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Garment Production Continues its Regional Exodus Towards Bangladesh

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The lower cost of labor in Bangladesh is beginning to force manufacturing jobs out of neighboring markets in India and Pakistan.

Despite recent political instability and ongoing trouble meeting its expanded electricity needs, Bangladesh has continued its garment industry’s steady expansion. The country’s cheap, under-utilized labor force has drawn manufacturing investment away from India and Pakistan as wages in those countries continue to rise.

The minimum wage for manufacturing workers in Bangladesh is approximately 1,700 Rupees, less than half the Indian minimum wage of 5,000 Rupees. This difference in cost has been significant enough to drive $600 million (~29,610,035,828 Rps.) worth of Indian garment manufacturing investment into Bangladesh over the past year, according to estimates from the Apparel Export Promotion Council.

The rise of Bangladesh’s low-cost labor force can be attributed to several causal factors. India’s manufacturing sector has shifted away from textiles in the past decade, focusing instead on engineering goods and petroleum products, both of which require more highly skilled workers than garment manufacturing. Also, both the EU and the United States have counted Bangladesh among the world’s least developed nations in recent years, a status that gives the country preferential treatment in regards to tariffs and developmental loans.

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