What's Happening?
Bangladesh's garment and accessories industry is positioning itself as a significant player in the global export market, with projections to reach $5 billion in direct exports within the next three years.
This growth is contingent upon the removal of existing policy barriers. The Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) reported that the sector contributed $7.45 billion to national exports in the 2024-25 fiscal year, with direct exports accounting for $1.6 billion. The industry has evolved from being heavily reliant on imported accessories to achieving nearly full supply capacity for local export-oriented industries. Investments totaling approximately Tk40,000 crore have facilitated this transformation, employing over 700,000 people across 2,000 units. The sector is also undergoing a digital transformation to meet international compliance standards, with over 100 factories investing in technologies like Radio Frequency Identification (RFID) for inventory management.
Why It's Important?
The expansion of Bangladesh's garment accessories industry is significant for several reasons. It highlights the country's potential to capture a larger share of the global fashion accessories market, which is expected to grow substantially in the coming years. As manufacturing hubs shift away from China, Bangladesh is becoming an attractive destination for foreign investors, particularly from China itself. This shift could lead to increased economic growth and job creation in Bangladesh. However, the industry faces challenges such as discriminatory export incentives and high import taxes on raw materials, which could hinder its competitiveness. Addressing these policy issues is crucial for the industry to fully capitalize on global demand and sustain its growth trajectory.
What's Next?
The future of Bangladesh's garment accessories industry will depend on its ability to overcome policy challenges and attract further investment. Industry leaders are optimistic that investment will accelerate once political stability is restored following the formation of a new government. Additionally, the adoption of advanced technologies and compliance with international standards will be critical for maintaining competitiveness in the global market. The sector's growth could also influence policy changes, as stakeholders push for more favorable export incentives and reduced import taxes. Continued collaboration between the government and industry players will be essential to address these challenges and support the industry's expansion.
