The Apparel Digest Report
Bangladesh’s garment exports to Poland are rising despite an overall decline. However, payment risks and trade uncertainties remain major concerns.
Bangladesh’s garment exports to Poland have increased despite a decline in the country’s overall garment exports. According to the Export Promotion Bureau (EPB), garment exports to Poland grew by 9.8% to $1.86 billion in the fiscal year 2025–26. During the same period, Bangladesh’s total garment exports fell by 1.64%.
Readymade Garment (RMG) exports from Bangladesh to Poland have shown growth in recent years. Exports increased from $1.40 billion in FY23 to $1.54 billion in FY24 and $1.69 billion in FY25, before reaching $1.86 billion in FY26.
According to industry representatives, several factors have contributed to this growth. These include strong demand for basic garments, orders lost by Chinese suppliers, and changes in trade following the Russia-Ukraine war. Some industry leaders believe that Polish buyers are re-exporting garments to Russia, although there is no confirmed evidence showing how much of this clothing comes from Bangladesh.
Meanwhile, Bangladesh’s direct garment exports to Russia have declined since the war began in February 2022. Exports to Russia dropped from more than $665 million in FY21 to $257.26 million in FY26. Western sanctions restricted several Russian banks’ access to the SWIFT international financial messaging system, making it harder for Bangladeshi exporters to receive payments from Russian buyers.
Bangladesh also benefits from duty-free access to Poland under the European Union’s trade arrangements. This helps Bangladeshi garment exporters remain competitive in the Polish market.
However, payment problems remain a concern. According to industry representatives, 28 Bangladeshi garment exporters have been struggling to recover $5.2 million from a Polish buyer for nearly two years. The buyer’s business was reportedly disrupted by the Russia-Ukraine war.
The increase in exports to Poland is an encouraging sign for Bangladesh’s garment industry, particularly when overall exports are declining. It shows that opportunities still exist in international markets. However, the growth also raises questions about long-term stability, especially if some of the demand is connected to indirect trade with Russia.
The payment difficulties faced by exporters highlights another important issue. Higher export earnings are not enough if businesses struggle to receive their payments. Therefore, Bangladesh should focus on making payment arrangements more secure.
The Hopes (Drivers of Growth)
- Shifting Supply Chains: Polish buyers and international retailers have increasingly redirected sourcing toward Bangladesh as orders shift away from China.
- Regional Trade and Re-exports: Following the outbreak of the Russia-Ukraine war and direct trade/payment sanctions with Russia, some Polish importers have bought Bangladeshi garments in bulk for indirect re-export to the Russian market.
- Basicwear Demand & Duty-Free Access: Steady demand for affordable, basic apparel items paired with Bangladesh’s duty-free access to the European Union under Everything But Arms (EBA) terms keep local pricing competitive.
The Concerns (Risks & Challenges)
- Massive Payment Disputes: A major crisis erupted when Polish fashion giant LPP S.A.—which sources roughly $700 million a year from Bangladesh—halted payments and briefly suspended orders due to a $40 million arrears dispute tied to shipments channeled through the Russian retailer FES Retail. Though LPP later resumed operations after discussions with the BGMEA, it exposed severe counterparty and geopolitical risks.
- Smaller Unresolved Receivables: Aside from large retail standoffs, several smaller Bangladeshi composite and knitwear factories have faced prolonged difficulties recovering millions of dollars from other war-disrupted Polish buyers.
- Domestic & Macro Pressures: The growth in Poland contrasts with a broader contraction in other major EU destinations and the US, compounded locally by high energy costs, yarn import restrictions, and labor instability.
Bangladesh should take advantage of the growing demand in Poland by building stronger and more direct business relationships with European buyers. At the same time, finding new markets and relying less on uncertain trade arrangements could help exporters avoid future problems.
Poland is becoming an important market for Bangladesh’s garment industry and offers good opportunities for growth. However, the main challenge is to maintain this growth and build strong, long-term business relationships. Future success will depend not only on increasing exports but also on reducing risks and making sure exporters can fully benefit from these opportunities.
