For years, the approach of Eid-ul-Fitr in Bangladesh’s ready-made garment sector was marked by uncertainty—delayed wages, bonus disputes, labor unrest and, at times, factory closures or protests. Economic pressure, falling export orders and a liquidity crunch in the banking sector often left many factories unable to clear workers’ dues on time.
This year, however, the picture has changed significantly. Ahead of Eid, the garment sector is witnessing a sense of relief, with most workers receiving their wages and bonuses on time. Industry stakeholders credit the shift to targeted policy support from Bangladesh Bank, along with cash incentives from the BNP-led new government and coordinated efforts by factory owners.
Near-universal payments restore worker confidence
Data from industry sources and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) indicate an unprecedented rate of wage and bonus disbursement this Eid. February wages have been paid in 99.91% of factories, while 99.81% of factories have cleared Eid bonuses. The remaining factories are in the process of completing payments.
In addition, about 64% of factories have paid part of March wages in advance, despite no legal obligation to do so. This has boosted cash flow among workers, easing their shopping and travel preparations ahead of the festival.
Rubel Mia, a sewing operator in Gazipur, said the situation has improved compared to previous years. “Earlier, there was always tension about whether we would get wages and bonuses on time. This time, we received both on schedule, and even some March wages in advance. Now we can prepare for Eid and travel home with ease,” he said.
However, workers like Ruby Khatun in Narayanganj noted that rising living costs continue to create pressure. “Wages and bonuses on time are good, but expenses have increased significantly—rent, groceries, and travel. Transport during Eid is still difficult and expensive,” she said.
Central bank loan program proves crucial
A key factor behind the improved situation is Bangladesh Bank’s special loan facility, designed to ensure timely wage payments in export-oriented industries. The program provides loans on easy terms, with eligibility extended to factories with at least 80% export-oriented production.
Loan amounts are calculated based on the average wages and allowances of the past three months. The facility carries no additional fees or charges, and although market-based interest rates apply, repayment terms are flexible, allowing instalments over up to one year.
Crucially, funds are disbursed directly into workers’ bank accounts or mobile financial services, enhancing transparency and reducing the role of intermediaries.
Cash support and coordinated measures ease liquidity pressure
Government cash support of about Tk 2,500 crore, combined with the central bank’s lending facility, has significantly improved liquidity in the sector. This has helped factories manage payments despite global economic slowdown, declining orders and rising production costs.
BGMEA President Mahmud Hasan Khan said timely policy measures have enabled notable progress in wage disbursement. “Easy-term loans and cash support have helped entrepreneurs overcome liquidity challenges,” he said.
He added that many factory owners also mobilized alternative funds from their own resources to ensure timely payments. In some cases, coordination among factory owners, banks and labor groups helped resolve financial constraints.
Phased factory closures fail to ease travel pressure
To reduce travel congestion, authorities implemented a phased factory closure plan ahead of Eid. A growing number of factories have gradually shut down: 15% closed on Monday, 35% on Tuesday, and 45% on Wednesday.
However, the phased approach has not fully eased transport pressure. Daily waves of workers travelling home have kept demand for buses, trains and launches high, spreading congestion over several days rather than reducing it.
Analysts say the plan is sound in theory but lacks coordination in execution. Without improved transport capacity, fare regulation and better travel management, the expected benefits remain limited.
Sector still faces structural challenges
Despite the improved wage situation, the garment sector continues to face structural pressures. In the first eight months of the 2025–26 fiscal year, export earnings fell by 3.73%, while back-to-back letters of credit declined by 6.79%. The average unit price of garments dropped by 1.76%.
Rising energy costs have further strained the industry. Gas prices have increased multiple times in recent years, while electricity costs have also risen, though supply remains inconsistent.
High interest rates, banking sector liquidity constraints and working capital shortages continue to weigh on manufacturers. Global economic slowdown, geopolitical tensions and increased competition in international markets are also affecting export performance.
Policy support restores confidence, but reforms needed
Analysts say this year’s experience demonstrates that timely and targeted policy intervention can prevent labour unrest. Bangladesh Bank’s direct involvement, rapid loan disbursement and coordinated cash support have helped restore confidence in the sector.
However, they stress that these measures are short-term solutions. Long-term sustainability, they say, will require stable energy supply, banking sector reforms, rationalized interest rates, export diversification, technological upgrades, improved labor welfare and a stronger wage structure.
A rare comfortable Eid for workers
For the first time in years, garment workers are heading into Eid with relative financial security. Timely payments have eased household pressures and brought stability to the sector.
Stakeholders hope that continued policy support and coordinated efforts will reduce pre-Eid labor unrest in the future and help strengthen Bangladesh’s key export industry.