Bangladesh may permit foreign direct investment (FDI) in the readymade garment sector. Japan is particularly interested in investing in Bangladesh’s RMG sector both in high end and basic garments. Foreigners usually want to invest in high end fashion garments where local manufacturers hardly have any stake. According to the BEPZA source, local manufacturers oppose foreign investment in the apparel sector outside export processing zones (EPZs) fearing a chaos in the industry as foreign companies will employ workers paying higher wages compared to them. Over 300 foreign-funded apparel factories are being operated inside the EPZs. When a joint venture factory offers wages higher than the government wage structure, workers in local factories also demand the same. Local manufacturers are not against allowing FDI in the apparel sector but they say foreigners should also invest in the backward linkage industry. They reiterate that Bangladeshi manufacturers are good enough to invest in basic garments and don’t want any competitor in these products. They add that they have built the apparel industry with great effort and over a long period and that any foreign investment would undercut their main competitive advantage– the low wages.
