Increasing export competitiveness

FE Team | Published: July 04, 2026 20:10:16

The overall export earnings of Bangladesh for FY2025–26 stood at US$48 billion as of June 2026, according to Export Promotion Bureau (EPB) data, against a target of US$55 billion. Although exports fell well short of the target, export earnings in June increased compared with June 2025. Moreover, the knitwear and woven ready-made garment (RMG) sectors recorded modest growth in June after experiencing slight declines in previous months.
Workers’ wages and yarn prices have increased, resulting in higher production costs. In addition, Bangladesh’s exports to the EU market have declined significantly. Although the overall EU market contracted, Bangladesh’s market share declined more sharply than that of its key competitor, China. This is a matter of serious concern.
Moreover, following India’s free trade agreement (FTA) with the EU, India is making strong efforts to expand its presence in the European market, which could pose a significant challenge to Bangladesh in the coming years. As the EU remains the largest destination for Bangladesh’s exports, this development warrants close attention. Owing to its comparatively lower profit margins, Bangladesh exports a larger volume of garments to the EU than China. However, China earns higher export revenues because of its lower production costs and greater value addition. This could gradually erode Bangladesh’s competitiveness in the EU market.
FY2026–27 will be a crucial year for Bangladesh to address the challenges facing its export sector. In the meantime, the government has introduced several measures, including working capital facilities for closed and partially operational industries. It has also announced interest rate concessions on pre-shipment credit, which may help reduce exporters’ financing costs. Furthermore, home textiles, jute, leather, ceramics, cement, and other non-traditional products can play a significant role in export diversification and help Bangladesh expand its export markets in the years ahead.
Kawsik Azad Pronoy
A Banker and Economic Analyst
kawsikdbbl@gmail.com