Bangladesh’s RMG sector is facing mounting challenges in its top export market, the European Union, due to rising competition from China and other Asian rivals. Although RMG exports to the EU rose 17.8% to €8.97 billion during January–May 2025, exports dropped 10.5% in May, the first decline of the year.
The drop comes amid new U.S. tariff threats (up to 35% on Bangladeshi goods), prompting exporters—including from China, Vietnam, India, and Pakistan—to shift focus to the EU, intensifying price competition. China’s apparel exports to the EU rose 17.1%, and inspections by EU buyers in China increased, signaling renewed interest. Meanwhile, key competitors like Cambodia (+30.3%), India (+19.1%), and Pakistan (+20%) also gained EU market share.
Industry insiders warn that price pressures, higher costs of doing business in Bangladesh (energy, wages), and factory closures are straining exporters. Many are now taking orders below production cost just to survive. Analysts say if U.S. tariffs are implemented in August, more Bangladeshi exporters will pivot to the EU, increasing competition and price pressure in that region further.
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