FDI in textile and weaving sector jumps by 11pc in ’20

Staff Correspondent: Bangladesh’s Foreign Direct Investment (FDI) inflows in the textile and weaving sector in 2020 amounted to $271 million, an 11% increase from the previous year. According to Bangladesh Bank data, in 2020 Bangladesh received $271 million as foreign direct investment, which was $244 million in the previous year.
As per the data, South Korea was the largest investor with an investment of $50.32 million in the country’s textile and garment industry, followed by Kong $35.11 million, China $25.19, the United Kingdom $14 million, the Netherlands $6.18 million, USA $11 million, the British Virgin Islands $26.46 million, Sri Lanka $22.36 million and India $11 million.
However, the overall foreign investment in Bangladesh declined by 10.80 percent to $2.56 billion in 2020, which was $2.87 billion in 2019.
The FDI figure in the textile and weaving sector is not as much as expected but trade analysts and industry people termed it as a positive sign for the country when the country’s total investment is going through a stagnant situation.
Sector people are welcoming foreign investment in the new segment where there are opportunities to grow mostly in the high-end products.
“Right now, we are focusing on non-cotton products as the future of this category is bright and is gradually increasing. This segment needs more investment,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan told.
We are welcoming foreign investment mostly in the segment where there are opportunities to diversify products and knowledge sharing, said the business leader.
However, the rise in foreign investment inflows is a good sign for us and I am very much optimistic about the continuation of trend and better growth this year, said Hassan, also Managing Director of Giant Group.
On the other hand, the economist also suggested attracting more foreign investment in fabrics manufacturing in woven mostly, while there are opportunities for value-added products.
“Bangladesh has overcapacity to produce traditional goods and it is gradually moving towards high value good” Centre for Policy Dialogue (CPD) research director Khondaker Golam Moazzem has told.
To become self-sufficient in raw materials for high end products, the government should offer an opportunity to attract foreign investors with large volume investment, said Moazzem. The apparel sector needs a huge amount of capital and skilled workforce where FDI can play an important role, said the economist.
He also opined that FDI should come in backward linkage and textile sector also as still we are importing huge amounts of fabrics.
Not only that it will help the local manufacturers to experience knowledge from the foreign investors, said Moazzem.