Be vigilant before losing market share
Bangladesh’s ready-made garment industry is a key pillar of the national economy.
A significant portion of export earnings is derived from this sector, and the livelihoods of a vast number of people depend on it.
The industry plays a vital role in earning foreign currency, driving industrialisation, and providing employment, mostly for women. A decline in exports from this sector impacts the entire economy.
The United States is the largest export market for Bangladeshi ready-made garments. In the first six months of this year, Bangladesh’s garment exports to this market declined by 5.75 percent.
Exports stood at approximately $4 billion, compared to $4.25 billion during the same period last year. However, this decline is not a problem unique to Bangladesh; the total volume of US garment imports has also decreased.
Nevertheless, this situation serves as a warning for Bangladesh, as several competing nations have performed well during the same period.
Vietnam’s exports rose by 1.8 percent, and Indonesia also achieved growth. Cambodia saw its exports increase by 12.32 percent. Vietnam has further strengthened its position in the US market. Cambodia, too, is advancing rapidly.
This trend warrants serious consideration by Bangladesh. Exports from major suppliers like China and India have also declined; China’s exports fell by approximately 38 percent, while India’s dropped by more than 25 percent. In comparison, Bangladesh’s decline has been less severe. Therefore, there is no cause for panic at this moment, yet there is no room for complacency either.
Production cost is a major challenge for Bangladesh’s garment industry, a problem further exacerbated by the energy crisis. Uncertainties in electricity and gas supplies disrupt factory production, making it difficult to deliver goods on time and driving up costs.
In the international market, buyers now prioritise timeliness and quality alongside price; consequently, any shortcomings in these areas would cause Bangladesh to lag behind in competitiveness.
Diversifying export markets is also crucial. Bangladesh’s garment exports still rely heavily on a few major markets; new markets must be explored alongside Europe and the United States. It is necessary to expand market access in Japan, Australia, the Middle East, and Latin America.
The progress made by Vietnam, Indonesia, and Cambodia offers important lessons for us. Thus, new markets also need to be developed.
If this industry weakens, export earnings will decline, placing pressure on employment and impacting foreign currency reserves. Therefore, a coordinated initiative is needed immediately.
The government, industry owners, and workers must work together. Production costs must be reduced, efficiency increased, and product quality improved. Bangladesh’s garment industry needs to begin that groundwork right now.
