What's Happening?
Bangladesh's garment and accessories industry is on a trajectory to significantly increase its direct exports, with projections to reach $5 billion within the next three years. This growth is contingent
upon the removal of existing policy barriers. The sector, which has seen its direct exports double over the past three years, contributed $7.45 billion to national exports in the 2024-25 fiscal year. The Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) highlights that while most of these exports are 'deemed exports' to the local ready-made garment sector, direct exports have reached $1.6 billion. The industry has evolved from being heavily reliant on imports to achieving nearly full supply capacity for local export-oriented industries, employing over 700,000 people across 2,000 units. The sector is also undergoing a digital transformation to meet international compliance standards, with innovations like 'Digital Product Passports' being developed locally.
Why It's Important?
The potential growth of Bangladesh's accessories industry is significant for the country's economy, especially as global manufacturing shifts away from China. This shift presents an opportunity for Bangladesh to capture a larger share of the global fashion accessories market, which is expected to grow substantially. However, the industry faces challenges such as high import taxes on raw materials and a lack of export incentives, which could hinder its competitiveness. Addressing these policy issues is crucial for the industry to fully capitalize on the growing global demand. The sector's expansion could lead to increased foreign investment, job creation, and economic diversification, benefiting various industries including pharmaceuticals, agriculture, and footwear.
What's Next?
For the industry to achieve its export goals, it will need to overcome significant policy challenges. Stakeholders are advocating for the removal of discriminatory export incentives and high import taxes that currently impede competitiveness. The sector's growth is also tied to political stability, as investment inflows have been affected by recent political uncertainties. As the industry continues to innovate and expand, it will be important for the government to provide targeted support to ensure that Bangladesh can fully leverage its position in the global market. The formation of a new government could bring about the necessary policy changes to support this growth.
