Bangladesh’s apparel exports declined by 1.64 percent in the just-concluded fiscal year 2025-26, underscoring mounting pressure on the country’s largest export-earning sector despite a strong recovery in the final month of the year.
According to the Export Promotion Bureau (EPB), RMG export earnings stood at $38.70 billion in FY26, down from $39.35 billion in FY25.
The decline came even as garment exports rose 21.52 percent year-on-year in June, indicating that the late surge was insufficient to offset weak performance during most of the fiscal year.
Overall national exports also slipped slightly, with total export earnings falling 0.58 percent to $48 billion in FY26.
EPB data show that exports of woven garments declined 0.61 percent to $18.08 billion from $18.19 billion a year earlier. Knitwear exports registered a steeper fall, dropping 2.53 percent to $20.62 billion from $21.16 billion.
The monthly export trend reflected significant volatility. RMG exports began the fiscal year strongly, rising 24.67 percent in July to $3.96 billion. Exports also posted robust growth of 31.21 percent in April and 21.52 percent in June.
However, exports contracted in most of the remaining months between August and March. The sharpest decline was recorded in March, when exports fell 19.35 per cent, followed by a 14.23 per cent drop in December and a 13.21 per cent decline in February.
Industry leaders and economists attributed the overall decline to a combination of global economic weakness and domestic competitiveness challenges.
“Bangladesh had been affected more severely than many competing countries because it failed to adopt aggressive marketing strategies and respond quickly to changing market conditions,” said Fazlul Hoque, former Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president.
He said China had managed to retain buyers and expand market share by lowering prices, improving services and ensuring faster deliveries, particularly after redirecting its focus to the European market following higher US tariffs.
Bangladesh, by contrast, was unable to match those competitive measures, he added.
Fazlul Hoque stressed the need for product diversification, especially by expanding production of man-made fibre-based apparel, alongside improving productivity and manufacturing efficiency to remain competitive in global markets.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan said uncertainty surrounding US tariff policies, intensifying competition in the European Union market and weaker consumer demand in key destinations weighed on export performance throughout the year.
He noted that June’s strong growth was partly influenced by a weaker comparison base because exports during the corresponding month last year had been affected by Eid-ul-Azha holidays.
Exporters also pointed to geopolitical tensions, supply chain disruptions, rising energy costs and cautious purchasing behaviour among international buyers, many of whom shifted towards smaller and shorter-term orders.
Economists said the country’s heavy dependence on garments meant that even a modest decline in the sector had a significant impact on overall exports and foreign exchange earnings.
They added that diversification into new products and new markets had become increasingly important.
Economist Dr Zahid Hussain said, “June’s rebound was encouraging but insufficient to reverse the broader weakness seen throughout the year.”
He warned that without improvements in productivity and competitiveness, Bangladesh could face greater difficulty in retaining market share amid intensifying global competition.
Lower export earnings could also put pressure on foreign exchange reserves, exchange rate stability and investment, he added.
The EPB, however, maintained that Bangladesh had demonstrated resilience by keeping export earnings broadly stable despite geopolitical uncertainty, persistent inflation, volatile energy markets, supply chain disruptions and subdued consumer demand in major export destinations.
Business leaders expressed cautious optimism for the new fiscal year, saying easing geopolitical tensions, lower energy prices and stronger global demand could help revive export growth.
They also emphasised the need to reduce production costs, improve port and logistics efficiency, accelerate technology adoption and expand into new export markets to strengthen the sector’s long-term competitiveness.