets and desirable quotas for the American and Canadian markets.

Until 1994, Bangladesh’s ready-made garments (RMG) industry was mostly dependent on imported fabrics-the Primary Textile Sector (PTS) was not producing the necessary fabrics and yarn.

Since the early 1990s, the knit section expanded mainly producing and exporting shirts, T-shirts, trousers, sweaters and jackets. In 2006, 90% of Bangladesh’s total earnings from garment exports came from its exports to the United States and Europe.

By 2005 the ready-made garments (RMG) industry was the only multi-billion-dollar manufacturing and export industry in Bangladesh, accounting for 75 per cent of the country’s earnings in that year.

Textile exports from Bangladesh to the United States did increase by 10% in 2009.In Bangladesh, the number of employed workers in the textile industry increased by 400 000 in 1990 to 2 million in 2004, and the number of enterprises – from 800 to 4000.Nine out of ten people employed in the industry – are women. Generally, the state of the textile industry depends on the well-being of 10-12 million people in Bangladesh.

Rowshan Tabassum Juairia
Department of History
Dhaka University

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