Bangladesh’s ready-made garment industry is facing renewed pressure as exports to Europe decline sharply amid global economic uncertainty, rising production costs and an ongoing energy crisis.
According to updated data from the Export Promotion Bureau (EPB), Bangladesh earned $31.72 billion from garment exports during the first 10 months of the 2025–26 fiscal year, marking a 2.82 percent decline compared to the same period a year earlier.
The downturn has been driven largely by weakening demand in the European Union, Bangladesh’s largest apparel market, where exports fell by 4.38 percent to $15.54 billion. Industry analysts say persistent inflation, slow economic growth and higher living costs across Europe have forced consumers to reduce spending on non-essential products, including clothing.
Both major segments of the sector recorded declines, with knitwear exports dropping 3.68 percent and woven garment exports falling 1.83 percent.
In addition to shrinking demand abroad, manufacturers are struggling with mounting domestic challenges. Factory owners say rising wages, higher raw material prices, increased transportation costs and elevated bank interest rates have significantly pushed up production expenses.
The ongoing dollar shortage has also made imported inputs such as yarn, fabric and industrial chemicals more expensive, further squeezing profit margins for exporters already facing intense price competition from international buyers.
Energy shortages are adding to the pressure. Frequent power outages and low gas supply in industrial zones are disrupting production schedules and delaying shipments, raising concerns among foreign buyers over Bangladesh’s ability to deliver orders on time.
Industry leaders warn that global competitors including Vietnam, India, China, Turkey and Cambodia are strengthening their positions through advanced technology and more efficient manufacturing systems.
Despite the broader slowdown, Bangladesh recorded modest export growth in the markets of the United States, Canada and the United Kingdom during the same period. However, analysts say the gains were not enough to offset the losses in Europe.
Business leaders are calling for stronger policy support, improved energy supply, reduced corruption in customs and VAT administration, and greater investment in technology to help the industry remain competitive in the global market.
