The readymade garment exporters of the country said that they should focus on increasing competitiveness, building capability and removing non-tariff barriers, rather than overthinking the United States’ tariffs on India, China and other rivals.
They also stated that tariff hikes on India and unresolved trade tensions with China might divert some orders to Bangladesh, but this would be a short-lived issue.
Initially, the US imposed a 37 per cent reciprocal tariff on Bangladesh on April 2, which was then lowered to 35 per cent on July 8 and finally reduced to 20 per cent on July 31 following a series of negotiations.
Meanwhile, the US recently extended its trade truce with China by another 90 days, leaving key tariff disputes unsettled.
Moreover, India is bearing the brunt of steep US tariffs, now totalling 50 per cent, aimed at penalising the country for its continued imports of Russian oil.
This shift has created some opportunities for Bangladesh’s RMG industry, as buyers might reconsider their sourcing strategies.
‘However, we export roughly 20 per cent of our total products to the US and India is still behind us in that market. I don’t think an order shift from India would be as rejoicing as people think,’ said Mohiuddin Rubel, additional managing director of Denim Expert Limited.
He also said that they have already received the orders shifting from China for the past several months.
According to the OTEXA data, Bangladesh exported RMG items to the US worth $7.34 billion, while China and India exported $16.5 billion and $4.6 billion, respectively.
Sparrow Group manufactures more than 50 per cent of its $300 million worth of annual export goods for almost 14 major iconic US brands, including Gap, Levi’s, American Eagle, Talbots, Loft, and Kohl’s.
Shovon Islam, managing director of the Sparrow Group, told ¶¶Òõ¾«Æ· that he didn’t see any reason to become happy with higher tariffs on rivals.
‘Rather, we should increase our efficiency and competitiveness,’ he added.
Shifting some orders from India and China might provide short-term relief, but Bangladesh needs to consider design studios, innovation, research and development, and presentation.
He also said that India produces several high-end products and they are rich in design and presentation, but Bangladesh doesn’t have those capabilities and is still stuck on manufacturing basic items only.
‘If we could develop our R&D, design, and capabilities, we may attract more orders from the US, even if the tariffs on our rival were imposed at zero,’ he added.
Bangladesh typically exports basic items; 18 products account for about 80 per cent of Bangladesh’s RMG exports, according to data from the Bangladesh Garment Manufacturers and Exporters Association.
Asian Apparel Limited, a leading apparel exporter based in Chattogram, with nearly $340 million in annual exports, 95 per cent of which are directed to the US.
Khondaker Belayet Hossain, executive director of the company, said that they don’t think the orders from India and China will shift to Bangladesh overnight.
‘They would evaluate the feasibility and capacity of the factories and then they might put in purchase orders,’ he added.
Inamul Haq Khan, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said that they have orders lined up until December.
‘Recently, representatives of two US buyers visited our company for preliminary talks, but we couldn’t take their orders due to lack of available space,’ he added.
Khan, also managing director of Ananta Garments Limited, stated that buyers from China have been searching for factories for several months and have also rented closed factories.
‘Buyers have limited options as Vietnam and Cambodia face capacity constraints, making it tough for them to expand production,’ he added.
However, Professor Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, told ¶¶Òõ¾«Æ· that some orders might shift to Bangladesh.
‘But we should focus on productivity, diversity, cost of doing business, efficiency and capacity building,’ he added.
The question of who would grab the orders, Bangladesh or its competitors, highly relies on the facts mentioned above, he added.
Echoing the same sentiment, Shovon Islam stated that Bangladesh should focus on building competitiveness, increasing efficiency, and removing non-tariff barriers.
‘We have issues in customs and ports, as there are instances of delays for 15-20 days just for a mistake in the HS code,’ he added.
He also stated that inefficiency, harassment and corruption are the primary barriers to obtaining orders, which should be addressed first.
He also urged the government to introduce clearance systems within 24 hours for fabrics.
Belayet Hossain stated that customs and port officials lack the necessary mindset to support the country’s RMG sector.
‘Even they shut down the services just for their own interests. Efficiency is a must to become competitive,’ he added.
Inamul Haq Khan also urged the government to ensure that policies are supported.
The exporters also said that the US is important, but not the sole market for them, and for this reason, they should focus on sustaining competitiveness in EU markets.
Bangladesh exported apparel items worth $38.48 billion in the 2024 calendar year and $39.24 billion in FY2024-25.
Bangladesh set a target of exporting RMG items worth $44 billion in FY2025-26.
