Trade deals, energy security vital to shield RMG from global shocks

FE REPORT
Bangladesh should prioritise signing trade agreements to cushion the impact of global crises, as geopolitical tensions and structural weaknesses risk deepening financial pressure, disrupting supply chains and reducing future export orders from key markets, experts said.
The country's ready-made garment (RMG) sector is already struggling to sustain long-term competitiveness amid shifting trade rules, rising costs and global uncertainties, they added.
The remarks came at a seminar titled "Geopolitical Conflicts and Global Supply Chain Disruptions: Implications for the RMG Industry", held at the closing ceremony of the Bangladesh International Textile, Knitting and Garment Industry Exhibition (BTKG) 2026 on Saturday, according to a statement.
Speaking at the seminar, EuroCham Bangladesh Chairperson Nuria Lopez urged immediate negotiations on a free trade agreement (FTA) with the European Union.
She warned that Bangladesh's graduation from least developed country status without a durable alternative to preferential market access would be a major setback.
"An FTA with the EU would provide a permanent and predictable framework, unlike complex and uncertain schemes such as GSP+, and should be treated as a national priority," she said.
Highlighting a key contradiction, Lopez said buyers continue to demand lower prices despite rising wages, energy costs and compliance expenses, urging stronger and more data-driven negotiations.
She also pointed to gaps in renewable energy policy, emphasising the need for affordable energy storage and supportive fiscal measures.
Riad Mahmud, managing director of National Polymer Industries Ltd, said the sector is facing interconnected macroeconomic and structural challenges.
Heavy reliance on imported raw materials and global disruptions are causing production gaps, halting operations and affecting a large labour-intensive workforce, he said.
Mahmud cautioned against continued reliance on blanket government support, suggesting targeted mechanisms such as dedicated funds linked to specific disruptions.
He stressed that long-term resilience depends on improved infrastructure and addressing undercapitalisation in the manufacturing sector.
Bangladesh Employers' Federation Director Akhter Hossain Apurbo said the ongoing disruptions represent a structural shift rather than a temporary challenge, requiring adjustments in sourcing, inventory and energy management.
"To remain competitive, manufacturers must maintain higher levels of raw material stock to ensure uninterrupted production and timely delivery," he said.
He noted that borrowing costs have surged from around 9.0 per cent to as high as 14-15 per cent in a short period, with effective rates reaching 16-17 per cent due to additional charges.
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