Although small, the industrial sector contributes significantly to export receipts; it also provides employment and a market for cash crops. Jute products--mainly burlap sacking and carpet backing for export--and cotton textiles for domestic consumption predominate. Since the early 1980s production of ready-made garments for the US market has grown rapidly. Bangladesh is the fifth largest supplier of cotton apparel to the United States, and it has begun exporting to West European markets. Breaking up ships for scrap, using methods that are highly labor intensive, now meets most of Bangladesh's domestic steel needs. Other industries include sugar, tea, leather goods, newsprint, pharmaceuticals, and fertilizer production. The industrial (and foreign exchange) impact of the discovery of modest reserves of oil in 1986 remains to be assessed. 

The government continues to court foreign investment. To this end, the United States and Bangladesh signed a bilateral investment treaty which took effect in 1989. Bangladesh also has established an export processing zone (EPZ) in Chittagong and plans to create additional zones. The government has offered special incentives and simplified procedures for potential investors.