BANGLADESH has emerged as one of the most promising economies in South Asia, often cited for its steady growth, robust remittance inflows and the export-driven success of its ready-made garment sector. However, this success has also created a structural dependence that increasingly appears to be a vulnerability. With over 84 per cent of the country鈥檚 total export earnings coming from garments, such concentration is neither sustainable nor prudent amid global uncertainties, technological disruptions and shifting consumer preferences. The time has come for Bangladesh to decisively pursue export diversification beyond the ready-made garment sector to ensure resilient and inclusive long-term growth.
The push for diversification is not merely about risk mitigation; it is about unlocking untapped potential. Sectors such as pharmaceuticals, agro-processing, light engineering, information technology, leather, jute, ceramics and shipbuilding hold considerable promise. While some of these sectors have demonstrated growth, they remain constrained 鈥� largely due to limited policy support, infrastructure bottlenecks, restricted market access and weak branding. For instance, Bangladesh鈥檚 pharmaceutical industry exports to over 150 countries, which is commendable, yet its global market share remains small. The leather industry, despite being prioritised, continues to face compliance challenges and outdated technology. Without deliberate and sustained nurturing, these sectors risk falling short of their global potential.
Agro-processing, in particular, stands out as a sector with significant untapped opportunity. Given the country鈥檚 fertile land and favourable climate, Bangladesh could emerge as a major exporter of processed foods, spices and organic products. Yet obstacles such as inconsistent quality control, lack of cold storage facilities and challenges in meeting international sanitary standards persist. Addressing these issues will require collaborative efforts among farmers, processors, exporters and the government.
The information technology and digital services sector is another area of immense potential. With a growing pool of young, tech-savvy talent and improvements in digital infrastructure, Bangladesh has the opportunity to position itself as a competitive outsourcing destination. However, its global share of ICT exports remains modest. Real progress will require investment in skill development, enhanced English proficiency, reliable internet access and strategic branding and partnerships. While initiatives such as Hi-Tech Parks and BASIS SoftExpo are encouraging, consistent policies and committed follow-through are essential to achieve significant impact.
Light engineering is also beginning to make meaningful contributions, particularly in auto parts, bicycles and machinery. With targeted support and incentives to meet global standards, this sector could become a solid export earner. Currently, however, it is hampered by fragmented production systems, outdated equipment and a lack of testing and certification facilities. Addressing these issues could open up export opportunities in regions such as Asia and Africa, where demand for cost-effective engineering solutions is growing.
Export market strategy must also evolve. Bangladesh continues to rely heavily on a few key regions, such as the European Union and North America 鈥� markets that are highly competitive and increasingly saturated. Expanding trade relations with emerging markets in Africa, Latin America and Southeast Asia is essential. Signing preferential trade agreements, strengthening trade diplomacy and participating in global expos can enhance visibility and access to these untapped markets.
Improving the ease of doing business is critical. Despite some progress, Bangladesh still ranks poorly on global indices measuring business readiness, logistics and regulatory transparency. Exporters 鈥� especially in non-RMG sectors 鈥� frequently cite high compliance costs, corruption at ports and delays in customs clearance as major obstacles. Streamlining procedures, digitizing trade documents and improving inter-agency coordination could significantly reduce the cost and time required to export non-traditional goods.
Access to finance remains another major barrier. Many potential exporters in emerging sectors struggle to obtain bank loans or export credits due to risk perceptions and insufficient collateral. There is a clear need for specialized financial instruments, credit guarantee schemes and public-private partnerships to bridge this gap. The central bank and financial institutions must design policies tailored to the needs of small and medium exporters 鈥� who often drive innovation and diversification.
Export diversification is not only an economic or technical issue; it is a strategic imperative. As Bangladesh prepares to graduate from the list of least developed countries by 2026, it must reckon with the gradual loss of trade preferences under schemes such as the EU鈥檚 Everything But Arms. Higher tariffs will make cost competitiveness more critical than ever. Without a diversified export base, the country risks losing market share and facing a difficult transition.
Climate change is another growing challenge, affecting both production and market access. Sustainability has become a core requirement for international buyers. By promoting green technologies, eco-friendly products and sustainable agricultural practices, Bangladesh can expand its export categories while aligning with evolving global trade standards.
Human capital development is equally crucial. Different sectors demand different skills and a workforce trained primarily for RMG production may not easily transition into ICT, pharmaceuticals, or agro-processing. Targeted investments in technical and vocational education tailored to sectoral needs are essential. Strengthening links between academia and industry, updating curricula and fostering entrepreneurship should be national priorities.
The government must take the lead by formulating a comprehensive export diversification roadmap with clear targets, timelines and monitoring mechanisms. Inter-ministerial coordination is vital, as is proactive engagement from the private sector, which must shift its focus from short-term profits to long-term competitiveness, innovation and market development.
Bangladesh has proven that it can build a globally competitive export sector from the ground up. The challenge now is to replicate that success across a broader range of industries. Export diversification is not just a strategy for resilience and employment 鈥� it is central to enhancing Bangladesh鈥檚 global stature as a dynamic, forward-looking and sustainable trade partner.
The opportunity is real, but not indefinite. The decisions made today will determine whether Bangladesh remains dependent on a single sector or evolves into a diversified economy capable of withstanding shocks, seizing emerging opportunities and improving the lives of all its people. Export diversification is no longer a choice 鈥� it is an urgent necessity.
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Md Mehedi Hasan is currently working with a United Nations Organization. He holds an CPA from the Cambridge Academy of Professionals.
