Bangladesh's apparel exports: An overview

05 September 2023, Mumbai

Headwinds and tailwinds for Bangladesh's apparel exports

• Headwinds:
  • Devaluation of the national currency, making raw materials and machinery imports expensive
  • Energy crisis
  • Decline in orders and being squeezed price-wise
• Tailwinds:
  • US-China trade war, making Bangladesh a preferred replacement for China
  • Bangladesh's move to portfolio diversification and value-added items
  • Bangladesh's continued production during the pandemic
  • Bangladesh's ability to move away from basic to value-added garments
  • Bangladesh's efforts to meet sustainable standards

Good tidings for Bangladeshi exporters

• A 15% year-on-year growth in apparel exports in April 2023
• The US is the main driver of this growth, as it is reducing its reliance on Chinese imports
• Bangladesh is also benefiting from the Sino-US trade war
• However, Bangladesh is not the only country that is benefiting from this situation, and it is important to remain competitive

Bangladesh has remained dependable

• Bangladesh continued production during the pandemic, even when other countries were shutting down
• This earned the trust of importers, who are now looking to Bangladesh as a reliable supplier
• Bangladesh has also shown its ability to move away from basic to value-added garments

The year 2023 may not live up to expectations

• Despite the good news, the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is not convinced that 2023 will be a good year for apparel exports
• This is because garment imports by the US and the EU have declined in the first five months of the year

Conclusion

• Bangladesh's apparel exports are facing both headwinds and tailwinds in 2023
• The country needs to continue to diversify its products and meet sustainable standards in order to remain competitive
• However, the long-term outlook for Bangladesh's apparel exports is positive, as the country is well-positioned to benefit from the US-China trade war and the growing demand for apparel from emerging markets.

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