Spain Becomes Bangladesh’s Largest RMG Export Destination in EU, Surpassing Germany

Spain has emerged as Bangladesh’s largest readymade garment (RMG) export market in the European Union (EU), overtaking Germany as exports to the country grew by 13.73% year-on-year in the first quarter of FY2026-27.

According to Export Promotion Bureau data, Bangladesh exported garments worth $1.148 billion to Spain during July-September, compared to $1.123 billion to Germany.

In the same period of FY2025-26, Germany held the top position with exports of $1.124 billion, while Spain accounted for $1.009 billion.

During the latest quarter, exports to Spain increased by $138.62 million, while shipments to Germany declined slightly by 0.15%. An official from the Dhaka office of an EU-based fashion brand suggested that increased sourcing from Bangladesh by Spain-based Inditex could be a major factor behind the growth.

Meanwhile, Bangladesh’s overall RMG exports to the EU increased by 3.33% to $4.904 billion during July-September, compared to $4.746 billion in the corresponding period last year, marking a rise of $157.92 million.

Other EU markets also recorded growth, with exports to the Netherlands rising by 9.02% and Poland by 5.77%. However, shipments to France dropped by 4.91%, while exports to the remaining EU countries collectively declined by 2.24%.

In September alone, Bangladesh’s garment exports to the EU grew by 5.53% year-on-year to over $1.410 billion. Poland registered the highest monthly growth among the five major EU markets, with shipments increasing by 30.25% compared to the same month last year.

Source: The Business Standard

Bangladesh’s non-cotton garment exports on the rise

The share of non-cotton garments in Bangladesh’s total garment exports rose to 30.7 percent in the January-September period of 2026, thanks to rising demand from international clothing retailers and brands, according to data from the Export Promotion Bureau.

Total garment exports from Bangladesh stood at $29.91 billion in the nine months to September this year.

Cotton garments accounted for $20.75 billion, or 69.3 percent, while non-cotton garment exports amounted to $9.17 billion, or 30.7 percent, according to the data.

The share of non-cotton garments rose throughout the year. The monthly average was 28 percent in January and February, surpassed 30 percent for the first time in June, reaching 31.6 percent, and peaked at 34.6 percent in August before falling to 32.6 percent in September.

Non-cotton exports reached their highest monthly value in July, at $1.31 billion, according to the data. However, cotton is still the backbone of the sector. Monthly cotton exports ranged between $1.97 billion and $2.6 billion during the nine-month period.

Source: The Daily Star

·      Bangladesh RMG Exports Grow 6.1% in Q1

Bangladesh’s ready-made garment (RMG) exports rose 6.1% year-on-year to $10.58 billion in the first quarter of fiscal 2026-27 (July-September), according to Export Promotion Bureau (EPB) data.

The European Union remained the largest market, with exports reaching $4.9 billion, up 3.33%. Shipments to the United States increased 10.4% to $2.22 billion, while exports to the United Kingdom rose 5.94% to $1.29 billion and Canada grew 3.85% to $349.65 million.

Exports to non-traditional markets increased 9.4% to $1.81 billion, accounting for 17.13% of total RMG shipments. By product category, knitwear exports grew 6.88%, while woven garment exports rose 5.11%.

Source: The Business Standard

• Is Bangladesh’s low-cost garment model running out of steam?

Bangladesh’s readymade garment (RMG) sector is facing mounting challenges as international clothing retailers and brands diversify their sourcing destinations. Rising production costs, energy shortages, geopolitical tensions and uncertainty over preferential market access after the country’s graduation from the least developed country (LDC) category are putting pressure on exporters.

The challenges are exposing the limits of a business model built on low production costs and competitive prices. Although many manufacturers have started moving towards higher-value products, the transition remains gradual.

The situation has raised questions about how well Bangladesh can compete as costs rise and trade preferences come under pressure.

Recently, Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that several major international retailers and brands that had sourced garments from Bangladesh for years were shifting some work orders to other destinations for strategic reasons.

The prolonged energy crisis has further weakened buyers’ confidence, as some suppliers have struggled to meet shipment deadlines.

Meanwhile, geopolitical conflicts and Houthi attacks on commercial vessels in the Red Sea have disrupted shipping routes connecting Asia with Europe and North America. With vessels increasingly rerouting around the Cape of Good Hope instead of travelling through the traditional Suez Canal, shipping journeys have become longer and more expensive.

These disruptions have also encouraged buyers to consider sourcing from countries closer to European markets, including Egypt and Ethiopia, to reduce logistical complications and shipping risks.

THE LIMITS OF A LOW-COST MODEL

Bangladesh established itself as a major global manufacturing hub for basic garments from the early 1980s, capitalising on an abundant labour force and low production costs.

That model helped the country become a leading apparel exporter in the world. But rising production expenses, combined with continued pressure on garment prices, are making it increasingly difficult to sustain the same competitive advantage.

In the European Union, Bangladesh’s garment export unit price is less than half that of Vietnam, reflecting, in part, the limited share of higher-value products in the country’s export basket.

Eurostat data show that the average unit price of garments exported from Bangladesh to the EU fell to €13.80 per kilogramme in January-June this year, from €15.07 in the same period of 2025.

By contrast, Vietnam’s average unit price rose to €29 per kg from €25.95 over the same period. China’s garment export unit price to the EU fell by 2.18 percent.

Among major garment suppliers to the EU, Bangladesh remains one of the cheapest, with only one supplier recording a lower average unit price.

Although many Bangladeshi manufacturers have started exporting higher-value products, the transition remains gradual. According to industry estimates, high-end garments account for 30 to 40 percent of the sector’s output, suggesting considerable scope for upgrading.

The government has been considering a gradual phase-out of export cash incentives, which supported exporters during the sector’s development, ahead of Bangladesh’s graduation from the LDC category.

On top of that, following LDC graduation, Bangladesh will face growing pressure to compete without relying on existing preferential trade arrangements.

The possible loss of duty-free market access is a particular concern. Unless Bangladesh secures the European Union’s GSP+ facility or negotiates a free trade agreement (FTA), exporters could face higher tariffs in a market that absorbs nearly 60 percent of the country’s garment exports, worth more than $25 billion annually.

Average duties on RMG products could approach 12 percent, further eroding the price advantage of Bangladeshi suppliers.

LABOUR AND INVESTMENT PRESSURES

The challenges extend beyond production costs and trade policy. After nearly five decades of growth, the first generation of garment entrepreneurs is ageing, while some second- and third-generation successors are struggling to sustain the traditional business model.

Several older factories are closing, and fresh investment in the sector is gradually slowing.

The workforce is also shrinking, particularly among women. Long working hours, demanding workloads and relatively low wages have discouraged younger workers from entering the industry.

According to the BGMEA, women made up roughly 80 percent of Bangladesh’s garment workforce between 1980 and 1994. The figure fell to 70 percent by 2005 and to around 53 percent in both 2021 and 2023.

Industry insiders say younger workers increasingly prefer occupations such as driving auto-rickshaws or operating small shops, which they perceive as offering “greater flexibility and a more comfortable lifestyle”.

Automation and artificial intelligence are adding another dimension to the challenge, as factory owners adopt new technologies to reduce costs and remain competitive.

Meanwhile, some female garment workers have moved to countries such as Jordan, attracted by higher salaries, greater dignity and better employment benefits.

Despite these difficulties, Bangladesh has made significant progress in workplace safety and compliance. Inspections and remediation initiatives under the Accord and Alliance have improved factory safety standards, helping strengthen the country’s international reputation.

However, improved compliance alone will not guarantee continued competitiveness. Exporters must also contend with rising costs, supply-chain disruptions and the risk of losing preferential access to major markets.

THE WAY FORWARD

Bangladesh retains important advantages, including substantial installed production capacity and a large, experienced workforce capable of serving international retailers and brands.

The challenge is to build on these strengths while reducing dependence on price competition in basic garments.

One option is to diversify export destinations. Markets such as India, Japan, South Korea, Malaysia, Brazil and Argentina could help reduce dependence on traditional Western markets.

Bangladesh has been pursuing trade agreements to preserve preferential access after LDC graduation. These initiatives include an Economic Partnership Agreement with Japan and a Comprehensive Economic Partnership Agreement with South Korea, alongside negotiations with other countries.

According to BGMEA, international buyers had become concerned about concentrating too much of their sourcing in Bangladesh, prompting them to diversify their supply chains.

Nevertheless, Bangladeshi exporters are increasingly targeting Asian markets, particularly Japan, India and South Korea.

BGMEA has also urged the government to negotiate with the United States to waive the 10 percent duty on garments using US cotton and man-made fibres. Expanding exports of higher-value man-made fibre products could further improve the sector’s prospects.

However, market diversification and trade agreements will need to be accompanied by improvements in domestic production conditions.

Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said the garment industry was confronting numerous domestic and international challenges, with rising business costs being a central concern.

He emphasised that Bangladesh must strengthen its competitiveness by reducing production expenses, increasing prices per unit through value addition, ensuring adequate energy supplies and lowering logistics costs. The sector’s long-term sustainability will ultimately depend on whether Bangladesh can move beyond its traditional reliance on low-cost production, according to the economist.

Modernising factories, upgrading products, diversifying markets and securing favourable trade arrangements will be crucial as the country navigates the post-LDC era, he said.

Source: The Daily Star

·      HAMS Garments Recognised for World’s Highest-Scoring LEED Platinum Certification

HAMS Garments Ltd has received global recognition for achieving the highest score worldwide under the LEED Platinum certification programme of the US Green Building Council (USGBC).

HAMS Garments is also recognised for its work in chemical management. It was the first factory in Bangladesh to pilot sustainable chemical practices in partnership with Zero Discharge of Hazardous Chemicals (ZDHC).

Source: Textile Today

• Bangladesh’s RMG Exporters Concerned Over Falling EU Orders as Unrest Grows and Costs Rise

Bangladesh’s readymade garment (RMG) exporters are concerned that ongoing protests in several European countries could further weaken apparel demand, while rising production costs and increasing competition threaten the industry’s competitiveness.

Protests in France, Italy, Spain, Belgium, and Portugal have raised fears of slower economic growth and reduced consumer spending. Exporters warn that prolonged instability could lead to fewer orders from European buyers.

Fazlee Shamim Ehsan, CEO of Fatullah Fashion Limited and Executive President of BKMEA, said a French buyer recently put an agreed order on hold amid concerns over the economic impact of the protests.

According to the Export Promotion Bureau (EPB), the European Union accounts for approximately 50% of Bangladesh’s total exports, making it the country’s largest export destination.

Eurostat data show that the EU’s apparel imports declined by 1.29% during January-August 2026, while Bangladesh’s garment exports to the bloc dropped by 12.67% year-on-year. However, EPB figures indicate signs of recovery in August and September.

Industry leaders remain divided over the impact of the protests. While some fear further disruptions, Sparrow Group Managing Director Shovon Islam believes the broader European economic slowdown is a more significant factor behind declining orders.

Meanwhile, the government’s withdrawal of bonded warehouse facilities for importing 10-30-count yarn has added to exporters’ concerns. Manufacturers say the restrictions could force greater reliance on more expensive locally produced yarn.

Fakir Fashions Managing Director Fakir Kamruzzaman Nahid urged the government to remove the yarn import restrictions, warning that continued cost pressures could shift potential orders to competing countries, including Vietnam, Cambodia, India, and Pakistan.

Exporters also highlighted energy shortages, rising wages, and growing competition from countries such as India and Vietnam as additional challenges.

Source: The Business Standard

• Govt moves to form RMG wage board amid Tk 30,000 wage demand

The government has asked owners and workers’ organisations to nominate their respective representatives aiming to form wage board to review wages for the country’s garment sector amid labour protests demanding Tk 30,000 as monthly wages.

Benchmark Pay

In this connection, the Department of Labour (DoL) has sent separate letters to the Bangladesh Employers’ Federation and Jatiyatabadi Sramik Dal, asking them to nominate three representatives each and submit their photographs and National Identity (NID) card details.

When asked, Abdus Samad Al Azad, director general of DoL, confirmed DoL has asked them to nominate their representatives for the proposed wage board, paving the way for a fresh review of wages in the country’s largest export-oriented industrial sector.

The move comes as garment workers have been demanding wage hikes amid rising inflation and living costs. Labour leaders argue that the current minimum wage of Tk 12,500—set in November 2023 and effective December 2023—is insufficient against high inflation and soaring living costs.

Recent amendments to the labour law reduced the wage revision cycle from five years to three years, making a review timely as the three-year mark approaches, they noted.

The minimum wage for garment workers was Tk 1,662.50 in 2006, revised to Tk 3,000 in 2010, Tk 5,300 in 2013, Tk 8,000 in 2018, and Tk 12,500 in 2023.

Source: The Financial Express

• Longteng Garment to Invest $17 Million in Mongla EPZ

Chinese company Longteng Garment Co Ltd is set to invest $17 million in establishing a ready-made garment factory at Mongla Export Processing Zone (EPZ), creating employment opportunities for 3,005 Bangladeshis.

The factory will be established on 16,426.37 square metres of land and will manufacture underwear and bras, with an expected annual production capacity of 6 million pieces.

According to BEPZA, the company’s products are intended for international brands including Aerie, Calvin Klein, Zara, Tesco, ASOS, and Primark. Its major buyers include H&M, Walmart, Marks & Spencer, and Gap.

As of September 2026, Mongla EPZ had 39 operational enterprises, with another 10 under implementation. The zone has attracted $271.74 million in investment, recorded cumulative exports of $1.7 billion, and generated employment for 16,212 Bangladeshis.

Source: The Daily Sun

·      Inditex Warns Policy Changes Could Affect Bangladesh’s Garment Orders

Inditex, one of the European Union’s largest buyers of Bangladeshi garments, has warned that frequent policy changes are raising production costs and delaying deliveries, potentially pushing global buyers towards competing countries.

At a meeting with Commerce Minister Khandaker Abdul Muktadir in Dhaka, company officials raised concerns over the withdrawal of bonded warehouse facilities for certain cotton yarn counts, restrictions on yarn imports through land ports and the cancellation of the transshipment facility. Inditex reportedly purchases around $2.5 billion worth of garments from Bangladesh annually.

Fakir Kamruzzaman Nahid, director of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said local prices for 10 to 30-count cotton yarn had risen from an average of $3.15 to as high as $3.70 per kilogram following the withdrawal of bonded facilities. He warned that higher costs could discourage buyers from placing orders in Bangladesh.

Meanwhile, BGMEA and BKMEA have urged jointly the government to reverse the decision, saying unpredictable policy changes have weakened buyer confidence and disrupted supply-chain planning.

The Bangladesh Textile Mills Association (BTMA) said duty-free yarn imports remain possible under the existing bank-guarantee system. It said the withdrawal of bonded facilities was intended to prevent misuse and protect government revenue.

A meeting involving the three trade bodies failed to reach a consensus on the issue. BGMEA and BKMEA rejected a proposal to withdraw bonded warehouse facilities for yarn imports of 14 to 28 counts.

Source: The Financial Express