Bangladesh’s readymade garment industry is currently under major strain because of the energy crisis, high interest rates, and frequent policy shifts. In particular, gas and power shortages have cut garment factories’ production by 30 to 35 percent. To keep production going, factories have introduced extra working hours, which is raising business costs on one hand and creating compliance-related risks on the other.
According to Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for the 2025-27 term, the garment sector’s three biggest problems are the energy crisis, high interest rates, and frequent policy changes. Of these, resolving the energy problem quickly is the most urgent, since factories cannot produce according to demand without adequate gas and electricity.
He said that while a factory would normally operate nine to 10 hours a day, the energy crisis now forces them to run 12 to 13 hours to keep up. Factories are being forced to run extra hours simply to hold onto orders. This is not only raising production costs but also creating risks around compliance with labor working-hour rules.
Demand for garments has also softened somewhat in international markets. Global instability, including the Russia-Ukraine and US-Iran wars, along with rising energy prices and inflation, has reduced purchasing power in Europe and the United States. As a result, after covering food, energy, and other essential expenses, people there are spending comparatively less on clothing. This is affecting Bangladesh’s garment export orders.
Meanwhile, even as production costs rise, international buyers are reluctant to pay more for garments, since Bangladesh must remain price-competitive with rival countries such as India, Cambodia, Pakistan, and China. Buyers weigh the overall “landed cost,” including transport and import duties, alongside the production cost, when purchasing goods. As a result, Bangladeshi factories are having to absorb the extra costs themselves.
Given the situation, BGMEA has demanded lower interest rates or access to low-interest funds. Although Bangladesh Bank has taken some initiative on the matter, the government has said a lasting solution could take at least two years. There are also concerns that Bangladesh risks losing part of its international market share during this period.
Infrastructure is another major weakness for the garment industry. Problems also exist around product diversity, trade policy, and other areas, but infrastructure limitations are seen as the biggest obstacle. In particular, limitations at seaports mean Bangladesh’s garment exports face comparatively longer lead times.
Currently, shipping goods from Bangladesh often requires routing through Singapore, Colombo, or Malaysia. Exporters in India, Vietnam, and China, which have deep-sea port facilities, do not need to spend this extra time. Once the Matarbari deep-sea port becomes operational, it is hoped that lead times for Bangladesh’s export goods will fall, boosting the country’s competitiveness in international markets.
Those familiar with the sector say that without ensuring a stable energy supply, lowering loan interest rates, maintaining policy continuity, and removing infrastructure limitations, Bangladesh’s leading export sector could face even tougher competition. Without swift, effective action, the risk to both securing orders and retaining market share in the international market will grow.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report