[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Home textile exporters fear decline in purchase orders

Home textile exports rebounded slightly, but higher reciprocal tariffs in the US market and declining competitiveness worry Bangladeshi manufacturers about future order flow.

en.prothomalo.com

US reciprocal tariff
Home textile exporters fear decline in purchase orders
Shuvonkar KarmokarDhaka
Published: 19 Jul 2025, 08: 17

Over 90 per cent of the exports and imports take place though Chittagong Port. Prothom Alo

Home textile has long been among the top five export products of Bangladesh. After the Covid-19 fallout, the sector became the country’s second-largest export earner in 2021–22 fiscal year.

However, rising inflation due to the Russia-Ukraine war dealt a heavy blow to the industry, resulting in two consecutive years of declining exports. In the 2024–25 fiscal year, the sector showed a slight recovery.

According to the Export Promotion Bureau (EPB), Bangladesh exported home textile products worth USD 870 million in the last fiscal year, up by 2.42 per cent from the previous year.

Like the apparel sector, the United States remains the single largest market for home textile exports, accounting for nearly 17 per cent of total shipments last year.

The United States recently imposed an additional 35 per cent reciprocal tariff on Bangladeshi products, set to take effect from 1 August. This is on top of a 10 per cent reciprocal tariff already in place for goods from all countries since three months ago.

Negotiations are underway between Dhaka and Washington to reduce the new 35 per cent tariff.

Against the backdrop, home textile traders are fearing a significant drop in orders from the US market if the additional tariff is not slashed. According to them, Bangladesh has already lagged behind in home textile competitiveness due to different issues, including sharp increases in gas prices, and high-interest bank loans. Now, even a 5 per cent higher reciprocal tariff compared to competitors would bring down purchase orders from the US, which could ripple into the European market as well.

Home textile products include bed sheets, pillow covers, curtains, cushions, and terry towels.

Bangladesh currently exports these items to 131 countries, while the major markets are the US, India, Germany, France, the UK, and Canada. Although the sector has around 150 factories, only 50–60 are now exporting products. Even among operational units, many are struggling with low order volumes.

Shamsuddin Towels has been involved in home textile exports since 1990. Located in Feni BSCIC (Bangladesh Small and Cottage Industries Corporation), the factory has a monthly production capacity of 70 tonnes of towels. Due to a lack of orders, around 40 tonnes of its capacity remains idle each month.

“After the 10 per cent reciprocal tariff took effect in April, our US clients began reducing orders,” said Moinuddin Ahmed, the company’s managing director. “If the reciprocal tariff is not brought down from 35 per cent, we will have to remain satisfied with the EU market only.”

Following the pandemic, demand for home textiles surged. Bangladesh’s exports jumped from USD 760 million in 2019–20 fiscal year to USD 1.62 billion in FY 2021–22. But the Russia-Ukraine war reversed the momentum, and exports declined in FY 2022–23.

According to the EPB data, Bangladesh exported USD 150 million worth of home textile products to the US market in FY 2024–25.

Speaking to Prothom Alo, M Shahadat Hossain, former chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA), said, “Last year, there was no export from my own factory for one month and 23 days due to gas shortage. The gas supply has slightly improved recently, but the reciprocal tariff issue now worries the businesses. If Bangladeshi goods face even a 2–3 per cent higher tariff than our competitors, our US exports will fall sharply.”​

 

[Saif]

Bangladesh’s apparel exports to the EU rise in January-May

The export of readymade garments from Bangladesh to the European Union experienced robust growth of 17.8 per cent to $8.97 billion in the first five months of this year, according to Eurostat, the statistical office of the EU...

www.newagebd.net

Bangladesh’s apparel exports to the EU rise in January-May
Moinul Haque with Saddam Hossain 20 July, 2025, 00:03

New Age file photo

The export of readymade garments from Bangladesh to the European Union experienced robust growth of 17.8 per cent to $8.97 billion in the first five months of this year, according to Eurostat, the statistical office of the EU.

The earnings from the EU, the largest export destination of Bangladeshi exporters, were $7.61 billion in the January-May period of 2024.

Knitwear remained the country’s leading product category, increasing 20.2 per cent to $5.18 billion, while woven exports grew by 14.9 per cent to $3.79 billion.

During this five-month stretch, Bangladesh also outperformed China in knitwear shipments to the EU.

However, the RMG export witnessed a sharp decline of 10.5 per cent to $1.43 billion in a single month of May of this year, which was $1.59 billion in the same month of 2024.

According to the Eurostat data, the region imported RMG items worth $36.82 billion in January-May of 2025, which was 12.3 per cent higher than $32.79 billion in the same period of 2024.

During the period, knitwear imports increased by 14.7 per cent to $18.44 billion, while woven apparel grew by 10 per cent to $18.38 billion from the region.

The single-month drop of Bangladesh in May 2025 contrasted with the robust growth seen earlier in the year, including a remarkable 60.8 per cent surge in January.

Industry insiders said that the decline might be due to inventory adjustments or a softening in demand for Bangladeshi garments across EU markets.

Among the other notable players, China, the EU’s largest apparel supplier, continued its recovery, with total exports rising 17.1 per cent year-on-year to $9.04 billion in the January–May period.

Knitwear exports led the growth, increasing by 24.3 per cent to $4.67 billion, while woven exports rose by 10.4 per cent to $4.37 billion.

India, meanwhile, posted the highest growth among top suppliers, witnessed a 19.1 per cent year-on-year growth to $2.38 billion in the first five months of 2025.

This consistent monthly performance underscores India’s growing appeal as a diversified sourcing destination for EU buyers.

Vietnam’s apparel exports to the EU increased 15.7 per cent to $1.69 billion during the January–May period.

Pakistan posted a 20 per cent rise in exports, reaching $1.63 billion, with knitwear and woven apparel growing by 20.5 per cent and 19.6 per cent respectively.

Cambodia saw the fastest growth, with exports soaring 30.3 per cent to $1.77 billion.

In contrast, Turkey was the only major supplier to register a decline in the first five months of the year.

Its apparel exports to the EU fell by 5.8 per cent to $3.59 billion, reflecting possible supply-side constraints or weakening demand for Turkish garments in the European market.

Speaking to New Age, Inamul Haq Khan, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said that the scenario of exports and orders are normal.New age products

‘Most probably, the holidays of Eid-ul-Fitr affected the export of May. We are in good position at EU and hopefully, we could sustain it,’ he added.

He also stated that the factories are receiving sufficient purchase orders, which suggests promising potential for the coming years.

‘Even we are optimistic about US market despite tariff slam,’ he added, saying that the buyers have trust on Bangladesh’s efficiency, capacity, and ethical manufacturing.

In 2024, Bangladesh exported RMG items worth $19.77 billion, up from $18.85 billion in 2023, according to Eurostat data.​

 

[Saif]

Bonded warehouse needs automation for expansion and efficiency

Expansion of the existing bonded warehouse facility for export-oriented industries has been under discussion for quite some time. Given its pivotal role in ensuring uninterrupted availability of raw materials for manufacturing export goods, the importance of bonded warehouse cannot be overstated. O

thefinancialexpress.com.bd

Bonded warehouse needs automation for expansion and efficiency

Wasi Ahmed
Published :
Jul 23, 2025 00:11
Updated :
Jul 23, 2025 00:11

Expansion of the existing bonded warehouse facility for export-oriented industries has been under discussion for quite some time. Given its pivotal role in ensuring uninterrupted availability of raw materials for manufacturing export goods, the importance of bonded warehouse cannot be overstated. Over the decades, the system has served as a crucial pillar for the country's export growth, especially for the readymade garments (RMG) sector. However, despite its clear merits, the system has also shown vulnerabilities that call for significant reforms-chiefly, in the areas of management, transparency and oversight.

In this context, recent newspaper reports indicate that the government has renewed its interest in digitising the bonded warehouse system. Preparatory steps have reportedly been taken to this end. Years ago, the National Board of Revenue (NBR) had earlier formed a committee to propose amendments to relevant sections of the Customs Act to support automation of bond management. The committee submitted its report, suggesting a legislative and regulatory framework necessary for full-scale automation.

The NBR first undertook a project to automate the bonded warehouse system in 2017, originally targeted for completion by June 2021. Due to unsatisfactory progress, the project's timeline was extended until June 2023. However, whether the implementation has kept pace with the extended timeline remains unclear.

The bonded warehouse facility in Bangladesh emerged as a substitute for the Duty Drawback system in the late 1980s. Its inception, though promising, was accompanied with concerns about operational efficiency and susceptibility to misuse. Primarily introduced to support the garment sector, the system enabled exporters to import raw and packing materials without paying customs duties upfront, provided these materials were used in the production of exported goods. This provision significantly eased cash flow constraints for exporters and allowed them to remain competitive in global markets.

Along with back-to-back Letters of Credit (L/Cs), the bonded warehouse system helped transform Bangladesh's apparel industry into a global export powerhouse. Yet, from the beginning, the system lacked robust mechanisms to prevent abuse. Customs officials were supposed to maintain a 'passbook' that recorded all imported materials and tracked their subsequent use in exports. In theory, this was to ensure both accountability and transparency. In practice, however, these objectives have often not been realised.

Over the years, the bonded warehouse facility has been dubbed by critics a "happy hunting ground" for unscrupulous actors. Despite the existence of rules and oversight mechanisms, allegations persist that raw materials imported duty-free are frequently diverted to the local market. The pilferage not only compromises the integrity of the export system but also creates unfair competition for domestic producers.

It is against this backdrop that the push for digitising the bond management process has gained urgency. Automation is expected to bring the much-needed transparency, reduce manual errors, and curtail opportunities for manipulation. Nevertheless, reports until recently suggested that progress on the automation front remained slow and fragmented. The involvement of multiple stakeholders-exporters, the Bangladesh Export Processing Zones Authority (BEPZA) and the Bangladesh Bank (BB)-adds layers of complexity to the implementation process.

Although the RMG sector continues to be the primary beneficiary of the bonded warehouse facility, there is a compelling case for extending this facility to other prospective export-oriented sectors. Industries such as pharmaceuticals, leather, frozen foods and light engineering also rely heavily on imported raw materials. Many of these sectors have been long-time aspirants for inclusion under the bonded system, as it would significantly reduce their cost burden caused by long lead times and high working capital requirements.

In this context, automation could serve as a game-changer. A digitised bond management system would not only curb misuse but also build confidence in the integrity of the process, encouraging the NBR to widen its scope. More sectors coming under this umbrella would ultimately strengthen the country's overall export base.

However, transitioning from a largely manual system to a fully digital one will not be without its challenges. Given the deeply entrenched manual processes, teething problems are to be expected. These may include resistance from users unfamiliar with digital tools, gaps in digital literacy and the need for strong coordination among various government and private stakeholders.

To mitigate these challenges, a well-structured trial phase is crucial. Rather than adopting a piecemeal approach, the authorities should consider piloting the system on a limited scale. This would allow time to identify bottlenecks, collect feedback, and make necessary adjustments before a broader rollout. Effective training and capacity building for all stakeholders-especially customs officials and exporters-will also be essential to ensure a smooth transition.

Looking forward, the government must treat the automation of the bonded warehouse system as a priority reform. With Bangladesh set to graduate from its Least Developed Country (LDC) status and diversify its export base, efficient and transparent export facilitation mechanisms will be vital.

By embracing digitisation and expanding the scope of the facility to emerging export sectors, the country can further enhance its global trade competitiveness and lay the foundation for a more inclusive and robust export regime.​

 

[Saif]

Apparel exporters feel pricing pressure from European buyers

Bangladeshi apparel exporters are getting under fresh pricing pressure from European buyers under shadows of a predeclared steep US tariff hike as they increasingly shift focus to the European Union in quest of new orders to fill production gaps, industry-insiders say. Most US buyers are refrainin

thefinancialexpress.com.bd

US tariff hike begins to bite before time
Apparel exporters feel pricing pressure from European buyers
Most US buyers pause in placing new orders amid tariff uncertainty

Jasim Uddin
Published :
Jul 26, 2025 23:32
Updated :
Jul 26, 2025 23:32

Bangladeshi apparel exporters are getting under fresh pricing pressure from European buyers under shadows of a predeclared steep US tariff hike as they increasingly shift focus to the European Union in quest of new orders to fill production gaps, industry-insiders say.

Most US buyers are refraining from placing new orders due to the uncertainty surrounding the potential tariff rises, prompting manufacturers to turn more actively to the EU market.

Industry people have said European buyers are taking advantage of the situation, attempting to lower product prices as thousands of Bangladeshi exporters approach them in a scramble for orders.

"The share of orders from US buyers has fallen to about 50 per cent. To bridge this gap, apparel exporters are now exploring opportunities with EU buyers," says S.M. Majedur Rahim, Director at Giant Group.

"Even when US buyers are placing orders, the volumes are small. Some have already offered lower prices for repeat orders, citing tariff pressure. It's unfair to expect exporters to bear the cost of tariffs," he adds.

Major EU retailers such as H&M and Inditex -- who also have significant business in the US -- have reportedly reduced their order volumes by 10 to 20 per cent out of fears surrounding the oncoming US tariffs.

"There's growing uncertainty among buyers with exposure to the US market regarding the outcome of ongoing tariff negotiations. A 35-percent reciprocal tariff on Bangladeshi exports to the US is set to take effect from 1 August," says Majedur Rahim.

"European buyers are viewing this as an opportunity to renegotiate and reduce apparel prices -- even some have already done so," he further notes.

According to data from the National Board of Revenue (NBR), 2,377 Bangladeshi firms exported to the US in FY25. Of these, 801 depend on the US for more than 50 per cent of their total exports, making them particularly vulnerable.

Collectively, these companies exported $6.62 billion worth of goods globally in the last fiscal year (FY2024-25), of which $5.05 billion -- or 58 per cent of Bangladesh's total exports -- were to the US. Bangladesh exports nearly $10 billion worth of goods to the United States annually, including apparel, leather, plastic, and agro-products.

EU buyers trying to capitalise on tariff pressure: "One of my buyers from the Netherlands, who used to purchase garments at $3 per unit, has now offered a price that is 25-30-cent lower per unit, citing Trump-era tariff policies," said Fazlee Shamim Ehsan, CEO of Fatullah Apparels.

"I couldn't accept the order at that price. The total value of the order was \$750,000. Losing the deal has made it difficult to keep the factory running," he added.

The United States is the single-largest export destination for Bangladeshi garments. However, exporters had earlier warned that the impact of US tariff hikes could spill over into Europe -- the largest trade bloc.

"Due to the new US tariff policy, inflation has already risen on that market, and buyers have started reducing their apparel orders," Ehsan observed.

He further noted, "The ripple effects of the new US tariffs have begun to influence European buyers as well. Some of them are now offering lower prices than before."

When US-bound RMG exports suffer, it will impact other markets as well, since buyers often source from one country for multiple destinations, says Shovon Islam, Managing Director of Sparrow Group, adding: "The consequences will cascade."

Echoing Shovon's concerns, the country manager of a European apparel brand, speaking on condition of anonymity, said, "If the tariff issue is not resolved in Bangladesh's favour, it could reduce our business opportunities here."

He further stated, "Although the US market accounts for less than 10 per cent of our total sales, it would no longer be a viable business case for us to produce goods for them from Bangladesh. We may have to consider alternative sourcing options."

Traditionally, he added, it takes at least three years to develop a vendor.

The head of business development at PDS Group-the largest multinational buying house in Bangladesh-also speaking on condition of anonymity, said, "Some of our EU customers are now asking for price reductions on new orders."

He added that EU buyers are taking advantage of the situation, being aware of the global market scenario and the installed capacity of the Bangladeshi apparel industry.

Officials at the buying house further noted that orders from some promising non-traditional markets -- such as India and South Korea -- are also shrinking. This is due to factors that include non-tariff barriers in India and local political as well as global economic challenges in South Korea.

Exporters also fear tariff impact could hurt market competitiveness.

President of BGMEA Mahmud Hasan Khan Babu says that if an additional 35-percent tariff is imposed, US buyers are likely to shift to alternative sourcing destinations unless Bangladeshi exporters agree to offer discounts.

However, entrepreneurs argue that offering a 35-percent discount would make it extremely difficult to sustain business operations.

The BGMEA President further states, "If Bangladesh faces higher tariff rates than countries like Vietnam, India, and Pakistan, it will not bode well for our export sector."

The main concern for Bangladeshi apparel exporters is that rival countries such as Vietnam, Indonesia, India and Pakistan enjoy significantly lower tariff rates on the US market.

As a result, Bangladesh risks losing work orders to these competitors, potentially putting millions of jobs at risk and raising fears of labour unrest in the sector.

Currently, Bangladesh exports to the US at an average tariff rate of 15.5 per cent. If the proposed 35-percent reciprocal tariff is finally imposed, the total tariff burden would rise to an uphill 50.5 per cent.​

 

[Saif]

Problems facing textile mills

Any major industry develops concurrently allowing the opportunity of growth of allied or backward linkage industries. The readymade garment (RMG) industry has also been behind the emergence of such source industries. Textile mills in this country had seen many ups and downs and before RMG took off,

thefinancialexpress.com.bd

Problems facing textile mills

Editorial
Published :
Jul 29, 2025 00:23
Updated :
Jul 29, 2025 00:23

Any major industry develops concurrently allowing the opportunity of growth of allied or backward linkage industries. The readymade garment (RMG) industry has also been behind the emergence of such source industries. Textile mills in this country had seen many ups and downs and before RMG took off, their fortunes plummeted. In fact, local textile mills made a turnaround when they started supplying raw materials like knit fabric and woven fabric to the country's burgeoning RMG industry. Now, the happy days seem to be over with local textiles mills failing to meet the RMG demand due to a number of critical factors. Production disruption is certainly the number one issue. But the mills are not doing it deliberately; it is the direct consequence of crisis of natural gas. They are helplessly looking at the declining orders for their materials and growing import from other countries.

In such an uncertain and to some extent uneconomic environment, import of knit fabric has surged by 32.18 per cent to 0.51 million tonnes in the last fiscal year. Similarly, import of woven fabric also rose by 16.12 per cent to 0.62 million tonnes in the previous fiscal of 2023-24. Yarn import also saw a rise by 13.35 per cent. It is also interesting that the country also imported 8.35 million bales of cotton last fiscal compared with 7.75 million bales in the fiscal 2023-24. This is an indication that the mills had their preparation to go about the business as usual but circumstances beyond their control have suddenly disrupted the situation. The local textile mills have also been facing another adversity in the form of a slash in cash incentives. According to the president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), cash-incentive support is virtually non-existent and exporters feel discouraged to claim the facility involving a lengthy process, not to mention the 'harassment'.

Business does not tolerate administrative impudence in this regime of global trade. There are alternative sources available. That exactly has happened and the buyers, moreover, have insisted on import of fabrics from China because of reliability in timely supply. In this context, India's aggressive 'dumping rate' on its fabrics can be an example of how a government promotes the business of that country. It is quite clear that at a crunch time, some desperate measures were needed to promote businesses. Here the government is taking the reverse course.

Now both China and India are set to take away orders for fabrics ---both woven and knit---from Bangladesh textile mills. Here the foreign buyers' opinions are also proving decisive. Clearly, the prospect for the local textile mills does not look particularly bright. At a time Trump's reciprocal tariff has thrown the world's business in turmoil, there was a need to be on guard against any lapses at the domestic level. Now the textile mills may have to pay a heavier price than they would need if only a steady fuel supply could be ensured. It is the time when the challenge before industries is to survive no matter if the profit is low. If business suffers to the point where garment factories move to foreign countries for their source materials, it also bodes ill for the country's main export good.​