Industry insiders in India said that although a fire accident in a garment factory in Bangladesh caused a huge human tragedy, Bangladesh’s garment outsourcing is still attractive and the garment outsourcing business will not be transferred to other countries.
It’s not just a matter of labor cost competitiveness, but also that the government, under the direct supervision of the Prime Minister, has made investing an easy job for entrepreneurs.
V. Ramachandran, the head of Weearr Intercontinental who lives in Bangalore and has been engaged in the apparel outsourcing business for more than three decades, believes that apparel buyers will still do a lot of apparel business with Bangladesh, despite the unfortunate events in Bangladesh. ACCIDENT. Because Bangladesh also has some advantages, such as tax exemption for exports to Canada, the EU/Hong Kong. He said the quality of machinery and production in Bangladesh was at the same level as other garment manufacturing countries.
Talking about the cost-effectiveness of the Bangladesh business, he said that the cost of producing a pair of five-pocket jeans in Bangladesh is about US$1.30-1.40 per pair. But in India, the cost is US$4-5/carton. He said that even if wages in Bangladesh increase by 30%, the final FOB price will still be competitive. In addition, Bangladesh also enjoys the tariff advantages of importing countries, except the United States.
Ramachandran said the quality may be the same across all garment-exporting countries, but Bangladesh, Vietnam and Cambodia produce better products. The average work efficiency of many factories in India is 60%, while in Bangladesh, due to abundant labor, the efficiency is 100%.
He added that many Indian companies, big and small, have invested in setting up joint ventures in Bangladesh. Koreans are also investing in Bangladesh. Indians hold key positions in the joint venture, and their factories employ 500-3,000 local people. Most clothing purchasing houses have set up liaison offices in Dhaka to negotiate with merchants.
The Prime Minister directly supervises investment and guides entrepreneurs to invest in Bangladesh, which is a major advantage. He estimates that nearly 400 Indian clothing buying houses are operating in Bangladesh because registering in Bangladesh is easy.
According to reports, Bangladesh has 5,000 garment factories across the country, employing more than 3.5 million workers, ranking third in the world, after China and Italy. Many well-known global brands and retail chains source from Bangladesh.
