The apparel apex body, BGMEA, has identified 51 readymade garment (RMG) items having potentials in the international market, sources said.
They said the entrepreneurs could invest to manufacture the diversified items for widening their product base and grabbing a larger share in the growing global market.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) chose 31 items with potentials for next five years and 20 others with potentials for next 10 years.
The BGMEA initially selected the items based on global clothing imports, Bangladesh's annual export, nature of complexity to make the items and their future potentials, and the industry's readiness for expansion, they added.
The global market for these two groups of products would be worth US$ 132 billion and $ 54 billion respectively, according to a BGMEA's presentation at a recent meeting.
Bangladesh exported products worth $ 7.1 billion in 2018 from the 31-item group while $ 1.2 billion from the 20-item group.
The trade body has taken the initiative to identify the products with market potentials due to the sector's large dependence on five major products like t-shirt, sweater, trouser, jacket and shirt, said the sources.
The five items contributed about 73 per cent or US$ 24.8 billion of the country's total exports earnings of US$ 34.13 billion from the apparel items in the last fiscal year, according to BGMEA data. Most of the RMG items (74.14 per cent) are made of cotton.
"The 31 identified items are either made of cotton where Bangladesh has strength or non-cotton items having similar features of the traditional items," according to the BGMEA presentation.
These items - including 19 for women and girls while 17 cotton and 14 non-cotton - are relatively less complicated to manufacture, so the cost of diversification is less, it said.
The BGMEA also selected 20 other items where entrepreneurs could invest in next 10 years, according to the sources.
Out of these items, 10 are for women and girls and all are made of non-cotton fibre like manmade fibre (MMF), vegetable and other artificial fibres.
The trade body also selected some products for its traditional US (two items) and EU (10 items) markets.
The potential products for diversification in the US and EU markets have been selected as per the products' share in Bangladesh's export, US and EU's global import and annual import value of more than $ 3.0 million from Bangladesh to these two destinations.
When asked, BGMEA president Dr Rubana Huq said since 2014 to 2018, Bangladesh lost 1.61 per cent unit value of its apparel on CAGR basis.
"This signifies Bangladesh's lack of capacity in value addition whereas the priority is to go for high-end market," she said.
The share of global trade of cotton-based apparel is around 35 per cent which is shrinking at 0.5 per cent CAGR between 2007 and 2017.
The share of MMF-based apparel is around 45 per cent of global trade which is growing at 5 per cent CAGR in the same period.
In 2017, global trade of MMF-based apparel was $ 150 billion, where Bangladesh had 5.0 per cent share of it as compared to Vietnam's 10 per cent.
Only 27 out of 430 local spinning mills are based on synthetic and acrylic fibre and rest are cotton spinning mills.
Bangladesh imported 2,052,000 tonnes of fibre in 2018 while 93.57 per cent is cotton based, Ms Huq noted.
"Due to changes in lifestyle, consumers are looking for products which are easy to care thus raising demands for MMF-based products," the BGMEA president said.
Citing a PWC report, she said, rise of the 'Fast Fashion' is reducing the lead time of order delivery.
The 'Fast Fashion' category has grown at 20 per cent CAGR between 2015 and 2018 whereas the global apparel retail has grown at 4.0 per cent to 5.0 per cent CAGR during the same period of time, PWC report said.
Since any preferential regime by EU for the middle income countries require 'double transformation' process as per its GSP rules of origin, it is important for Bangladesh to consider more investments in primary textiles, especially in woven and non-cotton sectors, Ms Huq said.
The diversification of products is the demand of time to get better price and sustainability of the industry, she added.
When asked, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) vice president Mohammad Hatem termed lack of skilled manpower and dependence on imported fabrics as major problems in going for high-end products manufacturing.
He suggested further strengthening the government's skill enhancing programme to generate skilled workers and allow foreign direct investment in fabric manufacturing here in Bangladesh.
Local manufacturers will be encouraged to invest in high-end products when there will be some expertise, he noted.
Center for Policy Development (CPD) additional research director Dr Khandaker Golam Moazzem said that the government should restructure its existing incentive package given to the sector without reducing the amount to help boost diversification in the RMG sector.
Incentives could be given to upgrade machinery or modern technologies, value added items manufacturing or diversified products, he said.
Echoing Mr. Moazzem, the BKMEA leader also said the incentives should be given to manufacturers who want to go for products diversification to reduce dependency on the few items.