DESPITE a remarkable advancement in the industrial sector, with its contribution now standing at more than a third of the gross domestic product, it has failed to diversify export-oriented industries, products and markets. A lack of comprehensive and consistent policies and the failure to effectively implement the few that are there are said to have led to such a state. An excessive reliance on apparel and fewer major export destinations and a lack of diversification have increasingly exposed the economy to risks, evident in the perceived apprehension about the consequences of the fresh tariff the United States, a major destination of apparel 鈥� imposed on goods export from Bangladesh. As a part of the sweeping global US tariffs, it has imposed a fresh 37 per cent tariff on Bangladeshi goods whereas most Bangladeshi products now face a 15 per cent tariff. Economists say that diversified markets and products could help Bangladesh to navigate such 鈥榩unishing tariffs鈥� that the United States imposed or other big economies can impose in the future. But export destinations have remained narrow. In the 2023鈥�24 financial year, the percentage of Bangladesh鈥檚 total export to the United States was around 17, to the European Union 43.87 and the United Kingdom 10.7.
Bangladesh has, moreover, for about 40 years been over-dependent on the subsidised apparel sector while the country has failed to tap the potential of other industries such as pharmaceuticals, leather, jute, processed food and light engineering that had, and still have, the potential to compete on the global market. Compared with its East Asian neighbours such as Vietnam, Malaysia and Thailand, which had similar economic conditions and levels of industrialisation even in the 1990s, Bangladesh has not been able to attain the desirable pace in diversification of export-oriented industries. The export earnings, which increased from $348 million in the 1972鈥�73 financial year to $44.47 billion in the 2023鈥�24 financial year, are largely dependent on the apparel sector, which accounts for about 80 per cent of the total export earnings. The industry has, moreover, confined itself to low-end products of a limited range and has not diversified as much as is expected of an industry in operation for more than four decades. Other industries which had high export potential have remained confined to the domestic market in the absence of inclusive industrial policy and government support. A high concentration in the apparel sector shows the weakness of the export business.
The government should, therefore, rethink and reshape its industrialisation goals and follow an industrial policy that serves the need for the diversification of export-oriented industries, products and markets. The government needs to extend the required policy support to sectors that have high export potential.
