Bangladesh’s readymade garment (RMG) sector stands to gain significantly from the U.S. Administration’s new reciprocal trade policy—but poor infrastructure may prevent the country from fully capitalizing on this opportunity.
Industry insiders estimate that if Bangladesh captures just 10% of China’s $137 billion apparel export market, it could add $13 billion to its own export earnings.
“There’s strong interest from U.S. buyers, especially in women’s apparel,” said Shovon Islam, Managing Director of Sparrow Group of Industries.
“But challenges like port congestion, slow customs, and limited production capacity hinder our readiness for a large surge in demand,” he told Bangladesh Post.
Former BGMEA President Faruque Hassan emphasized that a stable law and order situation is essential to meet growing U.S. demand. “Government support to prevent factory disruptions and provide policy backing is crucial,” he noted.
In 2024, Bangladesh exported $7.34 billion worth of garments to the U.S., capturing a 9.26% market share and becoming the second-largest supplier after China.
Two major developments are fueling optimism: renewed talks for a Free Trade Agreement (FTA) with the U.S. and trade tensions between Washington and Beijing.
Formal FTA negotiations are underway, with Bangladesh expected to submit a draft proposal by May 27 through a committee led by Additional Secretary Aysha Akter.
Currently, U.S. tariffs on Bangladeshi garments range from 15% to 16%. A finalized FTA could eliminate these duties, boosting exports, attracting investment, and opening opportunities in other sectors like agriculture and technology.
Meanwhile, both U.S. buyers and Chinese manufacturers are increasingly viewing Bangladesh as a viable alternative production hub. Some
Chinese firms are considering relocating operations to the country amid the ongoing trade rift.
About 80% to 90% of large U.S. buyers have updated their purchase orders with Bangladeshi suppliers, often negotiating 5% to 20% discounts to sidestep the 10% tariffs still in place on Chinese goods. While this pressures Bangladeshi exporters’ margins, it also fosters long-term business ties.
Smaller U.S. buyers, making up around 40% of the market, remain hesitant, citing uncertainties around trade policies. However, the larger 60%—including major global brands—are committed to sourcing from Bangladesh to ensure supply chain stability.
As global trade dynamics evolve, Bangladesh has a rare window of opportunity. With timely infrastructure upgrades and policy reforms, the RMG sector could unlock substantial growth and job creation, according to industry leaders.
