Bangladesh has retained its position as the world’s second-largest garment exporter, but the global apparel industry’s post-pandemic recovery is exposing a deeper weakness: while competitors move into higher-value products and capture new demand, Bangladesh remains trapped in the image of a low-cost manufacturing hub.
Although global apparel trade expanded by 4.46% to $574.46 billion in 2025-26, Bangladesh’s ready-made garment exports grew by just 0.89%, far behind Vietnam’s 10.53% and Cambodia’s 16.88%, according to industry data.
Manufacturers, economists and exporters say the sluggish performance reflects more than temporary challenges such as gas shortages, high borrowing costs or supply disruptions.
They argue the industry is confronting a structural problem that has become increasingly difficult to overcome: international buyers continue to associate Bangladesh with low-cost, high-volume production and remain reluctant to pay premium prices for complex, high-value garments.
As a result, factories that invest in technical apparel, functional clothing and sophisticated manufacturing often find themselves negotiating against the same low-price expectations attached to basic T-shirts and knitwear.
“International buyers still operate under the assumption that Bangladesh means cheap production,” said Mostafiz Uddin, founder and chief executive of Bangladesh Apparel Exchange.
“They push us for price cuts on complex items while willingly paying higher prices to other sourcing destinations for identical products. Competing solely on price is no longer a viable strategy.”
Industry leaders say the problem is compounded by destructive competition among local manufacturers, many of whom undercut one another to secure orders.
A senior BGMEA official said buyers sometimes offer as little as $5 for heavy winter jackets, prices that barely cover production costs.
“Factories accept orders with little or no profit just to keep production lines running,” the official said.
“That leaves almost nothing to invest in technology, product development or sustainability.”
Economists warn that Bangladesh is also losing competitiveness because it remains heavily dependent on imported synthetic fabrics, chemicals and specialised raw materials, lengthening production lead times at a time when global fashion brands increasingly prioritise speed over labour costs.
“The global apparel market has fundamentally changed,” said Fahmida Khatun, executive director of the Centre for Policy Dialogue.
“Cost is no longer the only deciding factor. Buyers increasingly demand faster delivery, digital traceability, carbon compliance and supply chain transparency. Bangladesh cannot compete effectively without strengthening its backward linkage industries.”
Khondaker Golam Moazzem, research director at CPD, said blaming weak export growth solely on external conditions ignores longstanding structural weaknesses.
“To shed the ‘cheap labour’ image, Bangladesh must invest aggressively in technical textiles, synthetic fibres, automation and innovation,” he said.
“Remaining dependent on basic cut-and-make production leaves the industry vulnerable to more integrated competitors.”
Analysts say escaping the low-cost trap will require a coordinated shift in industrial policy, including investment in synthetic fibre production, advanced textile manufacturing, automation and green technology, alongside efforts to build long-term partnerships with international brands rather than competing through relentless price cuts.
Without that transition, they warn, Bangladesh risks remaining the world’s second-largest garment exporter by volume while steadily losing ground in the industry’s fastest-growing and most profitable segments.
