Our Expectations from the Budget for the Garment Industry

The ready-made garment (RMG) sector is the lifeblood of Bangladesh’s economy and the source of livelihood for 4 million workers—our brothers and sisters. As the largest private sector employer in the country, the industry is currently facing a severe crisis amid a host of local and international challenges. These include recent countervailing tariffs imposed by the United States, the cancellation of Indian transshipment facilities, high bank interest rates, increased wages, and frequent hikes in gas and electricity prices—all of which are crushing the industry.

Furthermore, in 2026, Bangladesh is set to graduate from the Least Developed Country (LDC) category to become a developing country. As this graduation takes effect, the RMG sector—which accounts for 84% of the country’s exports—will face the greatest challenges. This is because the trade benefits currently enjoyed will be withdrawn, directly impacting the sector’s global competitiveness. According to a report by the Asian Development Bank (ADB), after Bangladesh’s LDC graduation, exports may decline by 5.5% to 14%. The primary reason for this drop would be the loss of duty-free market access (such as GSP privileges).

It is therefore evident that in the coming days, product exports—especially garments—will face formidable challenges.

In this context, the upcoming national budget is extremely important for the RMG industry. We hope the budget will contain clear and targeted measures to address the sector’s current issues and to preserve its competitive edge in the post-graduation era.

Author: Former Director, Bangladesh Garment Manufacturers and Exporters Association (BGMEA); Deputy Managing Director, Denim Expert Limited.