Bangladesh's garment industry, a crucial pillar of the country's economy, is currently grappling with a troubling situation due to a significant decrease in the volume of garment exports to major destinations. This decline has raised concerns about the industry's future.

Faruque Hassan, the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has highlighted during a press conference, the potential crisis looming over the industry, particularly concerning exports to the United States and the European Union (EU).

While garment export earnings exhibited positive growth until February, both the US and EU experienced a decline in imports. The months of March and April witnessed alarmingly negative growth in garment shipments, and this trend is expected to continue into May.

According to the BGMEA's report, there was a 12.65% year-on-year decline in garment exports to the US in terms of US dollars between November 2022 and April 2023. In terms of quantity, the decline amounted to approximately 25.95%. However, the value per unit of garment items increased by 17.94%. This increase in unit price can be attributed to the rising costs of raw materials and freight charges. As a result, international retailers and brands have been compelled to adjust their pricing strategies.

In contrast, garment exports to the EU increased by 7.10% in terms of US dollars. However, there was a decline of 4.12% in terms of quantity. The value per unit of garment items increased by 11.70%.

To address these challenges, Hassan called upon the government to implement several measures. These included reducing the source tax to 0.5%, lowering corporate tax on subcontracting incomes to 12%, and withdrawing the 10% tax on cash incentives for export earnings. Furthermore, he urged the government to provide a special 10% stimulus for the export of garments made from manmade fibers (MMF) and emphasized the importance of diversifying the types of garment items exported.

Hassan emphasized the high global demand for non-cotton items, as 75% of all garment items sold worldwide are made from non-cotton fibers. Encouraging investment in MMF-based garments could enable Bangladesh to capture a larger share of the global garment market.