Apparel News in Brief for September, 2025
- Bangladesh’s Exports Slip in August Despite Strong Start to FY26
Bangladesh’s merchandise exports fell 2.93 per cent year-on-year in August 2025, dropping to US$3.91 billion from $4.03 billion a year earlier, according to Export Promotion Bureau (EPB) data. The decline came after a strong July performance, when exports rose nearly 25 per cent to $4.77 billion. Despite the August setback, overall exports for the first two months of FY26 grew 10.61 per cent year-on-year to $8.68 billion.
Readymade garments (RMG) made up $3.16 billion of August’s earnings, down 4.75 per cent from August 2024. Within RMG, knitwear exports fell 6.34 per cent to $1.77 billion while woven garments decreased 2.65 per cent to $1.39 billion. Still, the sector posted 9.63 per cent year-on-year growth during July–August FY26, earning $7.13 billion compared to $6.50 billion last year.
EPB noted that July’s strong results underscored resilience, while August’s slowdown reflected challenges from global demand shifts. Fazlee Shamim Eshan, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), explained that the August 2024 comparison may be misleading because many factories were closed for at least 10 days that year. He added, “We had fewer work orders, especially from the European Union,” pointing to factory closures in Ashulia during August and September 2025 as another factor. Exporters also cited advanced July shipments to avoid potential higher US tariffs under the Trump administration, which reduced August volumes.
Other sectors posted mixed results. Home textile exports grew 12.68 per cent to $139.02 million in July–August. Leather and leather goods earned $228.76 million, up 13.68 per cent, though leather footwear exports fell 11.18 per cent in August. Agricultural exports increased 3.96 per cent, led by a 58.13 per cent surge in vegetable shipments to $174.67 million. Jute and jute goods rose 6.96 per cent to $118.56 million, frozen and live fish jumped 32.45 per cent to $81.55 million, and pharmaceuticals grew 26.12 per cent to $36.46 million.
Source: The Financial Express
- US buyers push Bangladeshi exporters to partly absorb tariff costs
Since August, when the US imposed a 20% reciprocal tariff on Bangladeshi apparel, some buyers have sought to transfer between 5% and 7% of the added cost onto suppliers, while others want them to carry the full burden
Highlights:
- US imposes 20% reciprocal tariff on Bangladeshi apparel
- Buyers push suppliers to absorb part of tariff costs
- Some factories accept losses; others risk losing US orders
- Industry groups urge fair price negotiations with US buyers
- Bangladesh’s apparel exports to US rise 22% despite tariffs
- Competitive edge fades as cost-sharing pressures undercut tariff advantage
Exporters in Bangladesh had hoped for a competitive boost when the United States set its reciprocal tariff on Bangladeshi goods slightly below rates imposed on some rivals. But that edge appears to be slipping away, as US buyers increasingly pressure suppliers to absorb part of the higher duty.
Since August, when the US imposed a 20% reciprocal tariff on Bangladeshi apparel, some buyers have sought to transfer between 5% and 7% of the added cost onto suppliers, while others want them to carry the full burden. Those who comply can secure orders, while those who resist are left with contracts hanging in limbo, several industry representatives told. Shovon Islam, Managing Director of Sparrow Group, said US buyers have asked his company to bear one-quarter of the new tariff, particularly for spring, summer, and fall collections. “Out of necessity, we confirmed those orders,” he said. “Buyers have made it clear they will now set prices themselves.” Sparrow, which produces about 40 million pieces of garment annually, half for the US, is absorbing about 5 percentage points of the tariff. A garment that previously sold for $100 now costs $120 in the US, but the factory captures only part of that increase.
Rakibul Alam Chowdhury, managing director of Chattogram-based HKC Apparels, said he has refused to shoulder the added cost, leaving many orders unconfirmed. “Our profits are minimal, sometimes at break-even,” said Rakibul, whose factory employs 6,500 workers and ships more than 90% of its products to the US. “We cannot take loss-making orders. If necessary, we may reduce factory size, but further losses are unsustainable.” “They expect us to manage it. I can’t take on this pressure, so orders are not being confirmed,” he added.
Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), confirmed that some buyers have pressed suppliers to share the burden, while others have stood firm. “One company in the association negotiated and agreed to cover a portion,” he said.
Abdullah Hil Nakib of Team Group, for instance, said his company’s buyers are accepting the higher prices without pushing for discounts.
Buyers admit shifting part of cost
Some buyer representatives acknowledge asking for partial cost-sharing. A country director of a major US brand said, “Many retailers are bearing more than half of the increased tariff, but margins are very slim. Suppliers are being asked to bear between 1% and 3%. The rest will eventually fall on US consumers.”
A senior officer at a Dhaka buying house told that nearly all their buyers are from the US. “They have agreed to bear half of the new tariff and asked us to manage the other half. We ourselves are absorbing some pressure, while requesting other suppliers, such as fabric, yarn, and accessories providers, to take on some of the price pressure. Otherwise, securing orders would be difficult,” he said. Major buyers including Walmart and two Gap Inc subsidiaries did not respond to requests for comment.
Associations push back
Inamul Haq Khan Bablu, senior vice president of BGMEA, said factories are producing garments at very low profit or break-even. Under these conditions, price negotiation should adjust for the new tariff. He added that weak negotiation capacity among some factory owners gives buyers an advantage, and offering discounts risks misleading buyers about garment owners’ profits.
Mohammad Hatem of BKMEA added, “We have instructed our members to calculate the new tariff and conduct price negotiations accordingly.”
Tariff dynamics
The US first announced a 35% additional tariff on Bangladeshi goods in April to address its trade deficit, before temporarily applying a 10% duty on all countries during talks. Following negotiations, Bangladesh’s final reciprocal tariff was set at 20% in August, compared to 25% on India (later raised to 50%), 20% on Vietnam, 19% on Pakistan, and higher rates on China.
The rate is lower than some competitors, but exporters say the expected surge in orders from countries facing steeper tariffs has yet to materialise. Bangladeshi garments previously entered the US market at around 16.5% duty. With the new 20% reciprocal tariff, the effective rate now stands at 36.5%.
According to US Department of Commerce data, apparel imports reached $45.8 billion between January and July, up 5% year-on-year. Imports from China dropped 21%, while Bangladesh’s shipments rose 22% to $4.92 billion.
Bangladesh ranks among the US’s top apparel suppliers alongside Vietnam, China, India, Indonesia, and Cambodia. Leading buyers include Walmart, VF Corporation, Levi Strauss, Target, Fruit of the Loom, Gap Inc., Tapestry, and PVH.
Source: The Business Standard
- Bangladesh Apparel Exports to India Up Despite Ban
Bangladesh’s apparel exports to India rose 16.5 per cent in August 2025 despite restrictions on land port shipments. According to the National Board of Revenue (NBR), exports reached $86 million in August, up from $69.2 million in the same month last year.
In the three months from June to August following the ban, apparel exports grew 15 per cent year-on-year to $183.5 million compared to $159.1 million in the same period of 2024. Currently, all shipments go by sea through Chittagong port. Before the ban, 69 per cent of exports went through land ports, 30 per cent through Chittagong, and about 1 per cent by air.
India, Bangladesh’s eighth-largest export destination and top Asian market, imported $1.82 billion worth of goods from Bangladesh in FY 2024-25. Of this, apparel accounted for 36 per cent and other products for 64 per cent.
India has imposed three land port restrictions in the past four months. On 17 May, it banned apparel imports through land ports, keeping only Mumbai’s Nhava Sheva Port and Kolkata port open. Goods must now be shipped from Chittagong to Nhava Sheva via Colombo, requiring four container handlings and raising both cost and transit time.
Source: Textile Today
- Experts urge fair labour market transition to protect Bangladesh’s workers
Bangladesh’s labour market is under fresh strain from climate change, automation, and rapid technological shifts, raising fears of widening inequality, experts warned. They called for an urgent “just transition” policy to protect workers and ensure fair, inclusive growth.
AKM Ashraf Uddin, executive director of Bangladesh Labour Foundation, said workers outside social protection are the worst affected. “Automation is creating job loss risks. A just transition policy must be implemented now,” he stressed.
Labour Secretary Md Sanowar Jahan said Bangladesh’s greatest strength lies in its people—especially its youth and women. To fully harness this demographic dividend, he emphasised the need for skill development, sustainable employment opportunities, and stronger social safety nets.
Presenting research, Jahangirnagar University’s Sakhawat Hossain noted that textiles, leather, and footwear—accounting for 83.86% of total exports and employing nearly four million people—are already facing the adverse effects of climate change. The study of 747 workers found that 80% of RMG workers are women, the average age in leather is 31, and nearly half work 9–11 hours daily. He warned of rising health risks, living costs, and mental stress, underscoring the urgent need for reskilling, stronger health protection, and expanded social security.
Dutch Ambassador Joris van Bommel said Bangladesh and the Netherlands must deepen cooperation on labour challenges from digitalisation and AI, while ILO Country Director Max Tunon cautioned that global deficits in social justice remain stark. “If just transition does not happen, inequality will deepen further,” he said.
BGMEA Vice President Vidya Amrit Khan said Bangladesh’s 236 green factories are a start but stressed that “green buildings alone are not enough—circular economy and traceability systems are needed.”
Experts agreed that government, employers, workers, brands, and international agencies must act together to build a fair and sustainable industrial system for over 70 million workers.
Source: The Business Standard
- LDC graduation: milestone or risky leap?
Bangladesh is set to leave the least developed country (LDC) club next year after meeting UN criteria in two consecutive reviews. Graduation means crossing three thresholds: income per person, human development indicators and economic vulnerability. The UN reviews these every three years, and a country must pass twice before graduating.
Several nations have already done this, including Botswana, the Maldives and Bhutan. In 2026, Bangladesh will graduate alongside Nepal and Laos. What makes Bangladesh stand out is its size. With nearly 200 million people, we are by far the most populous country to graduate in recent times. The task is far more complex than for small nations.
Graduation will bring some benefits. It raises our profile as a creditworthy and growing economy and may attract more investment. It will make it easier to raise funds in global markets and negotiate trade deals as a developing country. It will also boost national confidence and send a message that Bangladesh is no longer seen as fragile.
But this recognition comes at a difficult time. Banks are burdened with bad loans, governance failures and declining public trust. Foreign currency reserves are low, making it harder to import fuel and raw materials. Inflation is pushing up prices, and families are cutting back on essentials. Investment is slow, and job creation is falling short of the needs.
Exports face mounting pressure. Most of our earnings come from garments, mainly to Europe and North America. Buyers now demand stronger labour rights, greener production and traceable supply chains. Meeting these standards will require investment and compliance.
Graduation also means losing the benefits we now enjoy. The European Union will continue providing duty-free access until 2029, but after that, we must qualify for GSP Plus by implementing 27 conventions on labour, human rights, environment and governance. The United Kingdom offers a similar transition, while the United States already imposes tariffs. Without GSP Plus, our exports could face 9-12 percent tariffs. We will also lose special treatment at the World Trade Organization and some concessional aid.
The pharmaceutical sector highlights another risk. Bangladesh produces almost all of its own medicines and exports to more than 150 countries thanks to a WTO waiver allowing us to make generic versions of patented drugs. This is why life-saving medicines are affordable. After graduation, that waiver will expire, and prices could rise sharply.
Some argue Bangladesh should ask for more time. This is technically possible in case of a major crisis, but a delay might signal weakness to investors and buyers. Others believe we should go ahead and use the three-year transition to push urgent reforms.
The next few years will decide whether graduation becomes a success story or a missed opportunity. We must clean up banks, control inflation and rebuild reserves. The government needs to raise more revenue and invest in power, ports and skills. Exporters must diversify into electronics, IT services, agro-processing and higher value pharmaceuticals. We must also prove to buyers that we can meet labour and environmental standards to retain market access after 2029.
Graduation is not the end of our story. It is the start of a tougher, more competitive chapter. If we act quickly and honestly, this moment can be a springboard to a stronger future. If we delay, we risk losing the very gains that brought us here.
Source: The Daily Star
