Bangladesh Garment Manufacturers and Exporters Association has reported that nearly 400 garment factories have shut down over the past three years, warning that many more remain financially vulnerable amid mounting economic pressures.
Speaking at a pre-budget discussion at the National Board of Revenue headquarters in Dhaka, BGMEA President Mahmud Hasan Khan said the ready-made garment (RMG) sector is facing “unprecedented challenges” both domestically and globally.
He noted that export performance has been declining since August 2025 due to global economic slowdown, geopolitical instability, and tariff pressures. In February of FY26 alone, garment exports dropped by 3.73% compared to the same period a year earlier. As factories struggle to operate at full capacity, fixed and operational costs have increased significantly.
BGMEA has placed several proposals ahead of the FY27 budget, including withdrawal of a 10% tax on cash incentives, reduction of source tax on export earnings, and duty benefits on raw materials, particularly for solar energy systems and environmental compliance equipment.
Industry leaders also highlighted rising financial and operational costs, with lending interest rates reaching 12% – 15%, alongside sharp increases in gas and electricity prices. Wage hikes, higher port tariffs, and a reduction in export incentives have further intensified pressure on manufacturers.
At the same meeting, Bangladesh Knitwear Manufacturers and Exporters Association echoed similar concerns, citing declining orders, reduced export earnings, and increasing production costs. The association warned that prolonged challenges could further weaken the sector’s competitiveness.
Meanwhile, the Bangladesh Textile Mills Association raised concerns over the cumulative tax burden across the textile value chain, urging reforms to ease pressure on producers and improve efficiency.
Responding to the concerns, NBR Chairman Abdur Rahman Khan highlighted ongoing efforts to simplify tax processes through digitalization, including fully online corporate tax return systems.
Industry stakeholders have called for urgent policy support in the upcoming budget to stabilize the sector, revive exports, and protect Bangladesh’s position in the global apparel market.
