An Overview about Opportunities and challenges that a foreign investor faces when seeking to invest in the Bangladesh Garment Industry.

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Assignment
On
An Overview about Opportunities and challenges that a foreign investor faces
when seeking to invest in the Bangladesh Garment Industry
Course Title: Theory and Practice of International Business
Course Code: BA-3107
PreparedTo
Farzana Akther
Assistant Professor, Dept. Head of Business Administration
PreparedBy
GENEX
North Western University, Khulna.
Date of Submission: 30th April 2021

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GENEX Group Member Details :
No Name ID
1 Saif Hasan (Group Leader) 20201053101
2 Miajul Islam 20191049101
3 MD.Ibrahim Hossain Taj 20161086101
4 Zinia Alam 20183017101
5 Khathrin Imita Biswas 20192001101
6 S M Mashfi Al Mahin 20183001101
Assignment Contents :
SI
No.
Topic Page No.
1 Introduction 03-04
2 Foreign Investment 04
3 Factors affecting FDI Sector 04-08
4 Brownfield Investment 08-10
5 FDI in Bangladeshi Garments Industry 10-12
6 History of Garments Industry in Bangladesh 12-14
7 Labor law of garments industry 14-16
8 Textile and RMG sectors of FDI 16
9 Where is FDI needed 17
10 Challenges that hamper the productivity 17-18
11 FDI Status Sector 18-19
12 Opportunities that are recognized and those are needed to be recognize 19-20

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1.Introduction
Foreign direct investment (FDI) is the process whereby residents of one country (the source
country) acquire ownership of assets in another country (the host country) for the purpose of
controlling the production, distribution and other activities of a firm in that country. UNCTAD,
1999 defines FDI as “an investment involving a long-term relationship and reflecting a lasting
interest and control of a resident entity in one economy (foreign direct investor or parent enterprise)
in an enterprise resident in an economy other than that of the foreign direct investor (FDI
enterprise, affiliate enterprise or foreign affiliate).” The term “longterm” is used in the last
definition in order to distinguish FDI from portfolio investment, the latter characterized by being
short-term in nature and involving a high turnover of securities.
Determinants of FDI
Key determinants of FDI in host country
Economic Conditions
1.Markets: A market is a place where two parties can gather to facilitate the exchange of goods
and services. The parties involved are usually buyers and sellers. The market may be physical like
a retail outlet, where people meet face-to-face, or virtual like an online market, where there is no
direct physical contact between buyers and sellers.
2.Resources: A resource is a source or supply from which a benefit is produced and that has some
utility. Resources can broadly be classified upon their availability — they are classified into
renewable and non-renewable resources.
3.Competitoveness: Competitiveness is the demonstrated ability to design, produce and
commercialize an offer that fully, uniquely and continuously fulfils the needs of targeted market
segments, while connecting with and drawing resources from the business environment, and
achieving a sustainable return on the resources employed.
Host Country Policies
1.Macro Policies: Microeconomic policy is action taken by government to improve resource
allocation between firms and industries in order to maximize output from scarce resources.
Macroeconomic policy is central to the government's long term policy of reducing constraints on
growth such as inflation while improving LT growth.
2.private sector: private sector is the part of the economy that is run by individuals and companies
for profit and is not state controlled. ... Companies and corporations that are government run are
part of what is known as the public sector, while charities and other nonprofit organizations are
part of the voluntary sector.
3.Trade and Industry: Trade is a basic economic concept involving the buying and selling of goods
and services, with compensation paid by a buyer to a seller, or the exchange of goods or services
between parties.

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4.FDI policies: Foreign direct investment (FDI) is an investment made by a firm or individual in
one country into business interests located in another country. Generally, FDI takes place when an
investor establishes foreign business operations or acquires foreign business assets in a foreign
company.
MNE Strategies
1.Rick perception: Risk perception is the subjective judgement that people make about the
characteristics and severity of a risk.
2.Sourcing: Sourcing is defined as a technical activity with the purpose of identifying existing
suitable products and services on the market and qualified suppliers available to provide those
products and services.
3.Integration transfer: Data integration is the practice of consolidating data from disparate sources
into a single dataset with the ultimate goal of providing users with consistent access and delivery
of data across the spectrum of subjects and structure types, and to meet the information needs of
all applications and business processes.
2.Foreign Investment
Foreign investment is when a company or individual from one nation invests in assets or ownership
stakes of a company based in another nation. As increased globalization in business has occurred,
it's become very common for big companies to branch out and invest money in companies located
in other countries. These companies may be opening up new manufacturing plants and attracted to
cheaper labor, production, and fewer taxes in another country.
How a Foreign Direct Investment Works?
Foreign direct investments are commonly made in open economies that offer a skilled workforce
and above-average growth prospects for the investor, as opposed to tightly regulated economies.
Foreign direct investment frequently involves more than just a capital investment. It may include
provisions of management or technology as well. The key feature of foreign direct investment is
that it establishes either effective control of or at least substantial influence over the decision-
making of a foreign business. [The Bureau of Economic Analysis (BEA), which tracks
expenditures by foreign direct investors into U.S. businesses, reported total FDI into U.S.]
3.Factors affecting FDI Sector
1. Regulatory
Investment Process
1. Competitive selection process
2. Enforcement of contract
3. Responsiveness of needs and time frame of investors

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4. Presence of government guarantee
5. World-class security package
6. Government's commitment to contracts
7. Power and Energy Fast Supply Enhancement Act (2010)
8. No international benchmark for tariff setting
Establishment
1. Construction permit
2. Time and efficiency of staff to complete the procedure
3. Liability insurance
4. Regulation on qualification of personnel who supervise construction
Revenue risks/controls
1. Tax exemption
2. Termination of contracts without compensation to foreign stakeholders
3. Price cap regulation
4. Regulation on subsidy for consumers
Regulatory risks and controls
1. Competition policy
2. Regulation on ownership (Wholly owned subsidiary/JVs)
3. Protection of Foreign investors Act (1980)
4. Long approval process of IPPs
5. Protection of property rights
6. Profit repatriation controls
7. Environmental regulations
8. Need for internationally accepted Environmental and Social Impact Assessment (ESIA) for
large projects
Government and legislative processes
1. Level of administrative competence
2. Continuity and consistency of rules and processes

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Labor market
1. Wage and other returns
2. Workers' insurance
3. Employment condition/turnover
4. Conduct towards female workers
5. Regulation on trade union
6. Regulation on health, hygiene and safety of workers
Foreign investment
1. Land acquisition/rent/lease of land
2. Property registration
3. Tax/rebate scheme
4. Exit policy (for large projects five to seven years) For smaller projects after two years)
5. Foreign investors can participate in more than one project for prequalification of
investors and/or tenders
6. Foreign investors are not obliged to sell share through public issues
7. Foreign investors can buy shares locally/acquire a local company
8. Foreign technicians are not subject to personal income tax for upto three years
9. Avoidance of double taxation
10. Foreign investors when investing their retained earnings/dividends locally, will be
considered as new investment
11. Quick allocation of work permits
International trade
1. Free trade across border
2. Free flow of raw materials

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Financial institutions
1. Approval of central bank for transferring capital
Judicial structure
1. Fast track procedure for small claims
2. Commercial arbitration governed by a consolidated law or chapter of the
applicable code of civil procedure (Bangladesh Arbitration Act 2001)
2. Political
Voice and accountability
1. Democracy
2. Vested groups
3. Accountability of public officials
4. Civil liberties
5. Electoral process
6. Transparency in government policy making
7. Freedom of press
8. Violence and terrorism
Government effectiveness in implementing policies
1. Capacity to adapt policies
2. Policy consistency and forward planning
3. Political interferences
4. Excessive bureaucracy and red tape
5. Coordination and collaboration between ministries
6. Control of corruption

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3. Economic and financial
Economic factors
Growth and income
1. Economic growth and development
2. Good investment credit rating by Moody's
Government side
1. Government spending for infrastructure
2. Government debts
Labor
1. Labor costs
2. Human capital/skilled labor
Infrastructure
1. Gas transmission line
2. Deep seaport
3. Domestic waterway
4. Railroad
5. Coal and LNG terminal
6. Bulk oil terminal
7. Natural resources
8. Others Road network
Prices
1. Inflation
2. Real exchange rate
4.Brownfield Investment
Brownfield Investment (BI) is a type of foreign direct investment (FDI) where a company invests
in an existing facility to start its operations in the foreign country. In other words, a brownfield
investment is the lease or purchase of a pre-existing facility in a foreign country.

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Understanding a Brownfield Investment
A brownfield investment is often undertaken when a company wants to invest and start operations
in a new country but does not want to incur the high start-up costs associated with a greenfield
investment (a greenfield investment is a foreign direct investment where, instead of using existing
businesses in the foreign country, the investor opens their own new business there – basically, a
“from the ground up” approach). The underlying rationale behind a brownfield investment is to
enter into a new foreign market through businesses that already have a presence there.
In a brownfield investment, the company either invests in existing facilities and infrastructure
through a merger and acquisition (M&A) deal or leases existing facilities in the foreign country.
Scenario of the FDI in Bangladesh
Though FDI has a lot of potentialities in improving economic growth of a country, the question of
optimum distribution of it remains behind the scene. In fact, the decision of the investors mainly
depends upon their mental demand which is somehow existed with the organizational agreements
like World Trade Organization, Association of South East Asian Nation, South Asian Free Trade
Agreement, North African Free Trade Agreement, world economic environment, willingness of
the developed countries, host countries economic condition, political situation, infra-structural
condition and so on. In the perspective of Bangladesh foreign investors from both the developed
and developing countries come forward to invest their capital. For example, 27 countries from
various regions of the world and the countries from East-Asian region proposed for FDI in
Bangladesh while the amount was to be 94.90 percent of the total investment during 2006-07.

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Among the countries concerned UAE, USA, Singapore, South Korea, UK, India and China played
crucial role of FDI in Bangladesh.
Investors from both, the developed and developing world, have been attracted to invest in
Bangladesh. The country has become an attractive destination to invest due to the presence of
cheap skilled labors along with macroeconomic environment stability. Between 1980-1995 FDI
inflow into Bangladesh varied from US$ 308 million to US$ 356 million which started with an
amount of US $ 0.090 million in 1972. Since the mid-90s FDI inflow increased significantly. This
was due to the opening up of telecommunication sector along with energy sector by the
government. Besides other reasons like setting up the Investment Board (1989) and relaxing the
control of capital lead to significant rise in inflow of FDI from 1997 which was almost triple (US$
39.4 million) compared to 1996 (US$ 13.5 million). Despite fulfilling all the prerequisites of a free
market economy, offering various financial and nonfinancial incentives, establishing EPZs, etc.
still Bangladesh has not attracted satisfactory amount of FDI. A question may arise that the
economy is not growing as it is supposed to since Bangladesh earned US$ 823.6 million FDI in
2009 which is higher by 63% relative to the value of 2008. The value increased to USD 1184.8,
1474.5 million in 2011 and 2012 respectively. In 2014, Bangladesh earned US$ 1581.8 million.
The above graph shows that since 1971 FDI levels were inconsistent despite comparative
advantage in labor-intensive policies along with regulations and other options, which is quite
concerning. This fig shows that most of the times over the years FDI is increasing. Starting from
1971 the level of FDI was US$ 0.85 million, which was quite low because 1972 was the beginning
on Bangladesh. As the time passed Bangladesh became more developed in different sectors and
its FDI values also increased, such as in the next 10 years the value rose to US$ 6.89 million but
eventually after that it fell down into US$0.4 million. On the other hand, within three years this
rate again increased from US$ 5.61 to 6.37 million. These ups and downs continued until 2008.
After 2008 the FDI rate increased every year. In 2014 the value of FDI became US$ 1581.8 million.
5.FDI in Bangladeshi Garments Industry
FDI injection in the apparel and textile sector is of utter importance for Bangladesh for a long
time, the advent of COVID-19 gave a renewed interest in how our apparel and textile sector may
maximize FDI post-corona virus inflow. For the record, FDI in our apparel and textile has been
hovering around $400 million which is far from the expectation.
So, to increase 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 a
skilled workforce where FDI can play an important role.
Additionally, Bangladesh should strive for heavy investment in digitizing the process and
transforming the value chain to address the post- COVID challenges. We must keep in mind that

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Multinational companies, who are interested in shifting from China, prefer Vietnam since the
Southeast Asian nation has no ‘discrimination’ towards FDI. In this area, Bangladesh must
improve meaning improving ease of doing business environment and logistics performance.
Our current dependence on imports of MMF, industrial machinery, chemicals, inefficient port
facilities and customs processing has resulted in much longer shipping time compared with
rivals. Furthermore, more than 70 percent of exports is concentrated on five basic items while 74
percent of items are cotton-based and 83 percent of exports are destined to the European Union
and North America.
Due to this concentration on low-value-added items, Bangladesh’s per-unit price is very low.
While the global market share of MMF products has increased from 28 percent to 40 percent, in
Bangladesh, its share has declined or remained unchanged.
Therefore, 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 local industry as well
as ensure preparedness in the post-pandemic recovery efforts. Inarguably, FDI in these segments
can be a boon for the Bangladesh economy is moving towards value-added products.
According to BTMA, currently, the primary textile sector can meet around 90% yarn demand for
knit RMG and 40% yarn demand for woven RMG.
On the other hand, denim fabrics in the country can meet around 50% demand, where higher-end
fabric is mostly dependent on imports. Usually, apparel makers discourage FDI in basic product
manufacturing as we have enough capacity in basic and medium segments.
As per Bangladesh Bank data, in 2018, the FDI in the sector was US$408 million which was
increased by 24% to US$506.84 million. However, it is worrisome to see FDI net inflows in the
textile and wearing sector stood at US$55.05 in the first three months (i.e. January-March) of
2020.
In FY2019, Hong Kong was the largest investor with an investment of US$ 61.12 million in the
country’s textile and garment industry, followed by Singapore’s US$33.46 million, China with
US$29.94 million, Bermuda with US$25.87 million, British Virginia Islands US$18.53 million
and South Korea US$17.23 million, and according to FDI data of Bangladesh Bank.
To further increase the FDI in the sector, the government has to promote investment
opportunities by creating an enabling business climate and offering incentives to keep production
cost a reasonable level.
However, the business leader hopes the FDI in the sector will rise as the government is providing
an investment facility in Special Economic Zones.

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Under the Bangladesh Export Processing Zones Authority (BEPZA) and Bangladesh Economic
Zones Authority (BEZA), 100% FDI is allowed in the textile and apparel sector but it
discourages such investment for basic items. In EPZs, 100% foreign investment in the apparel
and textile sector is allowed but it discourages this in the case of regular items as there is no
scope of technology transfer and knowledge and experience sharing out of such traditional
investment.
Moreover, BEPZA encourages overseas investment in high valued items such as jackets, suits,
army dresses, fashion jackets, outwear and protective jackets.
Since coronavirus originated from China, there has been an international backlash against the
country for the virus’ spread and consequent economic disruptions. Some countries like Japan
have already decided to move production plants from China.
With an adequate campaign and the right incentives, Bangladesh can make itself an attractive
place for the countries currently investing in China to redirect their investments. The United
States is fourth in terms of FDI inflows in Bangladesh, it is the greatest source of foreign
investments worldwide (about US$6 trillion) and should be pursued.
In addition, because of the ongoing trade war between the United States and China, the United
States’ imports from China dropped by about US$60 billion in 2019. Bangladesh should exploit
this dynamic and market itself as a promising import base for the United States moving ahead.
Although many sectors will continue to draw foreign investments after the pandemic subsides,
some sectors may lose their funding and some new ones may emerge after the coronavirus crisis
is over. However, whatever happens after the pandemic, we need to equip ourselves with the best
resort available.
6.History of Garments Industry in Bangladesh
Once the cloth of Bangladesh achieved worldwide fame specially muslin and jamdani cloth or our
country was used as the luxurious garments of the royal figures in Europe and other countries. The
British rulers in India didn’t develop our cloth industries at all. Rather they destroyed them and
imported cloths from England. Garment Industry Large-scale production of readymade garments
(RMG) in organized factories is a relatively new phenomenon in Bangladesh. Until early sixties,
individual tailors made garments as per specifications provided by individual customers who
supplied the fabrics. The domestic market for readymade garment, excepting children wears and
men's knit underwear (genji) was virtually non-existent in Bangladesh until the sixties.
Since the late 1970s, the RMG industry started developing in Bangladesh primarily as an export-
oriented industry although; the domestic market for RMG has been increasing fast due to increase
in personal disposable income and change in life style. The sector rapidly attained high importance
in terms of employment, foreign exchange earnings and its contribution to GDP. Most importantly,

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the growth of RMG sector produced a group of entrepreneurs who have created a strong private
sector. Of these entrepreneurs, a sizeable number is female. A woman entrepreneur established
one of the oldest export-oriented garment factories, the Baishakhi Garment in 1977. Many women
hold top executive positions in RMG industry. The hundred percent export-oriented RMG industry
experienced phenomenal growth during the last 15 or so years. In 1978, there were only 9 export-
oriented garment manufacturing units, which generated export earnings of hardly one million
dollar. Some of these units were very small and produced garments for both domestic and export
markets. Four such small and old units were Reaz Garments, Paris Garments, Jewel Garments and
Baishakhi Garments.
Reaz Garments, the pioneer, was established in 1960 as a small tailoring outfit, named Reaz Store
in DHAKA. It served only domestic markets for about 15 years. In 1973 it changed its name to
M/s Reaz Garments Ltd. and expanded its operations into export market by selling 10,000 pieces
of men's shirts worth French Franc 13 million to a Paris-based firm in 1978. It was the first direct
exporter of garments from Bangladesh. Desh Garments Ltd, the first non-equity joint-venture in
the garment industry was established in 1979. Desh had technical and marketing collaboration with
Daewoo Corporation of South Korea. It was also the first hundred percent export-oriented
company. It had about 120 operators including 3 women trained in South Korea, and with these
trained workers it started its production in early 1980. Another South Korean Firm, Youngones
Corporation formed the first equity joint-venture garment factory with a Bangladeshi firm, Trexim
Ltd. in 1980. Bangladeshi partners contributed 51% of the equity of the new firm, named
Youngones Bangladesh. It exported its first consignment of padded and non-padded jackets to
Sweden in December 1980.
Till the end of 1982, there were only 47 garment manufacturing units. The breakthrough occurred
in 1984-85, when the number of garment factories increased to 587. The number of RMG factories
shot up to around 2,900 in 1999. Bangladesh is now one of the 12 largest apparel exporters of the
world, the sixth largest supplier in the US market and the fifth largest supplier of T-shirts in the
EU market. The industry has grown during the 1990s roughly at the rate of 22%.
The growth of the industry in terms of number of units and employment generation is shown in
table - 1 below:
Year Number of Garment Industries Employment in Million Workers
1983-84 134 0.040
1988-89 759 0.317
1993-94 1839 0.827
1998-99 2963 1.500
2003-04 3957 2.000

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2008-09 4825 3.100
[Source: BGMEA]
At present there are about 5000 garment industries in the country and 75 percent of them are in
Dhaka. The rest are in Chittagong and Khulna. These Industries have employed fifty lacks of
people and 85 percent of them are illiterate rural women. About 76 percent of our export earning
comes from this sector.
The country's RMG sector has relieved Bangladesh from over populous unemployment burden
through providing the largest employment next to agriculture, transport, and trade and industry
sector. This sector has uplifted the neglected section of the population, thus radically transforming
the socio-economic condition of the country. Such empowerment and employment raised
awareness regarding children education, health safety, population control disaster management
only so for. It is an epoch making event in the history of Bangladesh.
7.Labor law of garments industry
There are some certain criteria in working condition. Every employer is bound to provide sound
working environments for their employees according to different section of the factor is act 1965.
In working environment the following criteria’s should be provide by the environment for
employees of his/her organization. This are-
Health and Hygiene
• Cleanliness
• Disposal of wastages and effluents
• Ventilation and temperature
• Dust and fume
• Artificial humidification
• Over crowding
• Lighting
• Drinking water
• Latrines and urinals
• Spittoons
Safety
• Precautions Incase of fire
• Fencing of machinery

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• Working on or near machinery in motion
• Employment of children’s on dangerous machines
• Striking gear and devices for cutting of powers
• Self acting machines
• Causing of new machineries
• Prohibition of employment of women and children near cotton openers
• Revolving machinery
• Floors stairs and means of access.
• Excessive weights.
• Production of eyes.
Welfare
• Washing facilities.
• Fast aid appliances.
• Shelters.
• Canteens.
• Rooms for children’s.
Working hours
• Weekly hours.
• Weekly holiday.
• Compensatory weekly holiday.
• Daily hours.
• Intervals for rest or meals.
• Spread over.
• Night shift.
• Prohibition of overlapping shift.
• Extra allowance for over time.
• Restriction on double employment.

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Employment of young person
• Prohibition of employment of children.
• Certificate of fitness.
• Working hours for children’s.
• Register of child workers.
• Power to require medical examination.
• Leave and holidays with wages
Leave and holidays with wages
• Annual leave with wages.
• Festival holidays.
• Casual leave and seek leave.
• Maternity leave.
• Wages during leave or holiday periods.
• Payment in advance in certain case.
Those are the specific criteria which are mention in the factories act 1965. Each and every section
of the law is not mentioned and describe here due to the shortage of space and those are not subject
related. Those laws must be followed by the employer of garments worker.
8. Textile and RMG sectors of FDI
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 Dhaka Tribune.
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 local
industry.

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FDI in these segments can be a boon for Bangladesh economy in moving towards the value added
products, the economist adds.
9. Where is FDI needed
When I say challenges that hamper the productivity of garment industry production. It can in any
form that affects the production performance, quality and on time delivery. All factories and
manufacturing companies faces various problems. You cannot find a single factory without a
problem. Sometime a problem will not end. Even if one problem is solved then another problem
raises in various formats and process.
10.Challenges that hamper the productivity
Problem is not a bad thing, but knowing your problems can make you build the ability to face the
problem with solutions accordingly. Most of the problems occurs and affects line production,
performance, product quality and timely delivery. By understanding the problems, you can work
for the better solution that keeps away from the frequent problems. Here are some problems that
are normally faced by lot of manufacturing companies.
Defect Generation in Sewing
When the sewing lines are completed and the garments are checked, there are number of garments
that have defects. Defects may be due to defective materials and cutting during the sewing process.
Even though some defects are found and repaired, there will be even some defects during the final
sewing stages.
Problem with Raw Materials
Production team does not get the raw materials on time. Sometimes they are delayed too much and
only received during urgency and with very low quality.
Delay in Production Start
Production planning department will plan the schedules in time, But the fabrics will be not being
delivered in Planned Cutting Date. Lines are ready with machines and labors, but Some time the
cutting departments takes longer time for cutting and the supervisors get the materials very late
which causes delay in production.
Long Line Setting Time
line setting time increases due to poor prior the line setting
High Lost Time

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Machin operators lose some valuable hours due to various reasons. The reason may be due to poor
co-ordination within the department, previous process not completed on time, feeding shortage
and other quality issues.
Operator Absence
With operator absence there is an increase Labor problem in sewing department. Due to this
companies are offering bonus for attendance to make them present on all days in a month.
Frequent Change in Production Planning
When a productions plan is received and the work is in progress, the production department loads
a style to line and suddenly get new instructions to stop the current style and start with one new
style. This breaks the production time and cause delay in the production process.
Insufficient Information
Factories conduct production plan meeting and weekly meetings. Even after getting the details
from the meeting, exact details are not passed on to the production department. Due to delivery
schedule pressure, bulk production is started without even getting the full requirements of the
order.
We know you are from the garment production or fashion industry where you would have faced
these problems. Please let us know if you have faced any other problems. We have solutions and
we would like to improve it according to the current problems in the industry.
11.FDI Status Sector
Foreign direct investment (FDI) is often seen as important catalysts for economic growth in the
developing countries. The relationship between Foreign Direct Investment (FDI) and economic
growth has long been a subject of great interest in the field of international development. In the
era of volatile flows of global capital, the stability of FDI emerges as an effective channel to faster
growth in developing countries, particularly in relation to Least Developed Countries (LDCs). The
Neo-classical growth model as well as endogenous growth models provides the basis for most of
the empirical work on the FDI-growth relationship. As a developing country, Bangladesh needs
FDI for it’s ongoing development process. Since independence, Bangladesh is trying to be a
suitable location for FDI. However, the total inflow of FBI has been increasing over the years. In
1972, annual FDI inflow as 0.090 million US$, and after 39 years, in 2011 annual FDI reached to
$1.13 billion. It is a matter of great concern in spite of Bangladesh’s comparative advantages in
labor incentive manufacturing, adaption of investment friendly policies & regulation,
establishment of EPZs in different suitable locations and other privileges, FDI flows have failed
to be accelerated. However, the year 2011 show a substantial improvement in FDI achievement.
Foreign direct investment in BD last year rose by 24.42% to 1.13 billion, the highest in its history,
according to UNCTAD’s World Investment Report 2012. According to UNCTAD’s report 2012,

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$272.04 million came to textile and apparel sector. The second biggest was $249.37 million to the
banking sector while the third $238.21 million went to power, gas and petroleum sectors.
12.Opportunities that are recognized and those are needed to be recognize
Opportunities and Growth Potential
Good chances for keeping or even increasing the Bangladeshi market share (securing and
creating jobs, attracting foreign currency and investment, economic and social development).
 Potential for higher value addition provided appropriate steps concerning the
development of the spinning and weaving sector are being taken and productivity
increases among the manufacturers (higher flexibility, higher self-sufficiency, extension
of capacity and quality improvement without additional investments into machinery).
 Increase of potential, attractiveness and positive image of Bangladesh and its RMG sector
as a production and investment location for international customers/investors.
 Competitive price-performance ratio (low production costs, basic experience regarding
international quality standards, up-to-date technical equipment)
 Local availability of yarns for knitwear and trims & accessories.
 Good potential for development of competitive advantages for garment manufacturers
e.g. concerning productivity, quality control, product development, customer service and
management
 Increased market access upon inclusion of new countries who signed Bilateral Trade
Agreements.
Opportunity
1. EU is willing to establish industry in a big way as an option to china particularly for knits,
including sweaters
2. Bangladesh is included in the Least Developed Countries with which US is committed to
enhance export trade
3. Sweaters are very economical even with china and is the prospect for Bangladesh
4. If skilled technicians are available to instruct, prearranged garment is an option because labor
and energy cost are inexpensive.
5. Foundation garments for Ladies for the FDI promise is significant because both, the technicians
and highly developed machinery are essential for better competence and output
6. Japan to be observed, as conventionally they purchase handloom textiles, home furniture and
garments. This section can be encouraged and expanded with continued progress in quality.

20. 20 | P a g e
Opportunities needed to recognize
E-MARKETING IN THE TEXTILE: Both the large and medium-sized companies are involved in
the Bangladeshi textile industry. The textile industries in Bangladesh are highly complicated and
integrative. Every sub-sector requires E-Marketing since there are only a very few textile systems
that have finished products completely vertically integrated. In short, few textile companies in
Bangladesh grow, purchase or sell essential raw materials on the domestic and international
markets.
SOCIAL MEDIA MARKETING: Marketing through Facebook, Twitter, LinkedIn, and YouTube
is the example of social media marketing. LinkedIn is among the social media most useful as a
marketing perspective for textile manufacturers. LinkedIn is a social media for professionals and
it is easy to find out from an industry of textile manufacturers. By attracting associated textile
experts and organizations businesses, a profitability is readily generated. The social network
platform most frequently used is Facebook. They comprise a large database of persons and jobs
from around the world. So companies generate their lead by targeting these textile-related
professional.