Bangladesh’s Garment Sector Sees 32% Surge in Orders Over Two Months

Due to the new U.S. tariff policy, fresh opportunities have emerged for Bangladesh’s garment industry. International buyers are gradually shifting their focus from New Delhi, Islamabad, and Beijing toward the red-and-green flag of Bangladesh. Additionally, buyers from various regions of the world are flocking to Dhaka with new orders, leading to a significant increase in purchase orders in the ready-made garment (RMG) sector.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Export Promotion Bureau (EPB), and leading RMG exporters, the sector is witnessing a resurgence of opportunities. Since the first week of August, global buyers have shown strong interest in placing new export orders in Bangladesh. If this trend continues, purchase orders could potentially double from September onward.

Industry stakeholders report that over the past two months, purchase orders have increased by approximately 32% compared to the same period last year. In the first month of the current fiscal year, total export earnings grew by 25%. According to EPB data, garment exports alone generated $3.96 billion in July, accounting for roughly 83% of the country’s total exports. EPB Vice Chairman Anwar Hossain stated that if export orders are accepted based on buyer demand and shipments are completed on time, the first quarter of the fiscal year (July-September) could see export growth of 30-35% or more. If this momentum persists, the export target could be surpassed within eight months. Hossain further noted that not only RMG but also other products previously exported from China and India to the U.S. are now attracting buyers to Bangladesh. If entrepreneurs can fulfill their commitments, these buyers could become long-term partners. However, addressing the power and energy crisis and enhancing port capacity are critical to sustaining this growth. BKMEA President Mohammad Hatem revealed that over the past six to seven months, many buyers had shifted their import orders from China to India, anticipating challenges for Chinese exporters in the U.S. and European markets. However, the sudden imposition of additional U.S. tariffs on India has altered this trend. Coupled with labor shortages in Chinese garment factories, Bangladesh is well-positioned to capitalize on this opportunity. Hatem expressed optimism, stating that if all export orders are fulfilled as per current demand, the export sector could achieve 40-45% growth in the current fiscal year. However, he highlighted challenges such as investment and production bottlenecks, particularly due to banking sector issues. Banks are currently in recovery mode, aggressively pursuing loan repayments, but longstanding irregularities cannot be resolved overnight. Hatem emphasized that increasing interest rates or reducing credit flow would hinder business expansion, and a sustainable policy approach is needed to balance revenue collection and support for entrepreneurs. Former BGMEA Director Mahiuddin Rubel noted that exports typically slow down in July, August, and September, but this year has been an exception. Export earnings are rising, and new orders are pouring in. While large buyers traditionally placed orders, smaller buyers from the U.S. and European markets have started placing orders over the past month, contributing to significant export success. Rubel attributed this to Bangladesh’s favorable position compared to competitors like China and India, particularly after the U.S. implemented countervailing tariffs. He cautioned that while accepting additional orders, exporters must avoid offering discounts, as low prices could lead to long-term challenges. If buyers become accustomed to lower prices, they may resist paying fair rates later, potentially pushing manufacturers into financial distress despite increased export earnings. He recommended that the government form a task force to address these challenges.