[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

BGMEA seeks clarity on US raw material usage formula for duty waiver

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Wednesday sought clarification on the formula for calculating US raw material usage and mechanisms to ensure transparency and traceability throughout the supply chain to get the recently announced duty waiver on American raw

thefinancialexpress.com.bd

BGMEA seeks clarity on US raw material usage formula for duty waiver

FE Online Report
Published :
Aug 13, 2025 22:22
Updated :
Aug 13, 2025 22:22

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Wednesday sought clarification on the formula for calculating US raw material usage and mechanisms to ensure transparency and traceability throughout the supply chain to get the recently announced duty waiver on American raw materials usage.

It also discussed the possibility of establishing a warehouse near Chattogram Port to expedite cotton imports from the United States.

The requests were made when a delegation from the US Embassy in Dhaka met with BGMEA President Mahmud Hasan Khan at his BGMEA Complex office in Dhaka city, according to a statement.

The US Embassy delegation included Labour Attaché Leena Khan, Foreign Commercial Service Attaché Paul G Frost, Foreign Agricultural Service Attaché Erin Covert, and Economic Officer Richard Rasmussen. From BGMEA, Senior Vice President Inamul Haq Khan, Vice President Md Rezwan Selim, Vice President (Finance) Mijanur Rahman, Vice President Vidiya Amrit Khan, and Directors Mohammad Abdur Rahim, Faisal Samad, and Sheikh Hossain Muhammad Mustafiz attended the meeting.

A key topic of the meeting was a recent US executive order that allows garments exported from Bangladesh to be proportionately exempt from a newly imposed additional 20 per cent duty, provided that at least 20 per cent of the raw materials used in these garments are sourced from the United States, the statement added.

Welcoming the initiative, BGMEA President Mahmud Hasan Khan said that the Bangladesh apparel industry is highly interested in utilising this facility.

The meeting also discussed the possibility of setting up the warehouse as a Bangladeshi initiative, a US initiative, or a joint venture, saying that it would help reduce lead time in the garment industry.

In addition to cotton, the BGMEA leaders expressed interest in importing man-made fiberes such as polyester and nylon from the United States (if produced by the US textile sector). They requested more detailed information on this from the US Embassy.

During the meeting, various issues of mutual interest were discussed, with a particular focus on strengthening bilateral trade relations between the United States and Bangladesh, centring around increasing exports of Bangladeshi ready-made garments (RMG) to the US market and enhancing overall economic cooperation.

In response, Foreign Commercial Service Attaché Paul G Frost said they would talk to relevant US government departments and provide further details.

The meeting also discussed potential collaboration between BGMEA and the US Cotton Council.

Paul G Frost mentioned that the embassy would discuss this with the US government's textile department and provide feedback to BGMEA.

Issues regarding the domestic gas and electricity situation were also discussed.

BGMEA leaders expressed hope that Bangladesh would be able to import LNG gas from the United States in the future. The issue of labour rights also received due attention during the meeting.

BGMEA President Mr Khan said that maintaining stable labour conditions in the garment sector is a top priority.

He informed the US delegation that since taking office, his board has engaged in dialogue with 81 workers' federations to establish harmonious industrial relations.

He also briefed the delegation on the progress of legal reforms aimed at ensuring labour rights and welfare.

The US delegation emphasised that aligning Bangladesh's labour laws with international standards is an international expectation, supported by the ILO, the European Union, and others.

BGMEA leaders stressed the importance of maintaining close communication with the US Embassy on labour-related matters to ensure clarity and avoid any misunderstandings.

The US side encouraged BGMEA to participate in SelectUSA, a major US investment promotion event scheduled to take place in May 2026, as an avenue to expand exports and build networks with American buyers.

Both parties expressed optimism about strengthening future economic partnerships and mutual cooperation between the two countries.​

 

[Saif]

Prospect bright for Bangladeshi MMF-based RMG exports to US, say exporters

Bangladeshi manmade fibre (MMF)-based garment exports to the US, which remained almost static during the last two years, will get a boost amid the duty tension among the major producing countries, provided local challenges are addressed, industry insiders said. They said now is the right time to i

thefinancialexpress.com.bd

Prospect bright for Bangladeshi MMF-based RMG exports to US, say exporters

Monira Munni
Published :
Aug 14, 2025 10:00
Updated :
Aug 14, 2025 10:00

Bangladeshi manmade fibre (MMF)-based garment exports to the US, which remained almost static during the last two years, will get a boost amid the duty tension among the major producing countries, provided local challenges are addressed, industry insiders said.

They said now is the right time to invest in the backward linkage textile sector, especially MMF-based garment manufacturing.

Bangladesh is currently in an advantageous position with a 20 per cent additional duty for exporting to the US and can grab a larger share of work orders shifting from China and India, they also said.

They further added Vietnam is not increasing its garment production capacity, while Bangladesh has the capacity and can further enhance it if the required policy support is provided.

According to data compiled by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh exported MMF-based garments worth $1.54 billion to the US in 2024, which was almost the same - $1.55 billion - in 2023.

Such exports were only $764.92 million in 2020.

Abdullah Hil Nakib, deputy managing director of Team Group, told The Financial Express MMF-based apparels account for $1.2-1.3 billion of the $7.50 billion Bangladeshi garments exported to the US on average.

Most of the required raw materials to make such clothes are imported mainly from China, he said.

Due to the trade and duty war between the US and China, orders from the latter will shift to other destinations, he said.

"Now we have a scope to choose and go for high-value-added items made with MMF."

He said his company's exports of MMF apparel items like jackets and outerwear have been increasing for the last couple of years.

Nakib, however, said MMF garments are mostly exported to the European Union (EU).

The EU imposes one regulation after another, including ESG and other due diligence requirements, and this encourages local exporters to diversify their destinations, he said.

Though sourcing raw materials from China may have some disadvantages for exporting products to the US, he said it is high time Bangladesh prepared itself by handling the least developed country (LDC) graduation challenges.

The US cut the additional duty on Bangladesh's exports to 20 per cent from 35 per cent, which is now equal to, or on a more equal footing with, the major competitors.

The rate is lower than China's 30 per cent and India's 25 per cent.

Bangladeshi garment exports to the US will face tariffs of 36.5 per cent and 52 per cent for cotton-based and MMF-based items, respectively.

The rates include 20 per cent reciprocal tariff on top of the existing 16.5 per cent and 32 per cent tariffs, respectively.

Shovon Islam, managing director of Sparrow Group, said Bangladesh could gain a competitive edge in MMF garment manufacturing if raw materials are sourced locally.

Sayeed Ahmed Chowdhury, director at Square Denim, said they mostly blend MMF with other materials, such as cotton, due to the absence of local raw materials despite huge demand.

He, however, said a good number of entrepreneurs are investing in the MMF segment to grab a share of the growing global demand.

Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell said following the successful reciprocal tariff negotiations with the US, Bangladesh is now in a stronger position.

As a result, local exporters are receiving more queries from buyers, he said.

"There is optimism about future business, and we want to invest further. Now is the high time to invest in the textile sector," he added.

BTMA former president A Matin Chowdhury, however, stressed diversification in the textile sector to manufacture blended, as well as MMF- and non-cotton-based, yarns and fabrics to sustain business in the long run and face the emerging challenges.

According to industry insiders, Bangladesh's synthetic yarn industry is small and cannot meet the domestic demand for MMF yarns.

That is why the country imports most of the manmade yarns and fibres used in apparel exports, they said.

Till 2023, Bangladesh had 19 synthetic spinning mills, including eight acrylic ones, they added.

The synthetic yarn industry commonly imports pellets for mixing and blends synthetic fibres with natural ones to create blended yarns.

Insiders expect that the demand for such yarns will increase in the future.

To meet this demand, they are working on increasing the domestic supply of MMF yarns and seeking the required policy support from the government.

With respect to fibre types, cotton garments account for the majority of US imports by value and share, although the product mix between cotton and synthetic garments changed gradually between 2013 and 2023, according to a United States International Trade Commission report.

In 2013, MMF garments made up 17.0 per cent of the US apparel imports from Bangladesh. By 2023, the share grew to 25.3 per cent, the report said.​

 

[Saif]

https://thefinancialexpress.com.bd/trade/11th-yarn-fabrics-accessories-show-kicks-off-in-dhaka

11th Yarn, Fabrics & Accessories Show kicks off in Dhaka

FE Online Desk
Published :
Aug 14, 2025 18:17
Updated :
Aug 14, 2025 18:17

The 11th Bangladesh Yarn, Fabrics & Accessories Show 2025 has begun today (Thursday) at the International Convention City Bashundhara (ICCB).

The four-day international trade show is bringing the country’s RMG sector an opportunity to source their requirements of yarn, fabric and garment accessories from international suppliers showcasing at the show, according to a media release.

The 11th edition of this show, organised by ASK Trade & Exhibitions Pvt. Ltd, features participation from over 100 overseas companies showcasing their latest collections of yarn, fabrics and accessories to the RMG sector of Bangladesh.

The event is targeted at garment manufacturers and exporters, buying houses and fabric importers, enabling them to source from overseas suppliers right at their doorsteps, the release says.

The inauguration ceremony was graced by Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), as the chief guest.

Also present at the event were Md. Shahriar, President of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA); Kazi Mizanur Rahman, Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA); and Tipu Sultan Bhuiyan, Managing Director of ASK Trade & Exhibitions.

At the event, Mohammad Hatem emphasised arranging such exhibitions more frequently to showcase the capabilities of Bangladesh’s textile sector to global buyers.

He also remarked, “With stalls of various international companies under one roof, such fairs allow buyers to select products directly from suppliers without any 3rd party. As a result, high-quality products can be purchased at comparatively lower costs.”

Tipu Sultan Bhuiyan, Managing Director of ASK Trade & Exhibitions Pvt. Ltd said, “Fabric sourcing being a dynamic activity, access to new innovation and new suppliers is always vital to the exporters, and the 11th edition of the International Yarn, Fabrics & Accessories Sourcing Show is aimed at achieving this objective.”

A wide range of yarns, coloured spun yarn, blended yarns for the manufacture of woven and knitted garments, the latest collections in knitted and woven fashion fabrics, plush fabric, TR suit fabric, wool suit fabric, fashion printed fabric, knitted sports functional fabric, home fabric, toy fabric, and post-process hot stamping, embroidery, composite, film, flocking and garment accessories are on display at the show, the release adds.

The show is open to all business visitors between 11 am to 7 pm.​

 

[Saif]

Bangladesh emerges as top T-shirt exporter to the US market

Bangladesh has emerged this year as the top exporter of T-shirts to the US market, overtaking Nicaragua, Honduras and China to claim the top position

en.prothomalo.com

First 6 months of the year
Bangladesh emerges as top T-shirt exporter to the US market
Published: 14 Aug 2025, 14: 47

Despite the pressure of reciprocal ¬tariffs, Bangladesh has emerged this year as the top exporter of T-shirts to the US market. For the first time, Bangladesh has overtaken leading T-shirt exporters such as Nicaragua, Honduras and China to claim the top position.

According to the United States International Trade Commission, in the first six months of the current year, the US imported T-shirts worth a total of USD 3.52 billion from 117 countries. Of this, T-shirts worth USD 373.2 million came from Bangladesh. In the same period, Nicaragua, last year’s top exporter, shipped T-shirts worth USD 361.2 million.

Bangladesh had never before been the leading exporter of T-shirts to the US market. For 36 years (1989–2024), the market had been dominated by T-shirts from Honduras, Nicaragua, Hong Kong, Jamaica, Mexico and China. Except for China and Hong Kong, most of these top-ranking countries had enjoyed tariff benefits due to trade agreements with the US. But this changed at the start of the year.

On 2 April, the Trump administration imposed an additional minimum 10 per cent tariff on imports from all countries. This meant that Nicaragua and Honduras, despite their previous tariff advantages, also had to pay at least the minimum tariff on T-shirts. Managing to tackle this first wave of tariff pressure, Bangladesh's T-shirts have risen to first place in the US market.

Meanwhile, from 7 August, Trump’s reciprocal tariffs at varying rates for different countries came into effect. The impact of these tariffs is not yet known. However, exporters believe that even after the implementation of the reciprocal tariffs, Bangladesh remains in a favorable position compared to its competitors. They point out that the retaliatory tariff on Bangladeshi products is 20 per cent, the same as Vietnam’s.

In contrast, India’s tariff rate is 50 per cent and China’s is 30 per cent, making Bangladesh’s rate lower than both. Nicaragua, a competitor in the T-shirt market, now has to pay an 18 per cent retaliatory tariff as well. This means that, having lost its duty-free advantage, Nicaragua must now compete to export to the US.

Asked whether Bangladesh would be able to hold on to the top spot in T-shirt exports, Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Prothom Alo: “It is good news for us that in the first six months of the year, Bangladesh has risen to the top in T-shirt exports to the US market. However, after the reciprocal tariffs came into force on 7 August, there is a risk that this position could change. While Bangladesh’s standing is relatively good compared to competing countries, if consumer demand in the US falls, our exports could be negatively affected.”

The US is Bangladesh’s single largest export market. According to the National Board of Revenue (NBR), the country exported goods worth USD 8.76 billion to the US in the 2024–25 fiscal. Bangladesh ships a wide variety of apparel items to this market, including T-shirts.

Beyond the US, Bangladesh also leads its competitors in T-shirt exports to many countries, including Germany, Spain, France, the United Kingdom, Poland, Italy, Denmark, Canada — and even neighboring India.

Competitive pricing
There are two types of T-shirts depending on the fabric: cotton T-shirts and those made from synthetic fibre. Typically, synthetic fibre T-shirts are more expensive. Prices also vary depending on quality. Even so, data from the United States International Trade Commission offers an idea of the average export price per T-shirt by country.

According to this data, in the first six months of the current year, each T-shirt exported from Bangladesh fetched an average of USD 1.76. In the same period, Nicaragua, last year’s leader, exported each T-shirt at USD 1.65. This means Bangladesh has taken the lead by exporting T-shirts at a higher average price than Nicaragua. From Honduras, the average was USD 2.10 per T-shirt; from Vietnam, USD 2.68; from India, USD 1.81; from China, USD 1.63; and from Pakistan, USD 1.50.

Based on these average prices, Bangladesh’s per-piece export price is higher than that of China, Nicaragua, and Pakistan, but lower than those of competitors such as Vietnam, Honduras, and India.

Global exports and Bangladesh’s position
According to the United States International Trade Commission, last year the global T-shirt export market was worth USD 56.82 billion, covering shipments from one country to another. Bangladesh ranks just after China in global T-shirt exports. Among all categories of apparel Bangladesh exported worldwide last year, T-shirts topped the list.

According to the National Board of Revenue (NBR), in the last fiscal year Bangladesh exported T-shirts worth USD 7.45 billion to 158 countries. After Germany and Spain, the United States was the third-largest export destination.

Beyond the US, Bangladesh also leads its competitors in T-shirt exports to many countries, including Germany, Spain, France, the United Kingdom, Poland, Italy, Denmark, Canada — and even neighboring India. Now, based on figures from the past six months, the US has joined this list.

Top T-shirt export destinations
Germany is the largest single destination for Bangladesh’s T-shirts. In the 2024–25 fiscal, Bangladesh exported T-shirts worth USD 1.05 billion there. Spain ranked second, importing T-shirts worth USD 890 million, while the United States ranked third with imports worth USD 850 million. In the last fiscal year, Bangladeshi exporters shipped T-shirts to 158 countries, with the US accounting for about 11 percent of total exports.

According to NBR data, 811 factories and companies exported T-shirts to the US in the last fiscal year. The largest exporter was GAB Limited of Savar, which shipped USD 155 million worth of T-shirts to the US. In second place was another Savar-based company, SDS International, with exports worth USD 71.8 million. Ayesha Clothing Co. ranked third, exporting USD 46.7 million worth of T-shirts.

Other companies in the top ten were: Knit Asia Ltd. of Savar (USD 37.5 million), Divine Intimates of Chattogram (USD 16.2 million), Ratul Apparels of Gazipur (USD 13.4 million), Taqwa Fabrics (USD 12.5 million) and JM Fabrics (USD 10.1 million), Impress-Newtex Composite Textiles of Tangail (USD 9.4 million), and York Fashion of Chandpur (USD 9.1 million).​

 

[Saif]

Narrow product range risks RMG sector’s sustainability

Bangladesh long banks on few items for apparel-export earnings, risking the sector's sustainability, although diversification with high-value products suiting growing global- market trends holds great potential, trade experts say. Five traditional items from the country's main export sector- trous

thefinancialexpress.com.bd

SILVER LINING NOW SHINES ON APPAREL HORIZONS
Narrow product range risks RMG sector’s sustainability

Monira Munni
Published :
Aug 19, 2025 00:10
Updated :
Aug 19, 2025 00:10

Bangladesh long banks on few items for apparel-export earnings, risking the sector's sustainability, although diversification with high-value products suiting growing global- market trends holds great potential, trade experts say.

Five traditional items from the country's main export sector- trousers, T-shirt, shirt, sweater, and underwear - contributed about 80.82 per cent of the total readymade garment (RMG)-export earnings in the past financial year (FY25), according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data.

The country exports more than 30 types of garment products, according to industry people.

Knit-and woven-apparel exports together fetched $39.34 billion in FY25. Of the earnings, the five items contributed $31.80 billion.

Back in FY16, the aforesaid items of common use brought in $24.49 billion, while total RMG export earnings were $28.09 billion, data showed.

During the last decade, underwear exports more than doubled while trousers fetched the highest earnings. On the other hand, shirt earnings remained almost static.

Of the $31.80 billion earnings in the just-past fiscal year, $12.98 billion came from trousers, $8.54 billion from T-shirt, $5.05 billion from sweater, $3.04 billion from shirt and blouse, and $2.17 billion from underwear.

The country's total export earnings stood at $48.28 billion during the last fiscal year, with apparel accounting for an overwhelming 81.49 per cent, data showed.

Exporters and experts opine that Bangladesh largely produces basic items mostly based on cotton. "Though the global market is switching to man-made fibre (MMF)-based garments from the natural fibre of cotton, the situation of Bangladesh looks opposite," they note by one voice, stressing the need for the RMG sector's diversification.

They have, however, said diversification is happening gradually, especially in denim, dyeing, and washing segments.

Besides, the critics blame the absence of effective steps for product diversification according to market demands and exploration, poor infrastructure, and entrepreneurs' unwillingness to take risks.

"Such dependency on a single sector and a few items might put the overall export earnings at risk," says one trade expert, recommending effective measures and government policy support to increase the competitiveness of local products, including non-apparel items, and exploring the untapped markets across the world.

Fazlee Shamim Ehsan, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told The Financial Express that diversification is taking place gradually and items on the top-five list also changed during the last decade, with underwear/lingerie entering the basket.

He explains that there are three types of value addition - country base, inside products, and profit.

"The first two are rising as they source local raw materials mostly for knit items and necessary accessories, though value addition in terms of profit has declined," he notes.

Explaining the risk of confining to a few items, Mr Ehsan added that as most of them produce basic items, it has developed higher capacity compared to the global demand, which resulted in price pressure.

Inamul Haq Khan, senior vice-president of the BGMEA, says 70 per cent of the global demand is for MMF-based garments, while Bangladesh produces 70-75 per cent of its exportable based on cotton, which runs counter to the global trend of the day.

To raise export earnings from RMG products, he says, exporters need to go for MMF-based garments to sustain in the competition and get better prices like Vietnam.

His factory's export earnings are growing, though the number of factories or their capacity has not increased, says the leading exporter, adding that it is because they produce high-value-added items.

Bangladesh mostly makes items for which the free on board (FOB) is $6-8 per piece on average, while it gets $12-15 for cut and make (CM) - which means stitching for a garment - and there are products that bring CM of $30 per piece.

Both leaders have said the country needs investment in the backward-linkage textile sector to produce raw materials needed for MMF-based garments as Bangladesh has to meet the requirements for such materials imported from China and India.

Textile millers also stressed diversification in the textile sector to manufacture blended, as well as MMF- and non-cotton-based, yarns and fabrics to sustain business in the long run and face the emerging challenges stemming from tariffs and post-graduation market access.

According to industry-insiders, Bangladesh's synthetic yarn industry is small and cannot meet the domestic demand for MMF yarns.

That is why the country imports most of the manmade yarns and fibres used in apparel exports, they said. Till 2023, Bangladesh had 19 synthetic spinning mills, including eight acrylic ones, they added.

A new diagnostic report by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) says Bangladesh's RMG sector could be on the cusp of a transformative leap, with the potential to earn up to $94 billion in annual export earnings by 2029 if it expands into non-traditional markets and embraces MMF-based garment production.

This ambitious earning amount is expected to be achieved at an average annual growth rate of 15 per cent, which would require coordinated reforms across trade, industry, and finance, it adds.​

 

[Saif]

Import of RMG raw materials rises by 9.9pc

The country’s imports of raw materials for the readymade garment sector witnessed a growth of 9.9 per cent in the financial year 2024-25, according to Bangladesh Bank data...

www.newagebd.net

Import of RMG raw materials rises by 9.9pc
Staff Correspondent 17 August, 2025, 23:47

File photo shows workers are at duty at a garment factory in the city. | New Age photo

The country’s imports of raw materials for the readymade garment sector witnessed a growth of 9.9 per cent in the financial year 2024-25, according to Bangladesh Bank data.

According to the data, the country imported raw materials for the RMG sector, including raw cotton, yarn, staple, and other accessories, worth $18.44 billion. The amount was $16.78 billion in FY24.

The central bank published the commodity-wise annual import data through the customs records.

In FY25, Bangladesh earned $39.35 billion by exporting RMG products, the highest export-earning sector. This was an 8.84 per cent increase from $36.15 billion in FY24.Bangladesh travel packages

The RMG sector accounted for more than 80 per cent of the country’s $48.28 billion worth of export earnings in FY25, said Export Promotion Bureau data.

The net exports from the RMG sector totaled $20.91 billion in FY25, according to central bank data.

Among the primary raw materials, raw cotton imports experienced a decline of 4.3 per cent to $3.46 billion, down from $ 3.60 billion in FY25.

Bangladesh imported yarn worth $3.61 billion in FY25, 12.3 per cent higher than $3.22 billion in FY24.

Textile and other related articles imports experienced a 16 per cent growth to $8.69 billion in FY25, up from $7.72 billion in FY24, according to the central bank data.

Staple fibre imports stood at $1.53 billion, representing a 10 per cent increase from $1.39 billion in FY24.

In FY25, the country imported dyeing and tanning materials worth $877 million, a 5.2 per cent increase from $833.7 million in FY24, according to Bangladesh Bank data.

Bangladesh Garment Manufacturers and Exporters Association senior vice president Inamul Haq Khan told New Age that the values of exports, imports, and net exports demonstrated the stable situation of the country’s RMG sector.

‘The FY25 was an excellent year for us and we are hopeful that the current FY26 will also be a positive year,’ he added.Bangladesh travel packagesNew Age subscription

The United States has recently revised the reciprocal tariff for Bangladesh to 20 per cent, almost the same as its major competitors, except for India, which has been slapped with a 50 per cent tariff.

Inamul Haq expressed optimism that, for this reason, some orders might shift from India to Bangladesh.

‘Moreover, we are also in a good shape at European and other markets, so import of raw materials might increase in the current FY26,’ he added.

He urged the government to address the domestic bottlenecks, including energy shortage, port and customs issues, ease of doing business, and banking issues, to ensure a better business environment.

‘If we get sufficient policy support, we have the ability to reach targets as we are getting better purchase orders,’ he added.

However, the import of capital machinery experienced a negative growth of 19.1 per cent to $2.81 billion in FY25, compared to $3.48 billion in FY24, according to Bangladesh Bank data.

The other capital goods import also experienced negative growth of 5.9 per cent to $6.7 billion from $7.15 billion in FY24.

Exporters said that this decline was mainly due to political transition and uncertainty, which discouraged entrepreneurs from making new investments.​

 

[Saif]

Reforms and diversification key to boosting RMG

For decades, policy circles and industry stakeholders have repeatedly stressed the need for reforms and diversification to rejuvenate the country's readymade garment (RMG) exports. Reforms essentially imply structural changes in production and operations, with a strategic shift from low-end, mass-v

thefinancialexpress.com.bd

Reforms and diversification key to boosting RMG

Wasi Ahmed
Published :
Aug 20, 2025 00:18
Updated :
Aug 20, 2025 00:18

For decades, policy circles and industry stakeholders have repeatedly stressed the need for reforms and diversification to rejuvenate the country's readymade garment (RMG) exports. Reforms essentially imply structural changes in production and operations, with a strategic shift from low-end, mass-volume products to high-end or semi-high-end categories that effect higher value addition. Diversification, on the other hand, refers not only to broadening the range of apparel products but also to extending export reach beyond the conventional markets of North America and the European Union. Although some progress has been made on both fronts, the pace has been far slower than the required. In today's rapidly changing global trade dynamics -- especially involving apparel exports -- the challenges are more complex than they were a decade ago, forcing Bangladesh at a crossroads.

Despite the difficulties, optimism persists that Bangladesh can still make a transitional leap in apparel exports. A recent diagnostic report prepared jointly by the World Bank, the International Finance Corporation, and the Multilateral Investment Guarantee Agency highlights this potential. According to the report, Bangladesh's RMG sector could generate as much as US$94 billion in annual export earnings by 2029, provided that the industry actively expands into non-traditional markets and embraces manmade fibre (MMF) production in a big way. Achieving this ambitious target would require sustaining an average annual growth rate of 15 per cent -- a formidable challenge that demands wide-ranging, coordinated reforms across trade policy, industrial operations, and financial systems.

The report also identified four sectors in Bangladesh with the highest growth potential where private investment could play a transformative role. These include the RMG, middle-income housing, domestic production of textile dyes and paints, and digital financial services. The findings also shed light on broader concerns such as foreign direct investment (FDI) trends, the overall business climate, and cross-cutting regulatory bottlenecks that hinder private sector growth. The clear message is that while Bangladesh's growth prospects remain bright, achieving them will require regulatory clarity, accelerated digital transformation, and establishment of a more inclusive and investment-friendly climate.

The United States, Bangladesh's single largest apparel export destination, is likely to play a particularly pivotal role in this anticipated prospect. Recent tariff actions by the US, targeting multiple countries including some of Bangladesh's competitors, carry important implications for Bangladesh's RMG exports. The US tariffs are largely aimed at curbing Chinese exports. Consequently, many American apparel brands and retailers are now adopting a strategy of geographical diversification in sourcing to reduce over-dependence on China. Rising tariff rates on Chinese apparel and the intensifying strategic rivalry between Washington and Beijing have prompted several leading US fashion companies to scale down their sourcing from China -- some planning to reduce it to single-digit percentages, and others even considering moving out of China altogether.

This geopolitical and trade reorientation presents Bangladesh with a unique window of opportunity. With China's declining market share in the US and the search for alternative sourcing bases, Bangladesh could secure a larger slice of the American apparel market. The numbers tell the story: China's share of the US apparel import market dropped from 37.7 per cent in 2013 to 21.3 per cent in 2023. During the same period, Bangladesh's share rose from 6.0 per cent to 9.0 per cent. Vietnam has also been a major beneficiary, expanding its share from 10 per cent to 17.8 per cent. India, Cambodia and Pakistan, too, recorded modest gains. Clearly, the global sourcing map is shifting and Bangladesh stands to benefit if it can position itself strategically.

The critical question, however, is whether Bangladesh is ready to seize this opportunity. Industry insiders point out that despite clear signals of shifting demand, fresh investment to expand production capacity -- especially in MMF-based and other high-value apparel items -- has been limited. The country still depends heavily on imported raw materials for producing value-added garments, particularly MMF-based products. Without building domestic capacity in this area, Bangladesh risks missing out on lucrative future orders. Moreover, structural challenges such as energy shortages, rising utility costs, and persistent logistics bottlenecks continue to undermine the country's competitive edge.

Local exporters, however, remain cautiously optimistic. They argue that with its existing scale and experience, Bangladesh already has the capability to absorb some of the work orders likely to be diverted from China. The competitive edge lies in cost efficiency, skilled workforce, and a strong reputation as a reliable supplier. But for this to translate into long-term market resilience, the country must urgently address its internal weaknesses. Expansion of investment in MMF production, reliable energy supply, upgrading of port and transport infrastructure and removal of bureaucratic bottlenecks are the key imperatives.

Another important trend is the pricing strategy of US fashion companies. Even amid rising costs from tariffs and supply chain adjustments, these companies have largely avoided widespread retail price hikes. Instead, they have absorbed some of the cost pressures internally while maintaining their sourcing diversification strategy. This signals that buyers are looking for competitive suppliers who can ensure flexibility, speed and quality without significantly raising end prices. Bangladesh's ability to align with this evolving buyer preference will be decisive in slicing greater market shares.

Industry leaders repeatedly emphasise that a strategic shift from low-end to high-value apparel is no longer optional but essential. Bangladesh must move beyond being predominantly a producer of basic garments to one that specialises in design-driven, technologically advanced, and higher-margin items. At the same time, exploring new and emerging markets outside the US and EU is crucial. Countries in East Asia, Latin America, and Africa represent untapped potential that could further diversify Bangladesh's export portfolio and reduce dependence on a few large markets.

The pathway to revamping Bangladesh's RMG sector lies in a dual strategy of reforms and diversification. Reforms must focus on upgrading the industry to produce more high-value products supported by stronger backward linkages in MMF and other inputs. Diversification must go beyond products to include new markets. The opportunities created by the shifting global trade dynamics are real, but seizing them will require vision, investment and matching strategic policy.​

 

[Saif]

Apparel exports to EU rise by 17.9pc in H1

Bangladesh cemented its position as the European Union’s second-largest apparel supplier in the first half of 2025 with exports up 17.9 per cent to 10.29 billion euros, but its growth was eclipsed by China’s 22.3 per cent rise and Cambodia’s 30.4 per cent surge, signalling severer competition in...

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Apparel exports to EU rise by 17.9pc in H1
Moinul Haque 20 August, 2025, 00:50

A file photo shows female workers sewing clothes at a readymade garment factory in Dhaka. | New Age photo

Bangladesh cemented its position as the European Union’s second-largest apparel supplier in the first half of 2025 with exports up 17.9 per cent to 10.29 billion euros, but its growth was eclipsed by China’s 22.3 per cent rise and Cambodia’s 30.4 per cent surge, signalling severer competition in the EU market.

According to Eurostat data released on Monday, EU apparel imports from Bangladesh rose to 10.29 billion euros in January–June 2025, up from €8.73 billion in the same period of 2024.

Knitwear was the main driver, rising by 21.1 per cent to 6.03 billion euros, while woven garments increased by 13.6 per cent to 4.26 billion euros.

Exporters said the higher growth showed that EU demand for garments was rising and the market there was improving, but they were concerned about growing competition among major producers following the US’s new tariffs on many Asian garment-producing countries.

They said the high US tariffs, especially on India and China, had pushed these countries to focus more on the EU to make up for losses in the US market.

The year started strongly, with exports in January 2025 reaching 1.91 billion euros, a 61 per cent rise from 1.19 billion euros in January 2024.

February followed with 1.66 billion euros, 28 per cent higher than a year earlier, and in March exports rose further to 2.11 billion euros, an 18 percent increase.

In April 2025, Bangladesh’s apparel exports to the EU stood at 1.86 billion euros, just six per cent higher than April 2024.Bangladesh history book

In May, exports fell to 1.42 billion euros, 11 per cent lower than the 1.59 billion euros of the previous year, marking the first monthly drop in the year.

June saw a small recovery, with exports rising to 1.33 billion euros, 19 per cent higher year-on-year, although still slightly below May on a monthly basis.

Bangladesh Knitwear Manufacturers and Exporters Association former president Fazlul Hoque said the overall growth showed the market was improving, as almost all major producing countries had double-digit growth.

He said that Bangladesh could do better if there was no internal problems, such as factory closures and banking difficulties, which had slowed further growth.

Fazlu, also managing director of Plummy Fashions Ltd, said that because of trade tensions between China and the US, China was losing US market share.Bangladesh history book

He warned that China was increasing its focus on the EU and would continue to do so, and that India would likely follow, making competition in the market very strong.

When compared with other leading suppliers, Bangladesh’s growth in the first six months of 2025was higher than the EU’s overall apparel import expansion of 12.3 per cent.

Data showed that the EU apparel imports increased to 43.39 billion euros in the first half of 2025, up from 38.64 billion euros in the same period of 2024.

Knitwear led the gains with a 14.7 per cent rise to 21.87 billion euros, while woven apparel grew 10 per cent to 21.51 billion euros.

Other competitors also showed solid improvements but did not match Bangladesh’s overall momentum.

China reinforced its dominance as the EU’s largest supplier, with exports rising 22.3 per cent from 9.20 billion euros in H1 2024 to 11.26 billion euros in H1 2025.Bangladesh history book

Cambodia led growth among major exporters, with EU apparel imports rising 30.4 per cent from 1.59 billion euros in H1 2024 to 2.07 billion euros in H1 2025.

India increased its apparel exports to the EU by 15.4 per cent to 2.70 billion euros in January-June of 2025.

Pakistan grew by 16.6 per cent to 1.86 billion euros, recording balanced gains across knit and woven segments.

Vietnam maintained strong double-digit expansion, up 17.3 per cent to 2.02 billion euros, broadly in line with Bangladesh’s percentage increase.

Turkey, traditionally an important supplier due to its geographical proximity, was the only major exporter to see a decline in the EU market.

EU apparel imports in the first half of 2025 from Turkey fell by 7 per cent to 4.27 billion euros, with both knit and woven categories in contraction​