For more than four decades, Bangladesh’s Ready-Made Garment (RMG) industry has been the backbone of the country’s economic development. Contributing nearly 80% of national export earnings and providing employment to around 04 million workers—most of whom are women—the industry has transformed not only the country’s economy but also millions of lives.
Today, however, the industry stands at a critical crossroads.
According to the World Trade Organization (WTO), Bangladesh retained its position as the world’s second-largest apparel exporter in 2025, with exports reaching US$38.82 billion and accounting for 6.76% of global apparel exports. While this achievement reflects the industry’s resilience and global significance, Bangladesh’s apparel export growth was only 0.89% in 2025, considerably lower than several regional competitors. Vietnam recorded exports of US$37.51 billion, growing by 10.53%, driven largely by its strength in man-made fibre (MMF) apparel, sportswear, and technical textiles. Cambodia posted an impressive 16.88% growth, benefiting from shorter lead times and flexible manufacturing capabilities, while India achieved 5.47% growth in key apparel categories through its fully integrated textile value chain and strong performance in cotton trousers and formalwear. These trends clearly demonstrate that global competitiveness is increasingly determined not by labour costs alone, but by innovation, product diversification, supply chain resilience, operational efficiency, and sustainability.
Bangladesh’s long-term competitiveness can no longer rely solely on low production costs. The next decade will be defined by how effectively the industry embraces innovation, sustainability, technology, and value creation.
Global sourcing priorities are evolving rapidly. While competitive pricing remains important, international brands are increasingly prioritizing reliable production, sustainable manufacturing, shorter lead times, digital capabilities, and resilient supply chains. At the same time, Bangladesh’s post- LDC trade environment is becoming more challenging. On 17 June 2026, the European Union adopted Regulation (EU) 2026/1395, introducing stricter eligibility requirements and safeguard provisions under its new Generalised Scheme of Preferences (GSP), applicable from 1 January 2027. Although Bangladesh is expected to continue benefiting from duty-free access under the Everything But Arms (EBA) scheme until approximately 2029, the new framework highlights the urgent need to strengthen backward linkages, diversify into higher-value and man-made fibre (MMF) products, enhance competitiveness, and pursue both GSP+ eligibility and an EU–Bangladesh Free Trade Agreement (FTA).
Increasingly, global brands are seeking sourcing partners that can deliver:
Reliable and resilient production
Sustainable and responsible manufacturing
Traceability and responsible sourcing
Faster and more flexible lead times
Innovative, value-added products
Digital integration and supply chain transparency
Robotics and automation
Lower environmental and carbon footprints
These changing market dynamics present a significant opportunity for Bangladesh. By leveraging its strong manufacturing ecosystem, investing in clean energy, accelerating digital transformation, diversifying into higher-value products, and strengthening sustainability practices, the country can reinforce its global competitiveness. Achieving this transition, however, will require stronger backward linkages, greater investment in research and product development, wider adoption of man-made fibre production, enhanced workforce skills, and closer collaboration among the government, manufacturers, buyers, technology providers, and development partners.
One of the industry’s most pressing challenges is energy security. Reliable electricity and gas have become strategic assets for export competitiveness. Production disruptions caused by energy shortages increase operating costs, delay shipments, and weaken buyer confidence. Investing in renewable energy, rooftop solar, energy-efficient technologies, and resilient industrial infrastructure is no longer only an environmental priority—it is a business and economic imperative.
Another major opportunity lies in moving up the value chain. While Bangladesh has built its success on cotton-based apparel, future growth will increasingly come from man-made fibre (MMF) garments, sportswear, technical textiles, outerwear, performance apparel, and other value-added products. Diversifying both products and export markets will strengthen long-term competitiveness while reducing dependence on basic apparel manufacturing.
Technology will also play a defining role in the industry’s future. Artificial Intelligence (AI), automation, digital production planning, predictive analytics, and Industry 4.0 are no longer technologies of the future—they are competitive necessities today. Factories that embrace digital transformation will improve productivity, reduce waste, enhance quality, shorten lead times, and strengthen long-term partnerships with global brands.
Bangladesh has already established itself as the global leader in sustainable apparel manufacturing, with 290 LEED-certified garment factories recognized by the U.S. Green Building Council (USGBC)—the highest number of any country in the world. These include 125 Platinum, 145 Gold, and 20 Silver/Certified factories, demonstrating the industry’s commitment to world-class environmental performance rather than minimum compliance. Remarkably, 52 of the world’s top 100 highest-rated LEED-certified garment factories are located in Bangladesh, further reinforcing its leadership in sustainable manufacturing. In addition, more than 550 factories are currently registered and pursuing LEED certification, demonstrating the industry’s continued commitment to green manufacturing. Building on this achievement through greater adoption of renewable energy, circular economy initiatives, responsible chemical management, efficient water use, and carbon reduction will further strengthen Bangladesh’s reputation as a responsible and sustainable sourcing destination.
While Bangladesh retained its position as the world’s second-largest apparel exporter, the relatively modest export growth recorded in 2025 should serve as a catalyst for accelerating productivity, innovation, product diversification, energy security, and value addition across the entire supply chain. The industry’s next phase of growth must be driven by higher efficiency, stronger capabilities, and greater competitiveness rather than increased production volume alone.
Ultimately, Bangladesh’s success will not be measured simply by the number of garments it exports. It will be defined by the value it creates, the technology it adopts, the sustainability it delivers, and the confidence it inspires among global buyers.
Bangladesh has consistently demonstrated its resilience by turning challenges into opportunities. The tragic Tazreen Fashions fire in 2012 and the Rana Plaza collapse in 2013 became defining moments for the industry, prompting one of the most comprehensive workplace safety reform programmes in global manufacturing history. Over the past decade, the sector has made remarkable progress in strengthening structural, electrical, and fire safety, improving compliance, enhancing transparency, and promoting sustainable manufacturing. These achievements have restored international confidence and positioned Bangladesh as a global benchmark for responsible apparel production.
As the industry enters its next phase of development, continued investment in infrastructure, renewable energy, workforce development, innovation, technology, and supportive public policies will be essential. Strengthening backward linkages, expanding MMF production, encouraging research and development, and fostering closer collaboration between the public and private sectors will further enhance Bangladesh’s global competitiveness.
The future belongs to industries that innovate, diversify, embrace technology, and create sustainable value. Bangladesh has already proven its ability to adapt, compete, and lead on the global stage. With strategic investment, supportive policies, stronger public-private collaboration, and continued commitment to sustainability and innovation, the coming decade can become not only the country’s most transformative chapter but also the period in which Bangladesh sets the global benchmark for responsible, competitive, resilient and sustainable apparel manufacturing.
Mohammad Mosabberul Hasan
Director – International Associates Bangladesh Ltd.
Lead Auditor – Labour Standards
