Between July and November 2019, garment exports declined 7.74 per cent.

During the first fortnight of December exports declined by more than three per cent. One reason for falling garment exports is a significant increase in production costs because of the implementation of the minimum wage in December last year. Poor efficiency and the relatively higher cost of doing business are chipping away at Bangladesh’s trade competitiveness. Concentration of the industry on a few product items and to a handful of markets is a challenge. In the last eleven months to November, 61 factories were shut down, rendering 31,600 workers jobless.

The source tax on garment exports has been lowered to 0.25 per cent. The industry says this has to be done with retrospective effect and wants conditions attached to the one per cent special incentive to be withdrawn along with the tax on incentives. Another helpful factor is said to be a devaluation of the currency, especially for manmade fiber garment and synthetic fiber garment exports. This is expected to enable product diversification to take place automatically.

The garment industry has to increase its efficiency at least by 30 per cent if it wants to be more competitive globally and this can be done only through efficient management practices, technology selection and product and market diversification.