PROSPECTS OF APPAREL EXPORT GROWTH FOR BANGLADESH: REACHING $100 BN BY 2030

1. Current Status of Bangladesh's Apparel Industry

Bangladesh is the world’s second-largest exporter of ready-made garments (RMG) after China, with its apparel industry being highly competitive due to its low labor costs, large manufacturing capacity, and specialization in high-volume, low-cost garment production. In fiscal year 2022-2023, Bangladesh's garment exports reached approximately $46 billion, a notable increase from previous years despite global economic headwinds, including the COVID-19 pandemic.

To achieve the $100 billion export target by 2030, Bangladesh would need to sustain an annual growth rate of 10-12%, which would require a concerted effort across several dimensions.

2. Key Growth Drivers

a. Shifting Global Supply Chains

With rising labor costs and economic uncertainties in China, many global brands are diversifying their supply chains. Bangladesh stands to benefit from this shift, particularly as brands seek alternative sourcing destinations that can provide competitive pricing and large-scale production. This trend, known as the "China Plus One" strategy, positions Bangladesh as an attractive option for global buyers seeking to reduce dependency on China while maintaining price competitiveness.

b. Sustainability and Compliance

In recent years, Bangladesh’s apparel sector has made significant progress in improving safety and sustainability. After the tragic Rana Plaza collapse in 2013, the country underwent significant reforms, with thousands of factories improving fire, safety, and structural compliance. Bangladesh is also home to a growing number of LEED-certified green factories, which are increasingly preferred by international buyers focusing on sustainability and environmental responsibility.

These improvements in factory conditions and sustainability credentials have boosted Bangladesh's image as a responsible sourcing destination, attracting more brands that prioritize ethical and eco-friendly production practices. As global demand for sustainable fashion grows, Bangladesh’s green factories give it a competitive edge in securing new business from environmentally-conscious brands.

c. Diversification of Product Offerings

Historically, Bangladesh's apparel exports have been concentrated in basic, low-cost garments such as T-shirts, trousers, and sweaters. To reach the $100 billion target, the country will need to diversify its product portfolio and move up the value chain. This involves producing higher-value-added garments such as formalwear, outerwear, activewear, and technical textiles. Expanding into these segments will enable Bangladesh to tap into new markets and cater to a wider range of consumer needs.

Investing in design, innovation, and product development capabilities will be crucial for Bangladesh to diversify its offerings and shift towards more complex and high-margin products. This will also help the country reduce its reliance on price-based competition and capture a larger share of the global apparel market.

d. Expanding Market Access

Bangladesh already enjoys favorable trade terms, such as duty-free access to the European Union under the Everything But Arms (EBA) agreement and Generalized Scheme of Preferences (GSP) benefits in several other markets. To sustain growth, Bangladesh must continue to explore new markets and strengthen trade relations with emerging economies.

Additionally, securing free trade agreements (FTAs) with key markets, such as the United States and the United Kingdom, would further enhance Bangladesh’s competitiveness. The country should also focus on diversifying its export destinations, targeting markets in Asia, Latin America, and Africa, to reduce reliance on traditional buyers in Europe and North America.

e. Digitalization and Technological Upgradation

To remain competitive in the fast-evolving global apparel industry, Bangladesh must embrace digitalization and technological advancements in manufacturing. The adoption of Industry 4.0 technologies such as automation, AI, and data analytics can enhance productivity, reduce lead times, and improve quality control. Upgrading production facilities with modern equipment and training workers in the use of these technologies will be critical for Bangladesh to maintain its edge in the global market.

Digitization can also help improve supply chain transparency, which is becoming increasingly important for brands looking to ensure ethical sourcing and compliance with global standards. Bangladesh's ability to meet these demands through technological investments will help secure long-term partnerships with international buyers.

f. Workforce Development

Bangladesh has a large and young labor force, which is one of its key advantages. However, to achieve the $100 billion target, it is essential to invest in workforce development, including skill enhancement, technical training, and managerial expertise. Moving up the value chain and producing higher-value products will require a more skilled workforce capable of handling advanced manufacturing processes and technologies.

By enhancing the skills of its labor force, Bangladesh can increase productivity, improve product quality, and meet the growing demand for more complex garments.

3. Challenges to Overcome

a. Infrastructure and Logistics

Bangladesh's infrastructure, including roads, ports, and power supply, needs significant improvement to support the projected growth in apparel exports. Congestion at ports, delays in customs clearance, and inadequate transportation networks can hinder the timely delivery of goods to international buyers. Investments in modernizing infrastructure and improving logistics efficiency will be essential for Bangladesh to meet global demand and achieve its export goals.

b. Economic and Political Stability

Achieving the $100 billion target will require a stable economic and political environment. Currency volatility, inflation, and disruptions in the supply of essential inputs such as raw materials and energy could impact the industry’s ability to scale up. Additionally, maintaining stable governance and business-friendly policies is vital to ensuring investor confidence and attracting foreign direct investment (FDI).

c. Competition from Other Apparel Producers

Bangladesh faces increasing competition from other low-cost apparel producers such as Vietnam, India, and Cambodia. These countries are also investing in upgrading their garment industries, improving labor conditions, and securing new trade agreements. To stay ahead of the competition, Bangladesh must focus on continuous innovation, sustainability, and quality improvement.

d. Graduation from Least Developed Country (LDC) Status

Bangladesh is set to graduate from its LDC status by 2026, which may lead to the loss of preferential trade access to key markets such as the European Union. This could increase tariffs on Bangladesh’s exports, making its products less competitive compared to those from other developing countries. To mitigate this risk, Bangladesh needs to negotiate new trade agreements and work on improving the overall competitiveness of its industry.

4. The Road Ahead: Strategic Vision

To achieve the ambitious goal of $100 billion in apparel exports by 2030, Bangladesh must adopt a multi-faceted approach. This includes diversifying product offerings, expanding market access, investing in sustainability and digitalization, and enhancing workforce skills. Equally important is improving infrastructure and ensuring a stable, business-friendly environment to attract investment and foster growth.

If Bangladesh can successfully navigate these challenges and capitalize on its strengths, it has the potential to not only reach the $100 billion mark but also solidify its position as a global leader in the apparel industry. The roadmap to this target will require collaboration between the government, industry stakeholders, and international partners to ensure sustainable growth and competitiveness in the years to come.