Dhaka, Aug 11, 2025 — Bangladesh’s central bank has warned that the country’s ready-made garment (RMG) exports to the United States — its single largest market — face mounting challenges from a prolonged export slump, persistent tariff burdens, and shifting global trade dynamics.
In a new report, the central bank says the sector could still see gains if exporters diversify products, improve efficiency, and cut production costs. But without political stability and strategic adaptation, it cautions that the industry risks a deeper slowdown.
U.S. exports falling for nearly two years
Garment shipments to the U.S. have been trending downward for almost two years. In the 2023–24 fiscal year, exports fell from $2.07 billion in the July–September quarter to $1.73 billion in April–June. In the most recent fiscal year, they stood at $1.85 billion in July–September, $1.99 billion in October–December, $1.90 billion in January–March, and $1.81 billion in April–June.
Although shipments to Bangladesh’s nine major markets rose by 7.13% in April–May compared with January–March, they were still 8.79% lower than nearly two years ago.
Tariff hurdles and competitive pressures
Bangladesh’s chief competitors in the U.S. garment market — India, Vietnam, Sri Lanka, and Cambodia — face similar tariffs of around 19%–20%, except India, which is subject to a steep 50% duty. Bangladesh’s own tariff rate is 20%, placing it on par with most rivals.
“Given the similar tariff burdens and the government’s policy support for exporters, there is potential for growth,” the central bank report notes. “But the need for stability is urgent.”
Market diversification under way
The U.S. remains Bangladesh’s largest single garment export market, accounting for $1.81 billion in the last quarter, followed by Germany at $1.15 billion. Other key destinations include the UK, Spain, France, the Netherlands, Italy, Canada, and Belgium.
Exports to emerging markets — including Japan, Australia, China, several African countries, and Middle Eastern states — are showing early signs of growth.
Risks from regional restrictions and global slowdown
The report identifies India’s recent restrictions on importing Bangladeshi garments via land routes as an immediate threat, with shipments to that market already falling. The global economic slowdown and evolving trade policies could further pressure the sector, while U.S. tariff levels remain a persistent hurdle.
“It remains to be seen how entrepreneurs will adapt to these challenges,” the report concludes.
