BGMEA defends RMG growth amid US probe

Trade body says capacity expansion aligns with demand, rejects claims of overcapacity and forced labour

Monira Munni | Published: April 11, 2026 23:29:45

Bangladesh's garment industry has defended its growth model amid a US investigation, arguing that its expansion reflects global demand rather than excess capacity or market distortion.
Industry leaders say the sector remains too small globally to influence prices or disrupt trade.
The response comes as US authorities examine labour practices and trade policies across major exporting economies, placing Bangladesh's flagship sector under renewed international scrutiny.
Production capacity in Bangladesh's readymade garment (RMG) industry has expanded gradually over the years, in line with global demand and evolving buyer sourcing strategies, said the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
At the same time, it said, the global market share remains relatively modest compared to major suppliers, leaving it in no position to influence global prices or create systemic distortions through overcapacity.
The industry body made these observations in a position paper submitted last week to the relevant government authorities, in response to an investigation launched by the United States Trade Representative (USTR).
On March 12, the USTR initiated investigations into 60 economies under Section 301(b) of the Trade Act of 1974.
The probe will determine whether the acts, policies and practices of these economies, particularly regarding the failure to impose and effectively enforce bans on imports of goods produced with forced labour, are unreasonable or discriminatory and whether they burden or restrict US commerce.
The countries under investigation include Bangladesh, along with major US trading partners such as the United Kingdom, the United Arab Emirates, Pakistan, Sri Lanka, Saudi Arabia, Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
The BRICS economies - Brazil, Russia, India, China and South Africa - are also included.
Citing data from the Export Promotion Bureau, BGMEA President Mahmud Hasan Khan noted in the position paper that Bangladesh's garment exports reached US$39.3 billion in fiscal year 2024-25, up from US$25.5 billion in 2014-15.
Bangladesh's RMG exports have followed a steady and gradual growth trajectory, without any sudden or policy-driven surge that could be interpreted as excess production, the BGMEA said.
"The expansion of production capacity has remained closely aligned with global demand trends and evolving buyer sourcing strategies," the paper noted, adding that Bangladesh's global market share stands at around 6.5 to 7.0 per cent.
Export earnings from the sector reflect structural constraints in economic diversification and an overdependence on a single sector at the national level, it argued, adding that this concentration should be seen as a development pathway rather than evidence of excess capacity.
Bangladesh's exports are concentrated in labour-intensive, low- to mid-priced apparel products that are not typically produced in the United States. The US focuses more on advanced technology and heavy industries rather than basic garment items such as T-shirts and casual wear.
"…imports of such products do not adversely impact US domestic manufacturing; rather, they benefit US consumers by providing affordable clothing, particularly for low- and middle-income households," the paper stated.
Regarding government support, the BGMEA said policy incentives, including cash subsidies, are designed to offset structural disadvantages such as inadequate infrastructure, longer lead times and weak backward linkage industries.
The association argued that export growth is driven not by subsidies but by labour-intensive production, entrepreneurial initiative and integration into global value chains. It added that the government has reduced cash incentives by around 60 per cent over the past three years in preparation for LDC graduation.
Bangladesh's unit export price remains relatively stable at around US$3.08 per square metre, compared to US$1.57 for China in 2025, and is close to the US average import price of US$3.14 per unit.
The BGMEA also stated that there is no forced labour in the export-oriented garment sector, noting that the industry operates under a robust legal and institutional framework in compliance with national labour laws and international standards.
Commerce Secretary Mahbubur Rahman said the growth of the garment sector is driven by buyer demand, echoing the BGMEA's position.
On subsidies, he added that export incentives are compliant with World Trade Organization (WTO) rules.
The secretary said a stakeholder meeting will be held next week to discuss the matter ahead of the USTR hearing.
The USTR is scheduled to hold hearings on April 28, 2026, and has requested interested parties to submit written comments, along with a summary of testimony, by April 15, 2026.
Munni_fe@yahoo.com