Monday Sep 07, 2026
Monday Sep 07, 2026
Monday, 7 September 2026 06:11 - - {{hitsCtrl.values.hits}}
At least 402 ready-made garment (RMG) factories closed in Bangladesh between July 2023 and June 2026, Bangladeshi Commerce Minister Khandakar Abdul Muktadir told the country’s Parliament, citing overlapping global and domestic shocks that have battered the industry.
Of the closures, 282 factories were members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), while 120 belonged to the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the Minister said, citing a 22 June report by the BGMEA.
Muktadir attributed the closures to a combination of factors, including the COVID-19 pandemic, the Russia-Ukraine war, the conflict in the Middle East, the war between the US and Iran, a global recession, domestic political instability, and a banking sector liquidity crisis linked to money laundering. He also cited free trade agreements (FTAs) between India and Vietnam with Europe, as well as international buyers’ reluctance to place orders with small and medium-sized factories in order to simplify their own supply chain monitoring, as contributing pressures.
To support the sector, the Bangladesh Government has introduced a 1.5% cash assistance scheme in place of Customs Bonds and duty drawbacks for export-oriented textile manufacturers, with an additional 0.5% support for exporters selling into the Eurozone. Small and medium-sized enterprises (SMEs) across knitwear, woven garments, and sweaters have been given a further 3% benefit, alongside a separate 0.3% cash assistance for the RMG sector.
Muktadir said Bangladesh is set to graduate from least developed country (LDC) status to become a developing country, a transition that would strip it of preferential market access under various developed-country trading schemes, potentially affecting exports worth $ 17.5 billion. To offset that risk, Bangladesh has concluded an Economic Partnership Agreement (EPA) with Japan and is negotiating a Comprehensive Economic Partnership Agreement (CEPA) with South Korea, with further trade agreement talks underway with the European Union (EU), the Regional Comprehensive Economic Partnership (RCEP) bloc, the United Arab Emirates (UAE), Singapore, Indonesia, and China.
Bangladesh also introduced a 2% cash incentive for exports of new products and expansion into new markets outside the US, Europe and Canada, and has activated its diplomatic missions in Asia, Africa, and South America to explore fresh sourcing relationships.
The Export Promotion Bureau is separately organising a “Global Sourcing Expo” in fiscal year 2025-26, alongside single-product sourcing fairs, to diversify Bangladesh’s export product base.
