Originally posted in New Age on 8 January 2026
JULY-DECEMBER FY26
Bangladesh RMG exports lose ground in US, EU
Bangladesh’s ready-made garment exports lost momentum in most major destinations in the first half (July–December) of the current financial year 2025–26 amid mounting domestic and global challenges.
During the first half of FY26, exporters grappled with domestic issues, including political tensions that weakened buyers’ confidence in Bangladeshi manufacturers.
Global pressures, including weak demand, economic slow down, tariff-related complications, and inflationary pressures, also weighed on export performance.
According to detailed country-wise export data from the Export Promotion Bureau, Bangladesh exported RMG items worth $19.37 billion in the first half of FY26, marking a 2.63 per cent decline from $19.88 billion earned in the same period of FY25.
The downturn was more pronounced in the United States, European Union, non-traditional markets, and other destinations, although shipments to the United Kingdom and Canada narrowly avoided negative growth.
Exporters reported that buyers had lost trust in the country’s administration, leading them to either adopt a cautious approach or redirect their orders to alternative sourcing destinations.
Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said that Bangladesh’s export slowdown could not be attributed solely to the weak global economy.
‘Buyers lost confidence due to political instability. For example, during 2024–25, the government failed to control unrest in major RMG hubs, particularly Ashulia, which sent negative signals to buyers,’ he said.
As a result, buyers shifted orders to alternative sourcing countries, he added.
‘Although US tariffs affected Indian exports, when European buyers considered shifting orders from Bangladesh, they opted for India instead,’ he said.
During July–December of FY26, Bangladeshi exporters recorded a 4.41 per cent decline in shipments to the EU—the largest destination for Bangladesh’s apparel exports—to $9.46 billion, down from $9.87 billion in the same period of FY25.
Export earnings from the EU accounted for more than 48 per cent of Bangladesh’s total RMG export revenues during the period.
Exports to major EU countries such as Germany, France, Denmark, and Italy declined in the first half of FY26, although moderate growth was recorded in Spain, the Netherlands, and Poland.
After witnessing positive growth for the first five months, export earnings from the United States also slipped into negative territory, falling by 0.1 per cent to $3.83 billion in July–December FY26, compared with $3.84 billion in the same period of FY25.
The US, the largest single-country destination for Bangladeshi apparel, accounted for around 20 per cent of total RMG export earnings, according to EPB data compiled by the Bangladesh Apparel Exchange, a private initiative promoting the country’s apparel and textile industry.
Bangladesh earned $2.21 billion from the UK in the first six months of FY26, registering a marginal 2.13 per cent increase from $2.16 billion in the same period of FY25.
From Canada, RMG exports reached $671 million during the reporting period, up 4.66 per cent from $643 million in the corresponding period of the previous financial year.
Exports to Germany declined by 11.4 per cent to $2.19 billion in July–December FY26, compared with $2.47 billion in the same period of FY25, EPB data showed.
Shipments to France fell by 10.89 per cent to $972 million from $1.09 billion, while exports to Italy declined by 5.04 per cent to $733 million from $772 million during the same period.
However, exports to Spain stood at $1.8 billion, while shipments to the Netherlands and Poland amounted to $1.08 billion and $864 million, respectively, all of which posted low to moderate growth in the first half of FY26.
In the apparel trade, the US, Canada, the UK, and the EU are considered traditional markets, while other destinations are classified as non-traditional.
Major non-traditional markets include Japan, Australia, Russia, India, China, South Korea, the United Arab Emirates, Malaysia, Brazil, and Mexico.
Despite hope, export earnings from non-traditional markets have declined since October.
During July–December FY26, exports to non-traditional destinations fell by 5.52 per cent to $3.18 billion, compared with $3.37 billion in the same period of FY25.
Non-traditional markets accounted for 16.45 per cent of Bangladesh’s total RMG exports during the period.
Among these destinations, exports to Japan declined by 0.75 per cent to $598 million in the first half of FY26, down from $602 million in the same period of FY25.
Exports to Australia plunged by 12.44 per cent to $377 million, while shipments to India declined by 10.44 per cent to $337 million. Exports to Mexico fell sharply by 18.66 per cent to $150 million, EPB data showed.
RMG exports to other major non-traditional markets also recorded declines.
Exporters also said that the withdrawal of incentives and certain government policies adversely affected the sector, particularly small and medium-sized factories.
Regarding incentives, BKMEA president Mohammad Hatem 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, while Bangladesh has been gradually withdrawing cash incentives,’ he said.
Exporters said that the new US tariff regime has created significant disruptions in global trade and negatively affected Bangladesh’s exports to the US and other regions.
Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association, said that global demand had weakened significantly, while Bangladesh’s concentration on basic, low-priced products limited its pricing flexibility.
He emphasised the need for product and market diversification, along with a transition to 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.
He cautioned that the coming months would be challenging 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 stressed that innovation, reduced lead times, lower costs of doing business, and product and market diversification were now essential.
‘We must roll out these policies now, as the time to keep them on the shelf has ended,’ he said.
Exporters also expressed optimism that exports could rebound from May or June if a fair election restores political stability and buyers’ confidence.
In FY25, the RMG sector earned $39.35 billion from global markets.
