Bangladeshi Textile Industry Takes a Major Hit Due to Coronavirus

The textile sector is a multi-billion dollar sector globally and depends on an intricate global supply chain

Bangladeshi Textile Industry Takes a Major Hit Due to Coronavirus
A factory worker in the garment industry in Dhaka, Bangladesh. Source: NPR.

Coronavirus has spelled the closure of many businesses this year, and the Bangladeshi textile industry has been no exception. Millions of textile workers in Bangladesh have lost their jobs and livelihoods, and numerous textile companies have had to close up shop due to the COVID-19 pandemic. Bangladesh and other South Asian countries, such as India, are major players in the textile sector and play a critical role in global fashion. The textile industry in Bangladesh has seen a major blow due to the coronavirus as consumer demand for fashion goods has dipped to nearly fifty percent in the last two quarters.

Most Fashion Brands Source their Textiles from Cheap-Labor Countries Such as Bangladesh

Major fashion brands source their textiles, including woven denim, in Bangladesh, and most have had to either cancel their orders or repudiate the shipping of already completed orders. This has meant that textile producers and companies have been left stranded with bales of completed orders that have nowhere to go.

Textile Companies Seize Production Due to COVID-19 and Resulting Restrictions

Companies have also had to seize the production of more clothing due to the coronavirus pandemic and regulations that necessitate social distancing. Bangladeshi is a developing country, and the pandemic has only exacerbated poverty and made the situation worse.

The textile sector is the single source of foreign exchange earnings for Bangladesh. The country is one of the major producers of ready-to-wear and woven clothing globally. Textile production in South Asia has become popular due to the growing garment industry, cheap labor, and automation in garment manufacturing.

Textile Industries Investors' Dilemma: Close Up Shop or Take Up More Loans?

Investors and textile company owners have had to grapple with the impossible choice between closing up shop or taking up more loans to maintain the orders they have already completed or producing more textile goods. They have also had to store completed orders to ensure that such orders can be shipped when their clients rebound and agree to pay for them.

Numerous global clients and brands had refused to pay for orders that they had made before the pandemic due to reductions in cash flow, a decline in demand, and business uncertainties. Denim producers in Bangladesh are popular the world over for their quality garments but were not spared the terrible plight of COVID-19. The situation meant that they had to find new cash flows to sustain their factories and the staff they could retain.

Layoffs in the Thousands in the Textile Industry Due to COVID-19

Numerous textile producers have had to lay off thousands of staff, and it is anticipated that over five million textile workers, mostly women, lost their jobs this year. The unfortunate thing is that three to ten family members may lack food and sustenance for each job lost. This is because they depended on the textile worker who was the breadwinner in most cases. Being a developing economy, unemployment is rife in Bangladesh, and the coronavirus pandemic has only made things worse.

Numerous Layoffs in the Textile Industry in India

India has suffered a similar plight and, being a source of ready-to-wear suits and robes, has seen major reductions in global demand for Indian textiles. This has meant that the industry has had to adapt to tough economic times and rely on government aid or bank loans to survive. Unfortunately, not all companies qualify for or are afforded government aid or bank loans. The problem with a huge economy, such as India, is that the government can only do so much for thousands of textile producers.

The Dependence of the Textile Industry on the Global Supply Chain and a Global Workforce

The textile sector is a multi-billion dollar sector globally and depends on an intricate global supply chain of sourcing, refining, production, and textile knitting sectors. All these rely on a global workforce, and when textile factories are not in operation, millions of textile workers lose their livelihoods. Most of these workers are uneducated and come from impoverished backgrounds.

Poverty and How It is Taken Advantage of by the Textile Industry

Apart from working in the textile industry, workers may not have the opportunity or skills to venture into other sectors. Most will end up undertaking menial jobs such as waiting or working in makeshift eateries. More often than not, their families will lack sustenance and are at increased risk for disease due to bad sanitation or living in squalid conditions.