While recent data indicates a 21.5 per cent monthly rebound in Bangladesh's ready-made garment (RMG) exports, industry observers caution that this figure serves as a statistical mirage rather than a definitive recovery. This spike is largely attributed to a favourable base effect, comparing against a period of unusually low performance in the previous year. Beneath the surface, the sector continues to grapple with a multi-month decline in order volumes across key European and American markets. Rakibul Alam Chowdhury, Former Vice President, Bangladesh Garment Manufacturers and Exporters Association, notes, the sector has remained under persistent pressure for the better part of the past year. Isolated monthly gains cannot mask the underlying erosion of market competitiveness and the mounting costs of doing business.
Escalating pressures on manufacturing margins
The RMG sector currently faces a confluence of systemic challenges, including high bank lending rates exceeding 14-15 per cent, volatile electricity tariffs, and the cumulative impact of annual wage adjustments. These financial burdens have rendered smaller, less efficient manufacturing units insolvent, with reports confirming the loss of at least 20,000 jobs during the first half of 2026. Furthermore, a shift in global sourcing strategies has seen competitors like Cambodia and Vietnam capturing market share by leveraging superior supply chain agility. As Bangladesh approaches its graduation from Least Developed Country status, the looming threat of reduced duty-free access to the European Union places additional urgency on the need for product diversification into high-value man-made fibre garments, which currently represent a disproportionately small fraction of the nation’s export basket.
A primary pillar of Bangladesh economy
The ready-made garment industry is the primary pillar of Bangladesh’s economy, accounting for over 84 per cent of total national exports. The sector focuses on high-volume apparel manufacturing for global retailers. Current growth plans emphasize a transition to man-made fibers and sustainable production, though financial performance faces volatility amid rising costs.
