Pakistani investors in Bangladesh’s textile sector are increasingly concerned due to recent turmoil and unrest in the country, which mirrors the uncertainty experienced in Pakistan. The potential for martial law in Bangladesh could exacerbate instability, affecting their investments.
Previously, many Pakistani textile entrepreneurs relocated their operations to Bangladesh to capitalize on lower production costs, favorable trade agreements, and improved infrastructure. Bangladesh, the world’s second-largest apparel exporter after China, has been gaining market share, particularly as China faces Western sanctions. Pakistani businesses, especially in home textiles and ready-made garments, have shifted their operations to Bangladesh’s special export processing zones to cut production costs by nearly 50%.
Notable Pakistani companies such as Soorty Enterprises, which invested $35 million in a garment factory employing around 6,000 Bangladeshis, along with Interloop Limited, Pak Denim Limited, Crescent Textile Mills, Gul Ahmed Textile Mills, Kohinoor Textile Mills, Al-Karam Textile Mills, Nishat Mills Limited, Artistic Milliners, and Masood Textile Mills, have all expanded or relocated their operations to Bangladesh. They have been drawn by the country’s low labor costs and advantageous trade agreements with the EU and the US, which offer better market access and lower tariffs compared to Pakistan.
Textile leader Balwani noted that while companies like Soorty and Interloop are active in Bangladesh, they have faced resistance during Sheikh Hasina’s long tenure, particularly due to her pro-India policies.
He expressed hope that a new military government might foster a more favorable environment for Pakistani investors by respecting anti-Indian sentiments in Bangladesh.
MI Khurram, a prominent knitwear and yarn exporter, indicated that the current power and energy costs in Pakistan make local operations untenable. If goodwill towards Pakistan increases following a potential military takeover, many mills may prefer to relocate their operations to Bangladesh.
While smaller Pakistani textile units had relocated to Bangladesh 15 years ago, they faced challenges due to more favorable public opinion and government policies towards Indians. Larger enterprises have since moved with more strategic planning into export processing zones. Despite this, the total investment from Pakistani textile entrepreneurs remains significantly lower compared to the top 10 local textile groups in Bangladesh.
