RMG export earnings slip 1.64pc in FY26

Bangladesh's ready-made garment (RMG) sector, the country's biggest foreign exchange earner, posted a modest decline in export earnings in the just-concluded fiscal year 2025-26, as weak global demand, persistent price pressure and domestic disruptions weighed on shipments across key markets.

According to the latest Export Promotion Bureau (EPB) data, apparel exports stood at US$38.70 billion during July 2025-June 2026, down 1.64 per cent from the previous fiscal year, former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Mohiuddin Rubel confirmed.

EPB EXPORT DATA EXHIBITS 
1.    Total apparel exports stand at US$38.70b during July 2025-June 2026
2.    Garment exports to EU fall 3.31 per cent year-on-year to US$19.06b
3.    Exports to the US increase by 2.63pc to US$7.74b
4.    Exports to Japan, Australia, Russia, Turkey and Gulf countries decline by 4.25pc

The sector exported an average US$3.23 billion worth of garments each month, though earnings swung sharply throughout the year. Monthly exports peaked at US$3.96 billion in July 2025 before plunging to US$2.78 billion in March 2026, reflecting erratic global order flows rather than a sustained downturn.

The European Union (EU), Bangladesh's largest apparel export destination, recorded the steepest decline among major markets. Garment exports to the bloc fell 3.31 per cent year-on-year to US$19.06 billion, reducing the EU's share of Bangladesh's total apparel exports from 50.10 per cent in the previous fiscal year to 49.25 per cent in FY2025-26.

The decline comes at a crucial time as Bangladesh prepares for its graduation from the least developed  
country (LDC) category, raising concerns about maintaining competitiveness in its largest market.

However, the fall in EU shipments was partially offset by positive growth in other traditional markets.
Exports to the United States increased 2.63per cent to US$7.74 billion, with its share in total garment exports rising from 19.18per cent to 20.01per cent.

Shipments to the United Kingdom rose 0.91per cent to US$4.39 billion, while exports to Canada grew 3.20per cent to US$1.34 billion. Together, these three markets now account for more than 35per cent of Bangladesh's total RMG exports.

The performance of non-traditional markets also remained weak. Exports to destinations including Japan, Australia, Russia, Turkey and Gulf countries declined 4.25per cent to US$6.16 billion, reducing their share in total exports from 16.36per cent to 15.93per cent.

Product-wise, knitwear performed worse than woven garments. Knitwear exports fell 2.53 per cent to US$20.62 billion, while woven garment exports slipped only 0.61per cent to US$18.07 billion.

Industry leaders said the decline was driven by weaker global consumer demand, high inflation in major importing countries, persistent price pressure from international buyers and domestic political and industrial disruptions during parts of the fiscal year.

Former BGMEA Director Mohiuddin Rubel said the sector faced an unusually volatile year, with export earnings fluctuating significantly from month to month. The decline is relatively small, but it reflects the challenges the industry faced throughout the year. Buyers remained cautious, while manufacturers struggled with rising production costs and lower prices, he said.

BGMEA leaders stressed that Bangladesh must accelerate market and product diversification to reduce excessive dependence on the EU. They also urged the government to ensure uninterrupted energy supply, improve port efficiency, reduce logistics costs and continue policy support for exporters ahead of LDC graduation.

BGMEA President Mahmud Hasan Khan (Babu) said Bangladesh must strengthen its competitiveness ahead of LDC graduation by ensuring uninterrupted energy supply, improving port efficiency, speeding up customs clearance and maintaining supportive government policies.

At the same time, greater investment in man-made fibre (MMF)-based apparel, technical textiles and other high-value products is essential to sustain long-term export growth, he added.

Economists also warned that the slowdown should serve as a wake-up call for policymakers.

They said Bangladesh can no longer rely solely on low-cost manufacturing and traditional export destinations. Instead, the country needs to move toward higher value-added products, invest in productivity, innovation and skills development, and negotiate favourable trade agreements to remain competitive after losing LDC trade preferences.

Dr Debapriya Bhattacharya, Distinguished Fellow at the Centre for Policy Dialogue (CPD), said the decline in garment exports should not be viewed in isolation.

It reflects a combination of weak global demand, rising domestic production costs and continued supply chain challenges. Bangladesh now needs to focus on market diversification, product upgrading and reducing the cost of doing business to sustain export growth, he said.