Exports have long been one of the strongest drivers of economic growth for developing nations, and Bangladesh is no exception.
A sustainable increase in exports not only strengthens foreign exchange reserves but also accelerates industrialization, employment generation, and poverty reduction. In many ways, the growth trajectory of an economy is closely tied to the strength of its export sector.
When exports grow faster than imports, economic development becomes significantly more achievable.
Among all export-oriented industries in Bangladesh, the readymade garment (RMG) industry stands out as the single most important contributor to the national economy.
The industry has transformed Bangladesh into one of the world’s leading apparel exporters while creating millions of jobs and empowering women across the country.
Today, the RMG industry contributes approximately 11% to Bangladesh’s Gross Domestic Product (GDP).
According to Mapped in Bangladesh, there are around 3,320 garment factories operating in the country, while BGMEA estimates the number at nearly 4,500 units.
Collectively, this sector represents the largest industrial base in Bangladesh and accounts for nearly 36% of total manufacturing employment.
The industry currently employs approximately 2.97 million workers, of whom nearly 57% are women. This has made the sector not only an economic engine but also a powerful catalyst for women’s empowerment and social transformation.
The impact of the RMG industry extends far beyond garment manufacturing itself. Over the years, Bangladesh has developed a strong backward-linkage ecosystem that has significantly increased domestic value addition, now standing at approximately 63%.
At present, the textile value chain includes nearly 2,000 manufacturing units, including:
- 500 spinning mills
- More than 1,000 fabric manufacturing units
- More than 400 large scale dyeing, printing, and finishing units
In addition, thousands of small and medium enterprises (MSMEs) support the sector by supplying accessories such as buttons, zippers, threads, hangers, packaging cartons, and other inputs.
The logistics and port sectors also heavily depend on apparel trade, with nearly 40% of port fees generated from RMG-related import and export activities.
The economic influence of the sector is equally visible in domestic consumption patterns.
The income generated by nearly 3 million garment workers has created substantial demand for affordable consumer goods including clothing, cosmetics, footwear, household utensils, and other essential products.
As a result, the RMG sector indirectly supports multiple industries across the economy.
The sector’s contribution becomes even more evident when analyzing Bangladesh’s external trade balance.
During FY25:
- Total imports stood at approximately $68.35 billion
- Total exports reached $48.30 billion
- Worker remittances contributed an additional $30.33 billion
Of the total export earnings, the apparel and related textile sectors contributed $40.512 billion, accounting for nearly 83.86% of the country’s total exports. Within this:
- RMG exports contributed $39.346 billion
- Specialized textile and home textile exports added $1.166 billion
These figures clearly demonstrate the critical role of the RMG and textile sectors in maintaining Bangladesh’s balance of payments, generating employment, and reducing poverty.
However, despite its tremendous success, the sector also faces several structural challenges.
First, the industry contributes to environmental pollution, particularly in textile dyeing and finishing operations.
Second, Bangladesh remains heavily dependent on a single export basket dominated by garments.
Third, export earnings per worker remain relatively low, averaging around $13,000 per employee annually.
Unfortunately, Bangladesh has yet to develop a strong alternative export industry capable of matching the scale and impact of the apparel sector.
Recent export trends also indicate growing concerns. During the first nine months of FY26, Bangladesh experienced a noticeable decline in overall exports, including RMG shipments.
- Knitwear exports declined from $16.14 billion to $15.25 billion, reflecting a 5.54% decrease.
- Woven garment exports fell from $14.09 billion to $13.62 billion, marking a 3.30% decline.
Despite this slowdown in exports, worker remittances continued to show positive growth, increasing from $21.78 billion to $26.20 billion during the same period.
This trend highlights an important reality: while remittances continue to support the economy, Bangladesh cannot afford prolonged weakness in its export sector.
Sustainable economic growth requires diversification, technological upgrading, productivity improvement, and stronger competitiveness in global markets.
The RMG sector remains the lifeline of Bangladesh’s economy, but future growth cannot depend solely on low-cost labor and traditional export markets.
The industry must now focus on innovation, sustainability, diversification, and productivity enhancement.
With proper policy support, technological advancement, skilled manpower, and infrastructure development, Bangladesh can strengthen its position as a global apparel manufacturing leader and ensure long-term economic resilience.
Khairul Basher is executive vice president & chief credit officer at LankaBangla Finance PLC
