RMG export face challenges

International boycotts of companies accused of unethical labour practices and political turmoil have severely disrupted Bangladesh's supply chain. The country's ready-made garment (RMG) sector, a cornerstone of the economy, is experiencing a decline as international retailers, including H&M and Zara, have either cancelled or reduced their orders. Consequently, factories have reported temporary halts in production, with cumulative losses exceeding $4.0 billion in 2024 alone. For instance, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported approximately $800 million in losses within just five days of a prolonged worker strike. Additionally, many major companies have shifted their sourcing to Vietnam and Cambodia, eroding Bangladesh's market share.

The repercussions of these boycotts extend beyond large factories, affecting logistics and supply chains for smaller businesses. Many factories have resorted to costly air freight instead of sea transport, exacerbating congestion. The garment supply chain - comprising colour printing factories, transportation companies, and packaging facilities - has been and continues to be strained by order cancellations and inflationary pressures. Social unrest over wages has further disrupted operations. For example, protests in Dhaka have interrupted production plans, and workers in Gazipur have blocked major roads for several hours, delaying the transportation of goods and raw materials to factories. These incidents highlight the fragility of the infrastructure logistics.

To address these challenges, some producers are exploring supply chain digitisation and diversifying their product offerings. For example, firms such as Beximco are investing in value-added garment production to attract new clients. Simultaneously, the authorities are working to rebuild international trust by reforming labour policies and adhering to global regulations.

However, analysts caution that unless transport infrastructure, labour conditions, and the overreliance on the RMG sector are addressed, Bangladesh risks losing its competitive edge to emerging apparel-producing hubs like Indonesia and Ethiopia.

Taiyeba Tarannum

North South University

[email protected]