Bangladesh’s garment exports to the European Union (EU) have come under mounting pressure as China strengthens its position in the bloc’s apparel market and Vietnam records further growth.
Bangladesh’s apparel export earnings from the EU fell 11.67% year-on-year to €11.93 billion in the first eight months of 2026, down from €13.50 billion in the same period last year.
The decline represents a loss of €1.57 billion in export earnings.
The EU imported €60.29 billion worth of clothing from around the world during January–August, down 3.83% from a year earlier. Import volumes fell 2.57%, while the average price per kilogram declined 1.29%.
The European apparel market experienced a sharp downturn at the beginning of 2026, with imports falling by nearly 10% year-on-year during January–April. Imports dropped 15.48% in January alone.
However, the market began to recover from May. EU apparel imports rose approximately 2.6% year-on-year during May–August, narrowing the overall decline for the first eight months.
Retailers entered 2026 with substantial inventories from the previous year, while higher energy costs linked to the Middle East conflict, inflation and weakening consumer confidence constrained spending and reduced new orders.
Improved retail sales in the spring and demand for autumn and winter collections subsequently helped lift imports.
Lower Prices Deepen Bangladesh’s Losses
Bangladesh’s export earnings were hit by declines in both shipment volumes and average prices.
The volume of apparel imported from Bangladesh fell 4.58% year-on-year to approximately 866.76 million kilograms during January–August. Meanwhile, the average price per kilogram dropped 7.43% to €13.76.
Bangladesh’s share of the EU apparel import market by value consequently declined from 21.5% to 19.8%.
The figures indicate that falling prices, alongside lower shipment volumes, contributed significantly to the decline in export earnings.
China Strengthens Market Dominance
China consolidated its position as the EU’s largest apparel supplier, exporting clothing worth €19.71 billion during the eight-month period, up 2.38% year-on-year.
Its share of the EU market increased from 30.7% to 32.7%, making it the only major supplier to record growth in both export value and volume.
Vietnam also expanded its presence, with apparel exports to the EU rising 4.46% to €3 billion. The average price of Vietnamese garments increased 10.11%.
Pakistan recorded a 3.82% increase in export volume, but its average garment price fell 12.96% to €10.88 per kilogram, the lowest among major suppliers.
Meanwhile, apparel exports from Turkey, India, Sri Lanka and Indonesia to the EU declined by around 11% each.
Tougher Competition Expected in 2027
The European Commission’s spring 2026 economic forecast projected EU economic growth of 1.1% in 2026 and 1.4% in 2027, with inflation expected to ease to 2.4%.
However, prolonged conflict in the Middle East could push up energy, shipping and insurance costs, further weakening economic growth and consumer demand.
Protests over the cost of living in France on October 17 reportedly damaged around 1,500 shops, while average sales at clothing stores fell 14% that day. Protests were also reported in Belgium, Italy and Portugal.
Weak Christmas-season sales could prompt European retailers to reduce new orders early next year, adding to the pressure on Bangladesh’s garment exporters.
Changes to the EU’s Generalised Scheme of Preferences (GSP), expected to take effect in January 2027, and plans for an India-EU free trade agreement could also reshape competition in the European market.
Industry Calls for Higher-Value Products
Mohiuddin Rubel, a former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and founder and chief executive officer of Bangladesh Apparel Voice, said the European market was showing signs of a gradual recovery, but Bangladesh’s exports remained under pressure.
He said the decline in average selling prices had contributed significantly to the fall in export earnings, adding that Bangladesh needed to focus not only on increasing shipment volumes but also on producing higher-value garments.
Rubel stressed the importance of diversifying products, strengthening long-term relationships with buyers, improving production capacity and ensuring timely deliveries.
He also warned that potential changes in European trade policies and a possible India-EU free trade agreement could intensify competition in 2027.
Bangladesh’s ability to retain its market position will depend on improving product quality, productivity and value addition while making effective use of its manufacturing expertise and supply-chain capabilities.
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