The textile and ready-made garments industry of Bangladesh has been the pioneering industrial sector leading the country’s export basket, employment generation, and contribution to the GDP. The industry developed through thick and thins, has become the backbone of the economic development of Bangladesh. Parallelly, the industry also plays an important role in the global clothing market, accounting for around 6% of the market share. It seems merely 6%, but it is the second-highest market after China, making Bangladesh one of the big players in the sector. With a lot of challenges to shoulder through, and with a big ambition, the textile industry is set to conclude the year 2025 and start 2026.
With $39.5 billion in exports, which is around 8% higher than the same period last year, is an impressive number taking in account the economic, environmental and political turmoil the industry has been going through. It still contributes more than 80% of the total export basket, over 10% of overall GDP, and employing more than 4 million workers directly. Considering on average 5 people in every family, the industry directly and indirectly impacts over 20 million people of the country which is about 1/10th of the total population. Plus, considering the allied sectors and service industry serving the existing because of the textile and garments industry, supports more than 30 million people, making it the social backbone of the country. In 2026, while the challenges are not going away, but as always, new year comes with new aspirations and motivations, new learnings from the mistakes in the previous years and new positive resolutions that promise better results.
The government set up a goal of $63.5 billion total exports by FY 2025-2026, while expecting around $44.49 billion coming from textiles and garments exports. Asian Development Bank (ADB) predicts the RMG exports may reach $50 billion in the next FY. The current growth rate (8%) takes the exports to around $43 billion which is closer to the government (BGMEA) target. However, due to the slowdown in the global market, some metrices are predicting only 5-6% growth in exports from Bangladesh, which may result is falling short from the target. China is forecasted to export around $170 billion in this time-period staying at the top of the chart. Although China is leading the chart, Bangladesh’s major competitor will be India and Vietnam.
Although, Bangladesh is still in an advantageous position in terms of tariffs to pay in the USA market, India may gain advantages in other important market. Such as UK, where they have managed to secure a zero-tariff deal in garments exports. Studies suggest it can potentially double India’s textiles exports to UK. Bangladesh’s exports to UK are in the order of $4 billion whereas India’s garments exports to UK is just shy of $2 billion. With the new trade agreement, India is going to become the most competitive.
Vietnam also has an ambitious but achievable target of around $48-$49 billion exports of textiles and garments combined. Vietnam has significant edge over Bangladesh in preferential trades. The EU-Vietnam FTA offering near zero-duty access to the EU market, the Trans-pacific Partnership (TPP) providing preferential trade in 12 major countries including USA is big potential for them to grow more as costs increase in Bangladesh. As Bangladesh graduates from LDC, many of the preferential trade benefits including the EBA (everything but arms) with EU will start eroding, making made-in-Bangladesh product less price competitive for the buyers.
However, Bangladesh has curved its path forward amid all the challenges with its resiliency and exemplary sustainable practices. The major shift towards sustainable production boasting numerous LEED-certified factories is a great selling point of made-in-Bangladesh products. Moving beyond basic garments, Bangladesh is expanding into more complex, higher-value items like outwear, technical apparel, and tailored wears helping capture more value-added market share. Still, there is a need to enhance factory productivity, as we are still in the lower side compared to the competitors.
We need to strengthen the backward linkage textile industry. Overdependence on imported cotton is a set-back however, it can be overcome with strategic long term trade partnerships with cotton exporters. Dumping of Indian yarn in the local market is resulting in losses for the local spinners. The government need to come up with proper policy and enforcement supports to back our local spinners. Still more than 70% of the export order are cotton based whereas the global market is heavily shifting towards synthetic fibers. This is a challenge and opportunity altogether if we can capture enough of the man-made-fiber produced garments orders.
Overall, Bangladesh is ending 2025 on a good note, as far as the exports are concerned, but many challenges are ahead as we move on to 2026. We have ambitious targets and the means to achieve that. Bangladesh needs to ensure timely steps are taken to be future ready and continue to excel in the global textile and apparel market.
References:
Statistical data from recent news portals, trade magazines with author’s own analysis.
