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BD’s revealed comparative advantage in clothing is very high: Report

The revealed comparative advantage (RCA) of the clothing industry of Bangladesh is very high compared to its major global competitors like China, Vietnam and India.

A report published in Mint on Monday unveiled the scenario. Mint is a leading business daily of India.

The report showed that the RCA of Bangladesh in the apparel industry was around 24 points in 2000, which increased to 29 in 2015.

“Bangladesh’s high revealed comparative advantage in garments simply reflects the growing share of the garment industry in its overall export basket,” said the report.

At the same time, the RCA of India in the apparel industry declined to 2.38 in 2015 from 4.47 in 2000.

The RCA is a measure of the relative market share computed as the ratio of a country’s share in world exports of a particular item to that of the country’s overall share in world exports of all items.

China also witnessed its RCA fall in the same period. Its RCA came down to 2.65 in 2015 from 4.60 in 2000.

Vietnam’s RCA in the clothing industry improved marginally during the period under review. It was 4.00 in 2000, which stood at 4.68 in 2015.

The report also said that since India’s liberalisation more than a quarter century ago, India’s share in global exports of textile and footwear has declined even as smaller economies such as Bangladesh and Vietnam have seen their market shares rise sharply.

“In the US market itself, India’s apparel exports accounted for only 4% of the US’s overall apparel imports in 2015, while Vietnam, Bangladesh and China accounted for 12%, 6% and 37% market-shares respectively,” it added.

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