Originally posted in New Age on 5 January 2026
Exports fall by 2.19pc in H1 amid weak demand
Bangladesh’s export earnings declined by 2.19 per cent year-on-year in the first six months of the current financial year 2025-26, reflecting prolonged weakness in global demand and growing competitive pressure in major markets.
Export receipts during July–December of FY26 stood at $23.99 billion, down from $24.53 billion recorded in the same period of the previous financial year, according to the latest data released by the Export Promotion Bureau on Sunday.
The decline deepened in December, when export earnings fell for the fifth consecutive month, plunging by 14.25 per cent year-on-year to $3.97 billion, compared with $4.63 billion in December 2024.
The contraction was driven mainly by weaker shipments of readymade garments, Bangladesh’s primary export earner, alongside declines in agricultural products and several non-traditional export sectors.
Exporters said shipments have remained in a downward trend since August, the second month of the current fiscal year, citing weak global demand, fewer buyer inquiries, and intense competition—particularly in European markets.
In the first half of FY26, export earnings from the readymade garments sector declined by 2.63 per cent to $19.36 billion, down from $19.89 billion in the corresponding period of FY25.
In December alone, RMG exports fell by 14.23 per cent year-on-year to $3.23 billion from $3.77 billion, according to EPB data.
Both knitwear and woven garments posted declines. Knitwear exports dropped by 3.22 per cent to $10.48 billion, while woven garments fell by 1.91 per cent to $8.88 billion during July–December of FY26.
In December, knitwear earnings declined by 13.74 per cent to $1.63 billion, while woven garments posted a sharper fall of 14.71 per cent to $1.6 billion.
Among other sectors, agricultural exports declined by 10.30 per cent to $534 million in the first half of FY26, compared with $596 million a year earlier.
Leather and leather goods registered a positive growth of 5.61 per cent to $610 million, up from $577 million in the same period of FY25.
Jute and jute goods recorded a marginal growth of 0.31 per cent, reaching $419 million, while home textiles grew by 2.93 per cent to $423 million.
Engineering products posted the highest growth, rising by 26.17 per cent to $316 million during the first six months of the current fiscal year.
The EPB said that weakening global demand, reciprocal tariffs imposed by the United States, increased competition from China and India, rising production costs, and ongoing geopolitical and trade uncertainties have exerted significant pressure on Bangladesh’s export performance.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said that the country’s export growth has remained in negative territory over the past few months, mainly due to global trade disruptions.
The new US tariff regime has caused significant upheaval in global export markets and has also affected Bangladesh’s exports to the US.
‘We are not receiving work orders as expected. US tariffs have reshaped the global market, reduced sales, and led to fewer orders,’ he said.
He also said that China and India were aggressively offering significantly lower prices in European and other markets.
‘The Indian government has introduced new incentive packages to support its exporters, including in the last week, India announced another such measure, and on Sunday, they approved a support package worth Rs 70 billion,’ he added.
In contrast, Bangladesh has been gradually withdrawing cash incentives for exporters, citing the IMF programme and the country’s graduation from the least developed country status.
The remaining cash incentive scheme expired in December, and exporters have already urged the government to renew it, he added, saying that the labour law has worsened the situation.
He warned that without such support, the survival of exporters would be at risk and that overall export trade could be seriously disrupted.
Export orders usually decline ahead of national elections, he added, saying that this is also the case this year.
However, he expressed optimism that if the government engages with industry stakeholders and takes appropriate policy decisions after the election, export performance could return to a positive trajectory from June onwards.
Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association, said global demand had weakened significantly, while Bangladesh’s focus on basic, low-priced products limited its pricing flexibility.
He stressed the need for market and product diversification and a shift towards higher-value products to remain competitive.
Professor Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, described the persistent decline in exports as a warning signal.
‘Competition in European and other markets has intensified as China and India aggressively capture orders displaced by US tariffs,’ he said.
He warned that 2026 would be challenging for exporters due to LDC graduation and the scheduled national election, adding that Bangladesh might struggle to meet its export target for the current fiscal year.
He also said that innovation, reduced lead times, and cost reductions in doing business, as well as product and market diversification, could be significant.
‘We must roll out these policies now as the time to keep them on the shelf has ended,’ he added.
Bangladesh’s export earnings stood at $48.28 billion in FY25, up 8.55 per cent from $44.47 billion in FY24, according to EPB data.
