The Bangladesh Textile Industry has a long history of many centuries and has been seen as the part of an economy of undivided India and later on of Pakistan.

It was only after the liberation of Bangladesh that the Textile Industry had to be considered independently to meet the needs of the large population. Until 1990s the Textile Industry was basically meeting the local needs.

Following the increase in the export of readymade garment industry, the textile industry started catering to the export market in the 1990s. The Government Policy in Bangladesh always favored the backward linkage industry. However, the most dynamic policy was the announcement of Textile policy in 1992-1994 when textile was declared as a Thrust Sector and an alternative cash assistance of 25% given to garments exported using local fabric to compensate for the benefit/advantage and subsidies given by other countries and also to encourage the local backward linkage industry. The aims of this policy were:

- To increase the value addition of the RMG export this was at that time 25% of the FOB value.
- To retain higher level of foreign currency within the country.
- To reduce lead-time for export.
- To generate employment and other economic activities.
- To give an overall price advantage to the export of the garment industry.

Growth and Current Status:
The export of readymade garment is in the region of US$ 5.00 billion annually. Initially the export was based on imported fabric; however, the local fabric has been making steady progress in the last few years. Currently exports using local fabric are in the region of US$ 2.00 billion of which US$ 1.4 billion is retained within the country. This is a substantial contribution of the textile and garment industry to the national exchequer.

In addition, the domestic market has been growing both in consumption and in population. In the past when there were a few small and medium scale mills, the domestic market was dependent on imported yarn and fabric. Currently the local industry meets over 90% of the domestic consumption. A lot of products of very specialized nature required to meet the growing and diversified demand of the consumers are now being produced and mills are working together with designers/artisans producing such products.

The entrepreneurs of Bangladesh who were hitherto not familiar with the export trade as well as the level of quality consistency, delivery, commitments, etc. took this as a very strong challenge and have transformed themselves from a local seller to an exporter of international standard. In the process they have developed quality control culture, achieved high productivity, met production and delivery schedules and have been continuing efforts to fit into the profile of a preferred supplier to meet the ever increasing/changing demands of international market.