FORWARD LINKAGE:
Forward linkage occurs when the products of one industry is used as the raw material of another industry. It can involve an industry in primary production linking with an industry in secondary production. Forward linkage is when one industry is producing the raw material for another industry.
Local production of yarn and fabrics to support the RMG industry is only necessary condition for successful backward instigation. Meeting this condition is not sufficient. To make the backward integration economically viable, the final product. Namely, the RMG must be exported at prices that the markets will accept and at the same time the company will make at least normal profit.
This means that backward integration needs to supported by forward linkages. Forward linkages are the integration of a chain of functions necessary to continually create / diversify markets to sell/export finished products at optimum profits. Forward linkages include total marketing functions. In case of RMG industry, it demands taking over major marketing activities, At least to greater extent, by the Bangladeshi manufacturers’ exporters.