Bangladesh is set to fortify its position as a premier global textile hub following the Council of Advisers' approval to sign a landmark Economic Partnership Agreement (EPA) with Japan on January 22, 2026. Scheduled for formal execution on February 6, 2026, this treaty grants immediate duty-free access to 7,379 Bangladeshi products. For the textile and apparel sector, the agreement is transformative, providing zero-tariff entry for Ready-Made Garments (RMG) from day one. This proactive move effectively safeguards Bangladesh’s competitive edge as it navigates its scheduled graduation from Least Developed Country (LDC) status, ensuring that the 10–12 per cent tariff cliff typically associated with graduation is bypassed in the Japanese market.
Technical concessions and rules of origin
A critical victory for the industry is the inclusion of the ‘Single Stage Transformation’ facility. Unlike more restrictive trade regimes that require double transformation (yarn-to-fabric-to-garment), this provision allows apparel made from imported fabrics to qualify for duty-free status, offering immense flexibility to manufacturers. This EPA is a milestone that secures our $1.5 billion annual export footprint in Japan while inviting sophisticated Japanese technology into our backward linkage industries, stated Sheikh Bashir Uddin, Commerce Adviser. The deal also opens 120 Japanese service sub-sectors to Bangladesh, facilitating high-tech knowledge transfers in specialized textile machinery and sustainable dyeing processes.
Countering global headwinds
The EPA arrives as a vital counterbalance to shifting global trade dynamics, including recent tariff fluctuations in the US and EU markets. By securing the world’s fourth-largest economy, Bangladesh aims to diversify its export basket beyond basic knits into high-value functional wear and technical textiles. The agreement is projected to catalyze a fresh wave of ‘China Plus One’ investments, with several Japanese retailers already signaling plans to relocate production lines to Bangladesh's Special Economic Zones to leverage the new duty-free corridor.
