The Bangladesh ready-made garment (RMG) sector is transitioning from a period of severe operational volatility toward a strategic stabilization phase. Fiscal Year 2024-25 concluded with apparel exports reaching $39.34 billion, a resilient 8.84 per cent growth despite a sequence of unprecedented disruptions. The industry weathered a ‘perfect storm’ in 2025, including a devastating airport cargo fire that caused an estimated $1 billion in losses, political transitions, and a 9 per cent statutory wage hike. While export momentum slowed to a 2.53 per cent increase in the January–November 2025 window, a decisive diplomatic breakthrough - capping US ‘reciprocal’ tariffs at 20 per cent instead of the feared 35 per cent - has significantly revived buyer confidence and order flows for the upcoming spring/summer 2026 season.
Modernization and high-value diversification
To counter rising overheads and the withdrawal of traditional export incentives, manufacturers are accelerating a move into high-margin segments. This shift is evident in the 9.73 per cent growth of knitwear exports ($21.15 billion) compared to the 7.82 per cent rise in woven garments. Leading players are diversifying into Man-Made Fibers (MMF) and functional outerwear to bridge the gap as Bangladesh prepares for its 2026 LDC graduation. The 2025 shocks acted as a catalyst for efficiency; we are no longer just a volume hub but a partner in complex, technical fashion, notes Senior Director, BGMEA.
Sustainability as a shield against global headwinds
Environmental, Social, and Governance (ESG) compliance has become the sector’s primary defense against intensifying competition from Vietnam and India. Bangladesh now leads the world with over 240 LEED-certified green factories, a status that attracted significant order diversions in late 2025 as European retailers tightened circularity requirements. Despite the closure of approximately 113 underperforming units over the last 15 months, the establishment of 128 sophisticated, automated factories signals a structural consolidation. Industry experts project a robust recovery starting in the second quarter of 2026, supported by eased inflationary pressures and a more stable domestic energy grid.
Bangladesh is the world's second-largest apparel exporter, with the RMG sector contributing 81 per cent of national export earnings. Dominating in knitwear and woven categories, the industry targets a $100 billion export goal by 2030. Originally built on low-cost basics, it is now a global leader in green manufacturing and sustainable fashion.
