[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

https://thefinancialexpress.com.bd/views/opinions/vietnams-apparel-export-strategy-lesson-for-bd

Vietnam's apparel export strategy lesson for BD

Atiqul Kabir Tuhin
Published :
Dec 24, 2025 22:38
Updated :
Dec 24, 2025 22:38

Bangladesh and Vietnam are often presented as close rivals in the global apparel industry, with export figures suggesting a neck-and-neck race for a larger share of global apparel market. In 2024, Bangladesh exported garments worth USD 38.48 billion, accounting for 6.9 per cent of the global market, closely followed by Vietnam's USD 33.94 billion with a 6.1 per cent share. Meanwhile, China remains dominant, commanding 29.6 per cent of global apparel exports, while India and Turkey trail with less than 3-4 per cent each.

On the surface, Bangladesh is slightly ahead of Vietnam. However, focusing only on headline numbers obscures a deeper reality: the two countries are competing under different trade frameworks. Vietnam is exporting from a position of strategic security, while Bangladesh remains heavily dependent on time-bound trade privileges that are nearing expiry date.

This contrast is most visible when export destinations are examined. Vietnam has built a dominant position in the United States, exporting USD 14.98 billion worth of apparel there in 2024, almost twice Bangladesh's USD 7.34 billion. Bangladesh, in contrast, relies overwhelmingly on the European Union, where it exported USD 19.77 billion, compared to Vietnam's USD 4.31 billion. This dependence has served Bangladesh well so far, largely because of duty-free access under the EU's Everything But Arms (EBA) scheme for least developed countries. But that advantage is temporary. Vietnam's access, by contrast, is contractual and permanent, secured through the EU-Vietnam Free Trade Agreement (EVFTA).

The EVFTA is steadily reshaping competitive dynamics inside the EU market. Tariffs on many Vietnamese apparel products have already been eliminated, while others are on a clear path to full liberalisation by 2027. As a result, trade patterns are beginning to shift. In product categories where tariffs were removed immediately or within four years, EU imports from Vietnam have grown faster than those from Bangladesh. More importantly, the most commercially significant apparel items such as cotton T-shirts, denim trousers, and knitt garments fall under tariff slabs that will soon be fully liberalised for Vietnam. Early signs suggest that Bangladesh's growth in these categories is slowing, while Vietnam is accelerating.

Beyond tariffs, the two countries differ sharply in product composition. Vietnam's apparel exports to the EU are overwhelmingly non-cotton based, accounting for more than three-quarters of its shipments. Bangladesh, by contrast, remains heavily concentrated in cotton garments, with non-cotton items making up less than one-third of exports. Although Bangladesh has made progress in recent years, Vietnam's head start is reinforced by deeper investments in synthetic textiles, stronger backward linkages and greater use of renewable energy, factors that are being increasingly valued in the EU market.

This structural gap becomes more problematic when rules of origin are considered. Future EU trade preferences, particularly under GSP Plus, require compliance with double transformation rules of origin. Bangladesh's dependence on imported woven and manmade fibre fabrics puts it at a disadvantage, while Vietnam's domestic textile base allows it to meet these requirements more easily. So, without accelerating investment in fabric manufacturing, Bangladesh risks losing competitiveness even if some preferential access is retained.

Vietnam's faster growth and higher-value product mix also pose a real challenge. In the EU, 100 kg of T-shirts from Vietnam earned $2,158, nearly double the $1,092 fetched by Bangladeshi equivalents. This reflects Vietnam's strength in value-added, synthetic and technical garments, in contrast to Bangladesh's dominance in cotton basics. Approximately 73 per cent of Bangladesh's export value comes from cotton garments, even though the global apparel market is increasingly shifting towards synthetics and multifunctional apparel. Bangladesh's advantage lies in scale, cost-efficiency and production reliability.

Policy risks are also looming large. The EU is set to review its Generalised Scheme of Preferences, with changes expected to take effect in 2028. Bangladesh has already exceeded safeguard thresholds that allow the EU to suspend preferences when import concentration becomes excessive. Its share of EU apparel imports under GSP far surpasses the established limits, creating a significant obstacle to securing GSP Plus status. When EBA benefits finally expire in November 2029, Bangladesh could face standard tariffs of around 12 per cent, while Vietnam will continue exporting duty-free under the EVFTA.

This looming asymmetry underscores a critical point: Vietnam is not merely competing on price or productivity; it is competing on certainty. Its extensive network of free trade agreements including the CPTPP, RCEP, ASEAN FTAs and agreements with Eurasian markets has sealed in access across major regions. Bangladesh, by contrast, is still navigating graduation-related adjustments without a comparable web of long-term trade arrangements.

The next five years, therefore, represent a decisive window. For policymakers, securing sustained access to the EU must be treated as an economic priority, whether through GSP Plus eligibility, a bilateral trade agreement, or an extended transition arrangement. At the same time, trade diplomacy must be matched by domestic reform, particularly in building backward linkages in woven and manmade fibre textiles, improving energy efficiency and aligning with emerging sustainability and traceability standards.

For entrepreneurs and manufacturers, the challenge is equally urgent. The future will reward those who diversify products, invest in technology and integrate more deeply into global value chains. Bangladesh's apparel sector has demonstrated resilience time and again, but resilience alone will not offset structural disadvantages in market access. Bangladesh must deepen its global integration, adopt high-value production, and differentiate itself through innovation and sustainability. The focus must shift from just scale to sophistication.

Vietnam's trade strategy offers a clear lesson: long-term competitiveness in today's global trading system is shaped as much by policy foresight as by factory efficiency. If Bangladesh can combine its proven manufacturing strength with proactive trade strategy and industrial upgrading, it can move from vulnerability to stability, and secure a strong foothold in global apparel trade.​

 

[Saif]

RMG sector’s resilience tested as 2025 nears end

Bangladesh’s readymade garment sector faced one of its most challenging period in 2025, as manufacturers struggled to cope with tariff shocks and volatility in key export markets.

www.newagebd.net

RMG sector’s resilience tested as 2025 nears end
Saddam Hossain 27 December, 2025, 01:27

A file photo shows workers sewing clothes at a readymade garment factory on the outskirts of Dhaka. | New Age photo

Bangladesh’s readymade garment sector faced one of its most challenging period in 2025, as manufacturers struggled to cope with tariff shocks and volatility in key export markets.

Rising production costs at home, a shaken law-and-order situation and persistent disruptions to energy and logistics forced many manufacturers to prioritise short-term survival over long-term planning.

Shovon Islam, managing director of Sparrow Group, told New Age that 2025 had been challenging for the sector.

‘In many ways, the situation is comparable to the shocks we faced during the abolition of the quota system, the Rana Plaza tragedy and the Covid-19 pandemic,’ he added.

Industry insiders said that the primary source of uncertainty was the US market, Bangladesh’s single-largest apparel export destination.

In April, the United States imposed sharply higher reciprocal tariffs on several countries, including Bangladesh, on which it raised the duty on apparel shipments to the US to 37 per cent. The tariff was later lowered to 35 per cent and then to 20 per cent, following a series of negotiations on July 30.

From August 7, Bangladeshi apparel items have been facing a 20 per cent reciprocal tariff, in addition to the regular 16.5 per cent tariff.

‘During the imposition of the tariff, we were completely in the dark,’ said Shovon Islam, adding that buyers were also operating in a ‘go-slow’ mode.

Although the tariff was eventually reduced, a slowdown on the global market deepened following the US tariff measures, which reshaped global trade by raising costs, industry insiders said.

Exports of RMG items throughout the year fluctuated. While exports maintained positive growth until June 2025, they nosedived consecutively from July.

According to Export Promotion Bureau data, Bangladesh exported RMG items worth $35.49 billion to global destinations during January-November period of 2025, which was 2.53 per cent higher than the $34.71 billion recorded during the same period in 2024.

Although exports posted marginal growth overall, the negative trend that began in July persisted through November, signalling that year-on-year growth could turn negative once data for December becomes available.

Moreover, during the July-November period of FY26, Bangladeshi exporters recorded a 1.03 per cent decline in exports to the European Union to $7.83 billion, while growth to the US market remained thin at 3.06 per cent to $3.22 billion.

Surprisingly, exports to non-traditional markets also declined by 3.19 per cent to $2.67 billion during the July-November period.

Regarding the export decline, Inamul Haq Khan, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said that they had expected a comeback in the second half of 2025.

‘However, instead of a recovery, exports nosedived across all three major destinations — the US, the EU and the non-traditional markets,’ he added.

The slowdown on non-traditional markets is shocking, he said, noting that shipments to these destinations had remained strong for many years.

‘Throughout 2025, the global fashion industry experienced a slowdown that affected us. Most probably, consumers changed their buying patterns due to inflation and economic sluggishness,’ he added.

He said that, due to the US tariffs, China, India and other competitors aggressively entered the EU and new markets, squeezing Bangladesh’s market share.

Moreover, Bangladesh did not receive the expected volume of orders shifting from China, as Vietnam, Indonesia and Myanmar captured a larger share, he added.

Fluctuating inflation in key markets — especially the US, Europe and the United Kingdom — reduced consumers’ appetite for new apparel, forcing retailers to shift from placing large orders to smaller, more cautious purchases.

Several domestic headwinds also affected the RMG sector in 2025, including political instability, labour unrest, banking sector weaknesses, a complete shutdown of the customs house due to officials’ protests, a fire at the airport cargo village and a persistent gas and energy crisis.

Shovon Islam said that throughout 2025, the banking sector experienced severe liquidity shortages, foreign currency constraints, high interest rates and elevated levels of classified loans.

Many RMG exporters faced difficulties opening back-to-back letters of credit due to weakened bank health. Several Shariah-based banks were merged under government supervision because of their volatile condition.

Many RMG factories, including those of BEXIMCO and NASSA, as well as some small and medium-sized ones, were also forced to shut down due to non-performing loans, a lack of orders and unavoidable political situations.

Moreover, confidence among depositors and manufacturers declined as NPLs reached about 36 per cent of total loans.

Throughout the year, operations in Bangladesh’s industrial sectors — particularly the textile sector — were severely affected by frequent interruptions in gas supply, with factories receiving only 2-5 PSI, well below the required 15 PSI.

Due to the persistent gas shortage, production at textile mills fell by nearly 30-35 per cent, industry insiders said.

Mohiuddin Rubel, former BGMEA director, said that intensified labour unrest, including road blockades and factory closures, also disrupted production and deliveries.

‘Moreover, the country experienced a complete shutdown of the customs house for the first time — an event rare globally — which severely impacted exports,’ he added, noting that a significant fire at the cargo village of Hazrat Shahjalal International Airport destroyed garment shipments worth about $1 billion, directly cutting export earnings.

At the same time, he added, the removal of export incentives and the reduction of the Bangladesh Bank’s Export Development Fund to $2 billion also hurt the sector.

On November 17, 2025, the interim government amended the Bangladesh Labour Act to simplify trade union formation, introduce enhanced maternity benefits, mandate provident fund contributions and reduce the minimum wage review cycle from five to three years.

Bangladesh also ratified ILO Conventions C190, C155 and C187, becoming the first South Asian nation to ratify all 10 fundamental conventions.

While worker rights groups widely praised these reforms, industry stakeholders expressed concerns about rising compliance costs and administrative burdens.

Among the mentioned issues, a silent trade war with India was also on, as India imposed a ban on imports of several jute products and ropes through land ports on August 11, following similar import bans on several jute and woven products through land ports on June 27, leaving Kolkata and Mumbai ports open.

Earlier on May 17, India imposed restrictions on the import of most Bangladeshi products, including RMG, processed foods and agro-products.

On April 9, India withdrew the trans-shipment facility it had granted to Bangladesh for exporting various items to the Middle East, Europe and other countries, except Nepal and Bhutan, following Bangladesh’s March 28 ban on importing yarn from India through land ports.

Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said that Bangladesh had failed to resolve key issues that continued to erode its competitiveness.

Despite these headwinds, Bangladesh achieved some positive milestones in 2025.

During January-September period 2025, Bangladesh’s exports to the US reached $6.42 billion, marking 18.64 per cent growth, according to OTEXA data, while exports to Europe also rose by 9.45 per cent to 16.67 billion euros.

The country maintained its growth trajectory despite intense competition from rival exporters.

According to World Trade Organisation data, Bangladesh remained the world’s second-largest RMG exporter in 2024, with a global market share of 6.9 per cent.

Throughout 2025, Bangladesh also retained its leadership in green transformation, with 38 RMG factories receiving certification from the US Green Building Council for Leadership in Energy and Environmental Design in 2025, bringing the total number of LEED-certified garment factories to 270.

‘As the industry moves forward, the challenge will be to build on this foundation by integrating green factories with low-carbon operations, circular production models and digital sustainability reporting,’ said Mohiuddin Rubel.

The progress achieved in 2025 showed that Bangladesh is not only ready for this transition but is already leading it, he added.

Regarding recommendations for 2026, Mustafizur Rahman said that Bangladesh must address issues related to product and market diversification, reduce the cost of doing business, ease port congestion and develop a comprehensive logistics solution.

‘Bangladesh should focus on attracting more foreign direct investment and implementing a national logistics policy,’ he added, noting that all measures must be taken with the country’s LDC graduation scheduled for November 2026 in mind.

Inamul Haq Khan said that industry players remained cautious about a recovery in 2026 as the global economy continued to face turmoil.

‘However, an elected government could boost buyers’ confidence, as they closely monitor the February election,’ he added.

Echoing similar sentiments, Shovon Islam said that elections and the formation of a political government could help restore confidence.

‘Buyers are focusing on the February elections and they are highly concerned. If a fair election takes place on time, it could significantly boost buyers’ confidence,’ he added.

However, buyers have also expressed disappointment over attacks on media houses and cultural centres, which have tarnished the country’s image, he said.

He added that if political stability and law and order were restored, exports could begin to recover after April.

Mohiuddin Rubel said that Bangladesh must identify and address the root causes of factory closures and strengthen the financial sector’s capacity to provide stable and appropriate support to the industry in 2026.

‘It must also establish effective monitoring systems to ensure that new factories entering the sector align with and contribute to broader industrial development goals,’ he added.

Bangladesh’s competitiveness, he said, will depend on how quickly it can close infrastructure gaps, ease internal bottlenecks and move up the value chain — calling for stronger logistics, political and social stability, better factory-level efficiency and greater investment in research and development, innovation and marketing.​

 

[Saif]

RMG sector hits green milestone with 38 LEED certified factories in 2025

Bangladesh’s ready-made garment industry reached a milestone in sustainable manufacturing, securing 38 new United States Green Building Council’s Leadership in Energy and Environmental Design certifications in 2025...

www.newagebd.net

RMG sector hits green milestone with 38 LEED certified factories in 2025
Staff Correspondent 28 December, 2025, 00:21

Bangladesh’s ready-made garment industry reached a milestone in sustainable manufacturing, securing 38 new United States Green Building Council’s Leadership in Energy and Environmental Design certifications in 2025.

With these, the number of LEED-certified green garment factories reached 270, including 114 Platinum and 137 Gold facilities, 15 Silver, and 4 certified factories, the highest in the world.

In 2025, the most factories achieved LEED certification in a single year to date, according to data compiled by Bangladesh Apparel Exchange, a platform focused on research in the RMG sector.

Of the 38 newly certified factories in 2025, 22 achieved LEED Platinum, 11 LEED Gold, and 5 LEED Silver.

Moreover, none of the factories settled for basic certification, reflecting a clear shift from compliance-driven sustainability toward excellence-driven green transformation, said the BAE.

Mohiuddin Rubel, managing director of the BAE, said that the momentum gained in 2025 reflected broader global dynamics.

As international buyers, regulators, and consumers increasingly demand lower environmental footprints, Bangladeshi manufacturers are proactively aligning with evolving standards such as carbon efficiency, water stewardship, energy optimization, and climate-resilient infrastructure, said Rubel, also a former director of the Bangladesh Garment Manufacturers and Exporters Association.

‘LEED certification has thus become not only a sustainability benchmark, but a strategic competitiveness tool for the industry. This achievement signals a deeper transition as it demonstrates that Bangladesh’s RMG sector is preparing itself for the next phase of global sustainability requirements, including EU regulations, carbon pricing mechanisms, and digital transparency frameworks, while continuing to deliver at scale,’ he added.

According to industry insiders, 550 factories are now awaiting USGBC LEED certification.

Bangladeshi factories have been obtaining LEED certification since 2011.

The USGBC honours factories based on several criteria: transformation performance, energy, water, and waste management. The best performers are rated platinum, followed by gold and silver.

Industry insiders said that these criteria enable green factories to significantly reduce operational costs over time, even though they may initially incur higher setup costs.

According to apparel manufacturers, the move towards green factory buildings helped regain Bangladesh’s image after the Rana Plaza tragedy, which claimed 1,134 lives and left more than 2,000 injured.​

 

[Bilal9]

Spinners blame India for dumping yarn as imports surge 137%​

Local spinning mills are left with Tk 12,000 crore of unsold stock as cheap yarn from India floods the market, according to the Bangladesh Textile Mills Association (BTMA).

BTMA leaders say yarn imports from the neighboring country rose 137 percent during the April-October period this year, as Indian traders are dumping it in Bangladesh at more than $0.30 per kilogram below domestic prices.

For all latest news, follow The Daily Star's Google News channel.​

As a result, nearly 50 local spinning mills have closed in recent years after failing to survive the competition, said BTMA President Showkat Aziz Russell.

Speaking at a press conference at Gulshan Club in Dhaka yesterday, he added that one of his own mills has shut down, while another is struggling to stay afloat.

"These mills had an investment of Tk 500-Tk 700 crore each, and it is difficult to start them anew," he said.

The BTMA president said Bangladesh should reduce its dependence on Indian yarn. In the past, India stopped cotton exports to Bangladesh without any prior notice, causing severe losses for local spinners.

"If Bangladesh depends heavily on Indian yarn, they may stop supplying it suddenly, putting our garment sector in trouble," he said.

In April this year, Bangladesh imposed a ban on importing yarn from India through land ports to protect local textile producers from cheaper Indian yarn and promote domestic production. But the restriction does not cover imports through sea routes.

At the press conference, millers said they do not want a complete ban on Indian yarn. Rather, they advocated for reducing the bilateral trade gap, which now heavily favors New Delhi.

Besides, they called for import bans on certain yarn types abundantly produced domestically.

In his speech, Russell said the Indian economy is protective in nature. He said that once his company exported Royal Crown Cola to Kolkata, but the Indian government raised tariffs on the product within 15 days, affecting the business.

According to him, the total investment in the garment and primary textile sectors is more than $75 billion, including $23 billion in the primary textile sector. Combined, the two sectors contribute $40 billion in exports.

His recommendations included facilitating warehousing for cotton merchants to allow stockpiling of US cotton for use in local mills, as promised by Dhaka during reciprocal tariff negotiations.

At the program, other millers said they cannot compete with cheap Indian yarn, currently priced at $2.50 per kilogram, while local mills must sell at $3 per kilogram due to shortages of raw materials such as cotton.

They called for at least 10 percent cash incentives for garment exports that use locally spun yarn, an increase in the Export Development Fund (EDF) at lower interest rates, and reduced bank lending rates.

Former BTMA director Razeeb Haider described the influx as an act of "economic aggression", designed to "pressure" Bangladesh's primary textile sector. "Because of low prices, international clothing brands are also choosing Indian yarn over local yarn, severely affecting the spinning sector," he said.

Haider, managing director of Outpace Spinning Ltd, said that in fiscal year 2025-26, $2.0 billion worth of yarn was imported from India, with local mills using 1,600 tons daily. From April to October 2025, imports reached $950 million, a 137 percent increase year-on-year.

Bangladesh has become the largest destination for Indian yarn exports, receiving 44 percent of the total, while Cambodia ranks second at 21 percent, he added.

Former BTMA president A Matin Chowdhury said India provides incentives at multiple stages, from cotton growers to factories and exporters, making Indian yarn highly competitive.

Another former BTMA president, Mohammad Ali Khokon, said that Indian control of Bangladesh's backward linkage industries could eventually extend to the garment sector.

"Nearly 40 to 50 mills have closed, and more face the threat of shutdown. Amendments to the labor law may also provoke unrest," he said.

At the program, BTMA President Russell urged the government to introduce policy support within 72 hours to save the textile sector.

With 25 percent cash incentives, back-to-back LC facilities, and the EDF, he said the sector could still grow.

 

[Saif]

Spinners blame India for dumping yarn as imports surge 137%​

Local spinning mills are left with Tk 12,000 crore of unsold stock as cheap yarn from India floods the market, according to the Bangladesh Textile Mills Association (BTMA).

BTMA leaders say yarn imports from the neighboring country rose 137 percent during the April-October period this year, as Indian traders are dumping it in Bangladesh at more than $0.30 per kilogram below domestic prices.

For all latest news, follow The Daily Star's Google News channel.​

As a result, nearly 50 local spinning mills have closed in recent years after failing to survive the competition, said BTMA President Showkat Aziz Russell.

Speaking at a press conference at Gulshan Club in Dhaka yesterday, he added that one of his own mills has shut down, while another is struggling to stay afloat.

"These mills had an investment of Tk 500-Tk 700 crore each, and it is difficult to start them anew," he said.

The BTMA president said Bangladesh should reduce its dependence on Indian yarn. In the past, India stopped cotton exports to Bangladesh without any prior notice, causing severe losses for local spinners.

"If Bangladesh depends heavily on Indian yarn, they may stop supplying it suddenly, putting our garment sector in trouble," he said.

In April this year, Bangladesh imposed a ban on importing yarn from India through land ports to protect local textile producers from cheaper Indian yarn and promote domestic production. But the restriction does not cover imports through sea routes.

At the press conference, millers said they do not want a complete ban on Indian yarn. Rather, they advocated for reducing the bilateral trade gap, which now heavily favors New Delhi.

Besides, they called for import bans on certain yarn types abundantly produced domestically.

In his speech, Russell said the Indian economy is protective in nature. He said that once his company exported Royal Crown Cola to Kolkata, but the Indian government raised tariffs on the product within 15 days, affecting the business.

According to him, the total investment in the garment and primary textile sectors is more than $75 billion, including $23 billion in the primary textile sector. Combined, the two sectors contribute $40 billion in exports.

His recommendations included facilitating warehousing for cotton merchants to allow stockpiling of US cotton for use in local mills, as promised by Dhaka during reciprocal tariff negotiations.

At the program, other millers said they cannot compete with cheap Indian yarn, currently priced at $2.50 per kilogram, while local mills must sell at $3 per kilogram due to shortages of raw materials such as cotton.

They called for at least 10 percent cash incentives for garment exports that use locally spun yarn, an increase in the Export Development Fund (EDF) at lower interest rates, and reduced bank lending rates.

Former BTMA director Razeeb Haider described the influx as an act of "economic aggression", designed to "pressure" Bangladesh's primary textile sector. "Because of low prices, international clothing brands are also choosing Indian yarn over local yarn, severely affecting the spinning sector," he said.

Haider, managing director of Outpace Spinning Ltd, said that in fiscal year 2025-26, $2.0 billion worth of yarn was imported from India, with local mills using 1,600 tons daily. From April to October 2025, imports reached $950 million, a 137 percent increase year-on-year.

Bangladesh has become the largest destination for Indian yarn exports, receiving 44 percent of the total, while Cambodia ranks second at 21 percent, he added.

Former BTMA president A Matin Chowdhury said India provides incentives at multiple stages, from cotton growers to factories and exporters, making Indian yarn highly competitive.

Another former BTMA president, Mohammad Ali Khokon, said that Indian control of Bangladesh's backward linkage industries could eventually extend to the garment sector.

"Nearly 40 to 50 mills have closed, and more face the threat of shutdown. Amendments to the labor law may also provoke unrest," he said.

At the program, BTMA President Russell urged the government to introduce policy support within 72 hours to save the textile sector.

With 25 percent cash incentives, back-to-back LC facilities, and the EDF, he said the sector could still grow.

When the Indians cannot compete with the local businesses they start dumping yarn to increase their export to Bangladesh. The Bangladesh government should take some anti dumping measures to stop the Indians from dumping yarn into Bangladesh.