Bangladesh’s Garment Sector Faces Major Crisis Due to India

In contrast, the tariff rate for Bangladesh remains unchanged at 20%. This 2% tariff disparity between South Asia’s two major exporters is posing a new threat to Bangladesh’s Readymade Garment (RMG) sector.

Industry insiders noted that even a 1–2% price difference in the international garment market plays a crucial role in securing orders. By leveraging tariff benefits alongside its own raw materials and rapid delivery capabilities, India is currently offering products at lower prices. Consequently, there is a growing risk that orders for basic T-shirts, knitwear, and casual wear from Bangladesh will shift to India. Bangladesh’s export growth has been consistently declining for the past three months, further intensifying this crisis.

Fazlee Shamim Ehsan, Executive President of BKMEA, stated that when a new countervailing duty is added to the current 15% customs duty, Bangladeshi exporters are required to pay a total of 35% in tariffs, compared to 33% for India. This increased cost pressure is causing entrepreneurs to lose their competitive edge globally. On the other hand, Mohiuddin Rubel, a former Director of BGMEA, pointed out that while India has signed trade agreements with nine major countries over the last five years, Bangladesh has only one effective agreement (with Bhutan).

Experts warn that the impact will be even more severe if GSP facilities in the European market are unavailable after 2026. To tackle this situation, they recommend shifting toward high-value garment production, improving logistics and port efficiency, and adopting targeted Free Trade Agreement (FTA) strategies. Simultaneously, there are fears of a significant negative impact on the national economy if the government does not urgently increase diplomatic efforts and policy support.