Economic Impact, Challenges, and Recommendations of Ready-Made Garment (RMG) Industry in Bangladesh

Background: The Ready-Made Garment (RMG) industry is a vital contributor to Bangladesh’s economy, generating 8.29% export revenue, and employment of over 5 million workers. This sector plays a significant role in poverty reduction and gender empowerment. However, challenges such as unsafe working conditions, low wages, environmental issues, and inadequate technological innovation persist.Purpose: The study aims not only to explore the RMG sector’s impact on Bangladesh's economy but also to highlight the challenges and recommendations for sustaining this sector’s global competitiveness. Design/Method/Approach: A mixed-method approach was used, integrating a systematic literature review (SLR) with the PRISMA model and a comparative analysis to obtain actionable insights. Findings/Result: The RMG sector has made achievements like workers’ pay scale and green factory initiatives, but several significant gaps such as workers’ training, export diversification, and technology adoption. Additionally, major global concerns such as environmental sustainability, excessive water consumption, and discharge of chemicals need to be addressed. Conclusion: The contribution of this sector to Bangladesh’s economy is remarkable but must address challenges in the RMG sector. Strategic actions are necessary to ensure long-term competitiveness and growth. Originality/value (State of the art): This review paper consolidated the RMG sector’s contribution, challenges, and future directions. It also highlighted actionable recommendations for export diversification and how to address the challenges. Keywords: Gross Domestic Product (GDP), Ready-Made Garment (RMG), Green Factory, environmental sustainability, technological innovation