[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

US seeks 40pc value addition requirement, say apparel leaders

The US representatives, during negotiations with the Bangladeshi trade delegation, proposed a 40 per cent local value addition threshold. However, the Bangladeshi delegation is negotiating for a relaxation of this requirement, seeking a lower threshold considering the 'Rules of Origin'. Bangladesh

thefinancialexpress.com.bd

US seeks 40pc value addition requirement, say apparel leaders

FE ONLINE REPORT
Published :
Jul 12, 2025 20:58
Updated :
Jul 12, 2025 20:58

The US representatives, during negotiations with the Bangladeshi trade delegation, proposed a 40 per cent local value addition threshold. However, the Bangladeshi delegation is negotiating for a relaxation of this requirement, seeking a lower threshold considering the 'Rules of Origin'.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan (Babu) said this during a meeting with the Dhaka Reporters’ Unity (DRU) Executive Committee on Saturday afternoon at the BGMEA office in Uttara.

DRU president Abu Saleh Akon and General Secretary Mynul Hasan Sohel also spoke at the discussion.

Talking to Financial Express, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem said the Bangladesh delegation also urged for duty-free market access for apparel made from US cotton to increase imports of US cotton, aiming to reduce the bilateral trade gap.

The apparel leaders made these statements while referring to their discussion with Commerce Adviser Sk Bashir Uddin on Friday night during a meeting with USTR representatives.

BGMEA President said, "We have tried to meet the chief adviser to discuss the US tariff issue, but that did not happen."

“We had a meeting with four other advisers on the day before yesterday, following that, last night we talked with the commerce adviser over the phone in the middle of his meeting with USTR. He wanted to know if they impose a 40 per cent local value addition, will it be possible to do business?

40per cent threshold is not final yet and some other instruments are also under discussion”, BGMEA president said, adding that the government should engage businessmen in such discussions, which will set their future.

BGMEA chief also alleged that one of the government representatives failed to negotiate effectively, wasting two valuable months, before another representative was included in the negotiation process.

He further questioned how the government could ignore the largest stakeholder if it truly intends to address such an important issue.

"Now the government is giving excuses, citing a Non-Disclosure Agreement (NDA)," he added.

"We also raised this issue in the meeting the day before yesterday. While we are negotiating for a reduction in US tariffs, how can the government impose a 2% AIT on cotton imports — one of the major export items of the USA?"

"If this message reaches the US government, they might say, 'You're asking us to reduce the trade deficit by buying more cotton.' Isn't that a contradictory move?" questioned the BGMEA President.

Referring to the commerce adviser, BKMEA president Mohammad Hatem said the negotiations were very fruitful, but some issues will take further discussion at the ministerial meeting.

If the 40per cent value addition requirement is enforced, Bangladesh's woven exports to the US market will be severely affected; however, the knitwear and denim sector will not be affected, he added.​

 

[Saif]

Apparel exports to US rose 14% in FY25

Bangladesh’s garment exporters registered the highest growth in shipments to the United States (US) in the just-concluded 2024-25 fiscal year, thanks to the shifting of work orders from other countries, mainly China.

www.thedailystar.net

Apparel exports to US rose 14% in FY25

Bangladesh's garment exporters registered the highest growth in shipments to the United States (US) in the just-concluded 2024-25 fiscal year, thanks to the shifting of work orders from other countries, mainly China.

Bangladesh shipped $7.54 billion worth of apparel to the US in the last fiscal year, posting a 14 percent year-on-year growth.

With the spike, the share of exports to the US in overall garment shipments edged up nearly one percentage point to 19.18 percent year-on-year in FY25, according to the Export Promotion Bureau (EPB).

"Many American buyers increased sourcing from Bangladesh in the last fiscal year after shipments from Vietnam got stuck. US trade tensions with China also made some buyers source from us," said Shams Mahmud, managing director of Shasha Denims Ltd, a leading apparel exporter.

In FY25, woven garments accounted for the majority of the shipments to the US, the single biggest market for Bangladesh. Exports of woven items grew 13 percent year-on-year to $4.94 billion in FY25.

But knitwear makers' exports soared 15 percent year-on-year to $2.59 billion during the period.

Overall, Bangladesh sent over $39 billion worth of apparel in FY25, posting nearly a 9 percent growth.

The European Union (EU) bought half of the garments sold by the South Asian country, the world's second-largest apparel exporter after China.

In FY25, garment exports to the EU expanded 9 percent year-on-year to $19.7 billion.

Within the EU market, where Bangladesh's goods get duty-free entry, Germany was the biggest destination, followed by Spain, France, and the Netherlands, according to EPB data.

Apart from the US and EU, the UK, Canada, and Japan were the largest markets for apparel in the last fiscal year.

Mohiuddin Rubel, managing director of Bangladesh Apparel Exchange, an initiative to promote local apparel and textiles, said that since the onset of Covid-19, the global landscape has taken unexpected turns, presenting a cascade of new challenges each day.

"Our performance remains robust in the traditional markets, boasting an impressive 84 percent share of our total apparel exports. However, the non-traditional market tells a different story, with our current stake standing at a modest 16 percent."

Exporters define the EU, US, UK, and Canada as traditional markets, while the rest—including Japan, Australia, and India—as non-traditional ones.

According to the EPB, Bangladesh's RMG exports to non-traditional markets increased 6 percent year-on-year to $6.44 billion in FY25.

Rubel said the US economy recovered faster than the EU. Besides, US purchases from China declined, which benefitted Bangladesh.

"We invested in factories and compliance. Now, a lot depends on the resolution of the tariff issue with the US," he said, referring to the government's negotiation with the Trump administration over its plan to impose a 35 percent tariff on Bangladesh's exports.

Mahmud said the worst-affected countries would focus on the EU markets because of Trump's tariffs.

"So, there will be a knock-on effect, and a price war may unfold in the EU market," he said. "In the US, consumer demand is likely to shrink due to the higher import cost. A price war is also likely in the American market."​

 

[Saif]

Chattogram’s garment factories fear fallout from US tariffs

Owners of Chattogram-based readymade garment factories, many of which do business with buyers in the United States, are worried about a US tariff hike to 35 percent set to take effect on August 1.

www.thedailystar.net

Chattogram’s garment factories fear fallout from US tariffs

Apparel exports from Bangladesh reached $39.34 billion in the just concluded fiscal year of 2024-25, data from Export Promotion Bureau and Bangladesh Garment Manufacturers and Exporters Association (BGMEA) shows. US accounts for over 19 percent of the country’s total apparel exports. Photo: Star/file

Owners of Chattogram-based readymade garment factories, many of which do business with buyers in the United States, are worried about a US tariff hike to 35 percent set to take effect on August 1.

They, however, are still hopeful that the Bangladesh government will be able to negotiate a reduction. Otherwise, the future is bleak, they said.

Though the country's RMG sector commenced its journey from Chattogram in early 80s, the number of factories in the port city has dropped in the past decade, with many either shutting down or shifting to Dhaka or elsewhere.

Currently, over 300 factories remain operational in Chattogram.

Around 200 factories take orders directly from buyers or brands, and the others work under subcontracts, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and export processing zones (EPZs).

It is difficult to find accurate data regarding the export volume of the factories in Chattogram. Market insiders opine it is over 9 percent of the total exports.

Apparel export from Bangladesh reached $39.34 billion in the just-concluded fiscal year of 2024-25, data from the Export Promotion Bureau and BGMEA shows.

This was 81.49 percent of the country's total export earnings worth $48.28 billion in the year.

And Bangladesh's garment exports to the US accounted for over 19 percent of total apparel exports.

Market insiders said most of the factories in Chattogram are engaged in business with US buyers.

Asian Apparels Group has 18 readymade garment factories in Chattogram, and 95 percent of its exports are destined for the US market. In 2024, the group's exports to the US market amounted to $300 million.

Deputy Managing Director Sakeef Ahmed Salam opines that Chattogram-based garment factories are more engaged in business with US buyers compared to those in Dhaka.

He said US buyers have already asked them to bear a good portion of the extra tariff on work orders currently under negotiation.

Moreover, many US buyers are not releasing purchase orders for products informed of earlier, the production of which could have started in July or August, as they opted to wait for the final tariff rate, he said.

In the absence of purchase orders, they are not able to start purchasing the required accessories and raw materials, he said.

BGMEA Director SM Abu Tayyab said most of the garment factories in Chattogram are dependent on the US market, and the trade has been running for long.

Last year, Tayyab's factory, Independent Apparels Ltd, exported around $60 million worth of sportswear and kidswear, and 90 percent of it was destined for the US market.

"Even if the US imposes a 30 percent tariff instead of 35 percent, a good number of these factories would not survive," he said.

If the US tariff can be lowered to that for Vietnam, meaning 20 percent, only then will Bangladeshi factories be able to compete, said Tayyab.

"Otherwise, US buyers would shift their orders to Vietnam and even to India, as the sector in the neighbouring country has been developing over the last 10 years," he said.

He underscored the need for reducing the tariff through bilateral talks this week.

Most of the 60 RMG factories located inside Chattogram Export Processing Zone (CEPZ) are more or less dependent on the US market.

Syed M Tanvir, managing director of leading denim exporter Pacific Jeans Group, which has eight factories in the CEPZ, said the factories would surely face an immediate impact.

Bangladeshi garment products would become 35 percent more expensive compared to current rates, he said.

He, however, prefers to wait a bit longer to assess the overall impact until the tariff figures are fixed for other competitive sources like India, Pakistan, Egypt, and Jordan.

Tanvir stressed the need for strategies for the factories to individually deal with their customers and face the challenges in the coming days.​

 

[Saif]

Reducing the costs of just transition for Bangladesh's RMG workers

Climate change is no longer only an environmental phenomenon. It is now the greatest justice challenge of our time. Its worst impacts are suffered by those least responsible, especially low-paid workers in the Global South. In Bangladesh, the ready-made garment (RMG) sector is home to over 4 millio

thefinancialexpress.com.bd

Reducing the costs of just transition for Bangladesh's RMG workers

Nayma Akther Jahan and Haseeb Md. Irfanullah
Published :
Jul 15, 2025 22:54
Updated :
Jul 15, 2025 22:54

Climate change is no longer only an environmental phenomenon. It is now the greatest justice challenge of our time. Its worst impacts are suffered by those least responsible, especially low-paid workers in the Global South. In Bangladesh, the ready-made garment (RMG) sector is home to over 4 million workers, of whom over half are female. These workers find themselves caught between the double forces of climate change and economic transformation, with rising health risks and job insecurity in the face of a global shift towards a low-carbon economy.

In countries like Bangladesh, where the majority of RMG employees work in informal or semi-formal environments, they are especially vulnerable due to the absence of safety nets like healthcare or unemployment insurance. Decarbonisation is necessary to prevent a global disaster. But if it is not planned fairly, it may have negative economic effects. As a recent study by the Ethical Trading Initiative (ETI) showed migration, mental health crises, and child labour have all grown as a result of poorly managed transitions in various contexts. As a high energy consumer, the RMG sector must be part of the solution. However, despite allocating Tk 43,000 crores for environment and climate programs in FY 2025-26, most funds go to infrastructure and adaptation, not worker resilience or green industrial transformation.

A just transition is not only an economic plan, but also a moral requirement. According to the ILO's Just Transition guidelines, if early and inclusive investments are made, the green transition could provide over 24 million jobs worldwide by 2030. Inaction might have disastrous consequences for the county's RMG sector such as lost money, decreased productivity, and a growing gender poverty gap . The RMG industry is making encouraging strides, as seen by the 229 factories that have obtained worldwide green building certifications. However, social fairness and environmental benefits must coexist. For a just transition Bangladesh needs to implement policies that safeguard workers' rights, earnings, and well-being while guaranteeing a sustainable economic future in order to fulfill its climate obligations.

Against this backdrop, to ensure a worker-friendly and inclusive transition, Bangladesh must take four feasible actions.

1. Enhance climate literacy and workers' rights: Government departments, trade unions, and NGOs must collaborate on factory-focused campaign programmes to create advocacy for climate hazards. Information about heat stress, occupational illness, and their rights under the law must be available to workers in understandable language. The programmes must be integrated with the National Adaptation Plan of Bangladesh (NAP, 2023-2050), which already focuses on community-based resilience. As the RMG sector transforms to green production, employees ought to be provided with new skills. Public-private initiatives, such as the Skills for Employment Investment Programme (SEIP), need to be expanded to fields of energy efficiency, circular production, sustainable materials, and waste reduction.

2. Improve workplace health and safety standards: Extreme heat must be officially classified as an occupational hazard in the labour regulations. Regulation reform must impose a minimum set of protections-ventilation equipment, shaded rest areas, emergency medical care, and cooling shelters. The department of inspection of factories and establishments( DIFE) needs a bigger workforce and more robust digital monitoring equipment, and local clinics must be equipped to treat illnesses and injuries related to climate as also recognised in the ILO Guidelines .

3. Mobilise climate finance for factories: Small and medium-sized enterprises in the RMG sector, all of which operate in an informal structure, have limited resources to invest in green technology. A Green Transition Fund under the Bangladesh Climate Change Trust Fund (BCCTF) must be established that provides soft loans, tax benefits, and technical support. As envisaged in Bangladesh NAP, partnership with the global Green Climate Fund (GCF) and development financial institutions will unlock concessional finance and knowledge sharing.

4. Enact fair purchasing practices by global brands: Global brands demand carbon-neutral supply chains, but aren't willing to pay for the transition. Bangladesh must push for enforceable agreements that force brands to pay for the sustainability cost. Equally, while the 2021 International Accord made fire and building safety everyone's business, a new Climate Accord must make green supply chains mean no job cuts or wage repression.

These recommendations align with the current national priorities, our Nationally Determined Contributions (NDC), the NAP, and the expressed focus of the 2025-26 budget on climate resilience. However, institutional coordination, and worker-focused approaches to climate governance are lacking. There is the need to accommodate all these in an inclusive package.

Nayma Akther Jahan is a Lecturer & Research Associate, and Dr. Haseeb Md. Irfanullah is a Visiting Research Fellow of the Center for Sustainable Development (CSD) at the University of Liberal Arts Bangladesh (ULAB), Dhaka.​

 

[Saif]

Direct buying may boost RMG exports

Direct cotton sourcing from US farmers could boost apparel exports to the country amid rising trade tensions and tariff uncertainties, said a Bangladeshi-born American entrepreneur on Thursday. American cotton farmers wield political influence through their Congressional representatives and senato

thefinancialexpress.com.bd

Direct buying may boost RMG exports

FE REPORT
Published :
Jul 18, 2025 10:48
Updated :
Jul 18, 2025 10:48

Direct cotton sourcing from US farmers could boost apparel exports to the country amid rising trade tensions and tariff uncertainties, said a Bangladeshi-born American entrepreneur on Thursday.

American cotton farmers wield political influence through their Congressional representatives and senators from cotton-growing states, said Aswar Rahman, chief executive officer of AmeriBangla Corporation, a platform connecting US farmers and Bangladeshi mills through fair pricing and a transparent supply chain.

He made the statement at a high-level trade meeting held at The Westin Dhaka.

The cotton sourcing process currently involves nine intermediaries from farmers to millers, he said.

But AmeriBangla aims to enable direct cotton imports from American farmers, bypassing the merchant syndicates that dominate global cotton trade, by connecting farmers, ginners, and millers, he explained.

"It could be a strategic alliance between American cotton farmers and Bangladesh's ready-made garment (RMG) sector, which could potentially reshape the sourcing model and trade dynamics between the two nations," said Mr Rahman.

"Bangladesh's future in the US market may hinge on this direct sourcing model," he also said.

"If our spinners and millers adopt American cotton on a large scale, we can align ourselves with powerful agricultural constituencies in the US who have real influence in Congress," he added.

According to him, what makes this partnership unique is the role of American cotton farmers, a politically-powerful constituency often overlooked in international trade discussions.

"If we can bring American farmers to the negotiation table, it will be a game changer," said Mr Rahman. "No one in Washington wants to antagonise their farmers."

Under the proposed framework, American farmers may advocate in Congress - and even directly to President Donald Trump - for tariff relief for Bangladeshi apparels in exchange for guaranteed demand from the country's RMG sector, he said.

He also mentioned that the strategic partnership includes five core elements - a streamlined ordering system for Bangladeshi mills to buy directly from US farmers, permission to establish a bonded warehouse in Bangladesh for duty-free cotton storage, commitment to sourcing the majority of cotton from American producers, tariff advocacy by US cotton farmers on behalf of Bangladeshi exporters, and joint demand generation campaigns in the US market to promote garments made with American cotton.

Starting with the harvest of August 2025, selected Bangladeshi spinners and composite factories are expected to place their first direct orders, said Mr Rahman.

He confirmed that six Bangladeshi companies are already in the process of finalising agreements.

Mohammad Rashed, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, "If they offer country-specific facilities, it may help promote American cotton as its price is higher compared to others. However, the industry will need at least 18 months to fully prepare for direct buying on a large scale."

AmeriBangla has also sought government approval to set up a bonded warehouse in Bangladesh with the capacity to store up to one million bales of American cotton.

The facility would require land equivalent to 13 cricket fields, as well as ensure year-round supply stability and faster access for local spinners.

To build brand value around garments made from American cotton, AmeriBangla plans to open a dedicated showroom in Manhattan, showcasing products labelled "Made with American Cotton, Sewn in Bangladesh".

Mr Rahman cited a recent study that showed US consumers are willing to pay up to 17 per cent more for clothes made with American cotton.

As early as December 2025, major US retailers are expected to receive regulatory incentives to source only American cotton-made apparels.

"We believe there is over 80 per cent chance that the use of US-grown cotton will be encouraged - if not mandated - by year end," Mr Rahman said.

"Bangladeshi exporters must adapt now to retain their competitiveness in the US market," he added.

Bangladesh currently exports over $10.6 billion worth of goods to the US annually, which is growing at an 8 per cent compound annual growth rate (CAGR).

Meanwhile, US cotton sales to Bangladesh stand at over $2 billion annually.

The new sourcing model is expected to significantly increase this figure while helping Bangladeshi exporters maintain preferential access to their top market.

AmeriBangla also urged the Bangladesh government to revise import and warehouse regulations to allow cotton farmers and networking platforms to establish bonded warehouses - a key enabler for a smooth execution of the direct buying model.

"In this chaos, there is opportunity," Mr Rahman noted.

"Opportunities multiply as they are seized, and this partnership could be the one that secures our industry's future in the US," he added.

Among others, BKMEA Director Minhajul Haque, Ha-Meem Group Director Sajid Azad and CEO Muhammad Amin, Hoorain Fabrics Ltd Chief Marketing Officer Abdul Hakim, True Group Marketing Director Tareq Mamun Chawdhury, Divine Group Head of Business Development Khurshid Alam, Marubeni Group Deputy General Manager Md Arifuzzaman, and AmeriBangla Senior Advisor Brigadier General (retd) Ali Ahmed Khan were present at the event.​