Bangladesh’s exports of readymade garments have not really taken off. One reason is a fall in orders from foreign buyers. After Brexit, the UK has reduced the price of readymade garment products. Following the price reduction, other EU countries have followed suit. Meanwhile production cost has increased by 17 per cent over the last three years. Interest on long-term loans is still high.
In fact, there are threats for Bangladesh as competitors like Vietnam are getting a bigger share and posting better growth in export earnings. Currently the country’s readymade garment products’ global share is 6.4 per cent while China’s market share stands at 39.3 per cent, topping the list. Buyers are keen on giving orders to rival countries. Clearly Bangladesh will have to produce quality products to compete in the global market.
Competing countries like China, Indonesia, Vietnam and Pakistan have already adjusted to the lower prices of the EU and UK as the governments of these countries have provided various incentives for exporting readymade garment products. But it has been tough for Bangladesh’s garment manufacturers to adapt to lower EU prices as they have not been provided similar incentives. As a result, export performance has declined.