H&M has a big plan for sourcing from Bangladesh although the price will increase by up to 12% following the country’s graduation from the grouping of the least-developed countries in 2026, media reported citing a panel discussion of a senior official of the Swedish retail giant.
Ziaur Rahman, regional country manager for production at H&M for Bangladesh, Pakistan and Ethiopia, revealed it while speaking as a panelist at a panel titled “Bangladesh’s LDC graduation-Impediments and Way Forward” at the Made in Bangladesh Week at the International Convention City, Bashundhara in Dhaka on Wednesday.
He said that after becoming a developing nation, Bangladesh will lose its preferential market access and face 10%-12% duty on its exports.
However, it will enjoy the duty preference in the European Union up to 2029 as the trade bloc has extended a three-year grace period.
“We will be staying here,” he added saying that H&M is the single largest foreign clothing buyer in Bangladesh, sourcing more than $3.50 billion worth of apparel last year.
The Swedish clothing retailer sources 20% of its products from the country.
The country, which raked in $42.61 billion in garment exports in the last financial year that ended in June despite economic slowdown across the world, has a 6.8% market share in the global apparel supply chain.
Ziaur Rahman, however, noted that 18%-20% of products that his company sources from Bangladesh would be affected by the duty imposition after graduation.
He suggested Bangladesh improve product diversity as more than 75% of exported garment items are confined to the top five products although the country is the second-largest apparel supplier in the world.
“Improvement of efficiency and making more garments from the manmade fibre can help overcome the challenges of the duty imposition after the LDC graduation,” he said.
He also assured that if the wages of garment workers in Bangladesh go up, H&M would also increase the prices of products sourced from the country to help manufacturers compensate for additional expenses.