Bangladesh’s garment sector is no stranger to global competition, but 2025 has brought a dramatic new twist. Despite a wave of trade restrictions from neighboring India and a fresh round of US tariffs targeting Asian exporters, Bangladesh’s ready-made garment (RMG) industry is not only holding steady—it’s thriving, according to recent reports from Prothom Alo and trade analysts. The country is seizing new opportunities in the American market and outmaneuvering regional hurdles, all while facing significant challenges at home.
Let’s start with the numbers. In July 2025, Bangladesh’s export earnings from India climbed to USD 149.4 million, marking a 4 percent increase over the previous year. This is despite India imposing three rounds of restrictions on Bangladeshi exports through land ports between May and August, according to the National Board of Revenue (NBR). The restrictions targeted a range of goods, including garments, jute products, food items, cotton waste, plastic products, and wooden furniture. Jute and garment products, in particular, can now only be shipped through India’s Jawaharlal Nehru Port (Nhava Sheva) in Mumbai, a significant change from the previous land-port routes.
How did Bangladesh pull this off? The answer lies in the resilience and adaptability of its garment exporters. While some sectors—like jute and food products—have taken a hard hit, the RMG sector has not only weathered the storm but expanded its reach. In July 2025, Bangladesh exported garments worth USD 62.8 million to India, a 19 percent jump from the previous year. Major international brands such as H&M, M&S, Puma, Uniqlo, Decathlon, Pepe Jeans, Mango Fashion, and Bestseller continue to source heavily from Bangladesh, undeterred by the logistical rerouting now required.
Md Abul Kashem, Deputy Managing Director of AKH Group, explained to Prothom Alo, “Our garment factories have greater capacity. Moreover, the cost of transporting garments by sea is borne by Indian buyers. The restrictions at land ports will not affect garment exports.” This sentiment is echoed by other industry leaders, who cite Bangladesh’s competitive pricing and production capacity as key advantages.
But it’s not all smooth sailing. Jute, once a staple of Bangladesh’s export basket to India, has suffered a sharp decline. Exports of jute goods plummeted by 74 percent—from USD 12.9 million in July 2024 to just USD 3.4 million a year later. Many companies, including Hasan Jute and Spinning Mills Limited, have struggled to adapt to the new seaport-only rules, with some consignments delayed for weeks at sea. Food exports have also dropped by 17 percent, and companies like BSP Food Products Limited have seen their workforce shrink dramatically as key Indian markets became inaccessible.
The rerouting of goods has put considerable pressure on Bangladesh’s Chattogram Port. With 89 percent of restricted goods now passing through Chattogram, the port is experiencing significant congestion, according to NBR data. In response to shifting trade flows, the government has decided to shut down several land ports—Chilahati, Daulatganj, Tegamukh, and Balla—after an inter-ministerial meeting on July 28, 2025. These decisions reflect the evolving reality of regional trade, where flexibility and infrastructure are becoming as crucial as diplomatic ties.
While the Indian market remains important—accounting for 3.65 percent of Bangladesh’s total export earnings—bigger opportunities are emerging farther afield. The United States, in particular, has become a focal point for Bangladesh’s garment industry, thanks in part to recent shifts in global trade policy.
On August 7, 2025, the US administration imposed new high tariffs on Chinese and Indian goods, making Bangladesh an increasingly attractive sourcing destination for American buyers. The results were immediate: in the first half of 2025, Bangladesh became the top exporter of T-shirts to the US, with sales totaling USD 373.2 million. This leapfrogged Bangladesh past traditional leaders like Nicaragua and China—a historic achievement, as noted by the United States International Trade Commission (USITC).
Industry experts attribute this success to a combination of factors. On July 31, 2025, President Donald Trump set a 20 percent counter tariff on Bangladeshi products—lower than the 30 percent on Chinese goods and 25 percent on Indian goods. As Chinese garment exports to the US fell by USD 1.1 billion from January to June 2025, Bangladesh’s rose by USD 850 million. The country’s share of the US garment market climbed to 10 percent, up from 9.26 percent the previous year, according to trade data.
“For the upcoming spring season, we have 5–10% additional orders, and for summer, 10–15%,” said Shovon Islam, managing director of Sparrow Group of Industries. “To retain orders shifting from India and China, we have already taken permission for extra overtime.” SM Khaled, managing director of Snowtex Group, added, “One US buyer who produced jackets on 7 lines last year now wants to expand to 17 lines. Another buyer wants to increase production from 20 lines by an additional 10–15 lines. To accommodate the extra orders, we will need to invest around $250,000. If conditions remain favorable, exports will exceed $35 million.”
Chinese investors are also taking notice. Since August 2024, 34 Chinese companies have submitted proposals to invest in Bangladesh’s export processing zones, with confirmed investments of around $150 million. New factories are springing up, not just in traditional hubs but in regions like Rajshahi, where the reopening of Barendra Rajshahi Textile Limited has already created 2,000 jobs. PRAN-RFL Group, a major player in food and beverages, is leading efforts to establish industries in remote areas, aiming to create 10,000 new jobs and reduce the need for workers to migrate to Dhaka.
Yet, for all its recent gains, Bangladesh’s garment sector faces daunting challenges. Electricity and gas shortages, especially in gas-dependent industries, threaten to slow growth. In the past year alone, 353 factories have closed—leaving nearly 120,000 workers without jobs. Declining orders, complications with letters of credit, high interest rates, and rising production costs are squeezing margins. New gas connections are stalled, and over 1,100 applications to Titas Gas remain unfulfilled, disrupting production and deterring expansion.
Mahmud Hasan Khan, President of BGMEA, warns that without urgent action to address these bottlenecks, the sector’s impressive momentum could falter. Experts and industry leaders are calling for coordinated government support—improved infrastructure, reliable energy supplies, streamlined banking, and customs processes, and targeted incentives to attract foreign investment. Only with these measures, they argue, can Bangladesh hope to reach the ambitious goal of USD 100 billion in garment exports by 2028.
The story of Bangladesh’s garment industry in 2025 is one of resilience, adaptation, and cautious optimism. As global trade winds shift and new barriers arise, the country is proving that agility and determination can turn challenges into opportunities. But the road ahead is far from certain. For Bangladesh to secure its place as a leading global exporter, it must not only capture new markets but also invest in the foundations that will sustain growth for years to come.
