Business Report :
Garment Exports Add 59 per cent Value Amid Global Uncertainties, Signaling Steady Potential for Bangladesh’s RMG Sector Bangladesh’s ready-made garment (RMG) sector continues to play a pivotal role in the country’s economic framework, accounting for more than 80 per cent of total export earnings. The latest quarterly data published by Bangladesh Bank sheds light on recent trends in export performance and value addition, offering critical insights into the sector’s ongoing evolution and its future prospects.
Data of the Bangladesh Bank’s latest report showed Bangladesh exported RMG products worth $10.34 billion in the third quarter (January-March) of the current 2024-25 fiscal year. To support this export volume, the country imported raw materials-namely cotton, yarn, fabric, and accessories-valued at $4.25 billion. This places the net value addition at 58.90 per cent for the quarter. In the preceding quarter (October-December), value addition was slightly higher, at 61 per cent, indicating a decline of 2.10 percentage points.
This dip, while marginal, is reflective of broader challenges such as fluctuating raw material costs, exchange rate volatility, and the ongoing effects of global trade disruptions.
Yet, the value addition figure remains largely consistent with the longer-term trend of hovering around 60 per cent, as has been the case since the fourth quarter of the 2021-22 fiscal year.
Corrected Data Reveals More Realistic Value Addition
An important development in this context has been the statistical revision made by Bangladesh Bank in mid-2023. The central bank pointed out that the Export Promotion Bureau (EPB) had previously published inflated figures for garment export earnings, inadvertently overstating value addition.
Due to these discrepancies, earlier reports showed artificially high value addition rates of over 70 per cent in several quarters between FY 2022-23 and FY 2023-24. Once the export figures were adjusted, more accurate data revealed that value addition during the January-June period of FY 2022-23 was in fact closer to 62 per cent, not 70 per cent. For the four quarters of FY 2023-24, the actual value addition ranged between 57.5 per cent and 61.5 per cent, a far more realistic reflection of the industry’s margins.
This correction brings much-needed clarity to policy discussions, allowing stakeholders to better assess the real contributions and challenges of the RMG sector.
While these figures show a slight downward trend, the consistent 58-61 per cent value addition underscores the sector’s resilience amid various domestic and international challenges.
Untapped Potential of the RMG Sector
Despite temporary dips in value addition, Bangladesh’s RMG sector holds immense potential for long-term growth. Several structural advantages and emerging opportunities indicate that the sector could elevate its performance significantly in the coming years.
While the RMG sector has recently witnessed a slight dip in value addition, the fundamental strength of Bangladesh’s apparel industry remains solid. Through strategic investments in local raw material production, product diversification, sustainability, and digital transformation, the sector is well-positioned to scale up its value addition significantly and sustain its role as the lifeline of Bangladesh’s economy.
