The ready-made garment (RMG) sector in Bangladesh is contending with a contraction in demand that extends well beyond its primary Western markets. While traditional hubs like the European Union and the United States have long dominated export statistics, the recent 5.95 per cent decline in shipments to non-traditional markets during the July-May period of FY25-26 signals a more pervasive cooling in global procurement. Once viewed as the critical hedge against market volatility, destinations such as Australia, Japan, and India have reported double-digit or near-double-digit reductions in intake, illustrating that the current downturn is a structural challenge rather than a regional anomaly.
Shifting competitive dynamics
Industry stakeholders attribute this cooling to a confluence of global economic sluggishness and intensified regional competition. Exporters are navigating a complex landscape where key competitors, backed by aggressive policy support and incentives, are increasingly capturing the share of orders that historically flowed to Bangladeshi manufacturers. The data reflects a recalibration of global consumption patterns, notes Mohiuddin Rubel, Former Director, BGMEA. As global retailers adopt cautious, lean inventory strategies in response to persistent inflation, the pressure on Bangladesh to offer superior value beyond competitive pricing has reached a critical inflection point. For many factories, the challenge is now to secure long-term partnerships that prioritize transparency and technical reliability over simple volume-based transactions.
Resilience through structural upgrading
Despite these headwinds, the sector remains the engine of the national economy, with manufacturers increasingly shifting to high-value garment production and synthetic fiber integration to reclaim competitiveness. While energy-related bottlenecks and rising production costs continue to dampen factory capacity, the strategic focus is shifting toward sustainability and circular manufacturing. By accelerating investment in green production technologies and digital supply chain traceability, the industry aims to align itself with the heightened ethical and compliance requirements of modern global brands. This transition, while demanding significant capital, is essential for Bangladesh to solidify its position as a high-trust partner in a global market that no longer rewards volume at the expense of agility.
World’s second largest apparel exporter
Bangladesh is the world’s second-largest apparel exporter, with RMG accounting for over 84 per cent of its total export earnings. The sector spans thousands of factories focused on knit and woven apparel. While traditionally reliant on the EU and US, it is currently prioritizing product diversification, sustainability, and technological integration to scale.
