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Challenges Slowing Growth
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Supply Chain and Market Risks
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Opportunities for Expansion
Bangladesh is the world’s second-largest clothing exporter. In the 2024/25 financial year, the country earned US$39.35 billion in clothing exports. The industry has set an ambitious target of US$100 billion by 2029/30. However, achieving this goal requires overcoming several challenges, according to Textiles Intelligence’s 51-page report Prospects for the Textile and Clothing Industry in Bangladesh, 2025.
Challenges Slowing Growth
Between 2018/19 and 2024/25, export growth averaged only 2.4% per year. This slow pace was partly due to macroeconomic shocks such as the COVID-19 pandemic and the war in Ukraine. Additionally, domestic factors have affected growth, including economic slowdown, currency depreciation, high inflation, political instability after the government collapse in August 2024, and inefficient infrastructure, particularly transport and port services.
Supply Chain and Market Risks
Bangladesh’s textile industry relies heavily on imported cotton and fabric. This dependence increases costs and extends lead times, especially as the taka depreciates, squeezing manufacturers’ margins. Moreover, exports are concentrated in a few markets, mainly the EU and USA, making the industry vulnerable to trade restrictions. For instance, the USA imposes a 20% “reciprocal” tariff on Bangladeshi clothing. Graduation from least developed country (LDC) status in 2026 will also subject exports to higher tariffs unless compliance with stricter rules of origin is ensured.
Opportunities for Growth
Despite these challenges, there is reason for optimism. The government supports foreign investment and the development of export processing and economic zones. Global brands such as Gap, H&M, Levi’s, and Zara continue to invest in Bangladesh, improving factory safety and sustainability. The country leads the world in LEED-certified “green” factories.
Additionally, the industry has potential to diversify into higher-value products and man-made fibre clothing. Currently, Bangladesh mainly produces cotton garments, which represent only 25% of global apparel demand, while man-made fibre accounts for around 70%. Expansion into this segment could drive export growth significantly.
