Bangladesh’s ready-made garment sector may face a significant setback in 2025, with exports potentially falling by $2 billion, warned Bloomberg Economics in a recent forecast. The projected decline is attributed to several emerging challenges, including rising tariffs in the United States, potential export restrictions from India, and ongoing energy shortages within Bangladesh.
In 2024, Bangladesh’s RMG sector earned $38.48 billion, accounting for over 80% of the country’s total export income, according to the Bangladesh Garment Manufacturers and Exporters Association. These earnings play a vital role in maintaining the nation’s foreign exchange reserves.
Bloomberg Economics cautioned that the situation could deteriorate further if competitors like India secure more favorable trade agreements with the US, potentially diverting market share away from Bangladesh. Additionally, concerns are mounting over the risk of foreign retailers cancelling orders due to shipment delays caused by fuel shortages or disruptions in transshipment routes.
A major blow came on April 8, when India revoked transshipment privileges for Bangladeshi goods passing through its land routes to Indian ports, leading to higher shipping costs. Further compounding the pressure, India imposed restrictions on imports of garments, processed foods, furniture, and other goods from Bangladesh via land ports starting May 17.
Bloomberg noted that India imports roughly $700 million worth of apparel from Bangladesh. If restrictions persist, Indian importers could fully replace Bangladeshi products with domestic alternatives by 2027.
The report also highlighted looming challenges from Bangladesh’s upcoming graduation from least developed country (LDC) status in November 2026. This shift will eliminate duty-free benefits and potentially increase tariffs on Bangladeshi goods, weakening the sector’s global competitiveness further amidst rising logistics costs and longer transit times.
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