New prospects have arisen for Bangladesh as a result of the new US tariff policy. Foreign buyers are increasingly distancing themselves from New Delhi, Islamabad, and Beijing, and are now looking towards the red-green flag. Furthermore, buyers from various regions around the globe are arriving in Dhaka with orders, leading to a rise in purchase orders by approximately 32 percent over the last two months compared to the same timeframe last year.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the Bangladesh Export Promotion Bureau (EPB), and other prominent organizations involved in direct garment exports have indicated that new opportunities have surfaced in the country’s ready-made garment industry. Since the beginning of August, there has been a notable surge in interest from global buyers to place new export orders in Bangladesh. Should this trend persist, the volume of ready-made garment purchase orders could potentially double by September.
Industry insiders report that purchase orders have risen by about 32 percent in the last two months compared to the same period last year. Additionally, there has been a 25 percent increase in total export earnings during the first month of the current fiscal year. According to EPB statistics, export earnings from the garment sector alone in July reached $3.96 billion, accounting for roughly 83 percent of the nation’s total exports.
EPB Vice Chairman Anwar Hossain stated that if export orders align with buyer requirements and shipments are executed punctually, total export growth could reach 30 to 35 percent or more by the conclusion of the first quarter (July-September) of the current fiscal year. If this trend continues, it may be feasible to surpass the export target within eight months.
He also mentioned that not only are ready-made garments in demand, but buyers of products that were previously exported to the United States from China and India are now turning to Bangladesh. If entrepreneurs can fulfill their commitments, these buyers may permanently relocate to Bangladesh. However, it is crucial to swiftly address the power and fuel crisis and enhance the port’s capacity.
BKMEA President Mohammad Hatem stated that for the past six to seven months, numerous buyers have been shifting their import orders to India instead of China. This shift was anticipated as they had foreseen that Chinese exporters would encounter difficulties in the US and European markets. Nevertheless, the unexpected imposition of additional US tariffs on India has altered this trend. With a labor crisis emerging in Chinese garment factories, Bangladesh stands to fully capitalize on this opportunity.
He conveyed a sense of hope that if all export orders are fulfilled according to the current demand, the growth of the export sector could exceed 40 to 45 percent in the current fiscal year. Nevertheless, the industry continues to encounter challenges regarding investment and production flows, particularly due to complications within the banking sector. He pointed out that banks are presently concentrating on recovery and are keen to collect outstanding loans. However, the persistent issues of irregularities and misappropriation cannot be resolved swiftly. Simply raising loan interest rates or limiting loan access will not make expanding business viable. The existing circumstances do not permit immediate solutions. He stressed that just as revenue cannot be increased by violating acceptable policies, it is also impractical to obtain loans through the intimidation of entrepreneurs.
Former BGMEA director Mohiuddin Rubel mentioned to me that typically, there is a decline in exports during July, August, and September; however, this year the scenario is different. Export earnings are on the rise, and new purchase orders are being received simultaneously. Previously, only large buyers would place orders, but in the past month, smaller buyers have also begun to place orders for the US and European markets. This has resulted in considerable success in exports last month.
He noted that following the implementation of countervailing duties in the US market, Bangladesh is receiving a favorable response from buyer institutions there. Given that Bangladesh holds a more advantageous position compared to competing nations like China and India, the demand for our products has surged.
He advised caution when accepting additional purchase orders. Under no circumstances should products be sold at a discount. Once products are sold at a lower price, buyers will be reluctant to pay the correct price. While this may boost export income, many institutions could cease production shortly after and fall into debt. The government should establish a task force to address this situation.
