Dhaka: Over 400 garment factories in Bangladesh have ceased operations in the last three years due to a mix of domestic and international challenges, Commerce Minister Khandakar Abdul Muktadir informed Parliament on Thursday. From July 2023 to June 2026, 282 factories associated with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and 120 with the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) closed down, he reported.
According to United News of Bangladesh, these closures have been attributed to several significant factors. The challenges include the COVID-19 pandemic, the Russia-Ukraine war, conflicts in the Middle East, and the US-Iran conflict. Additionally, the global economic slowdown, political instability in Bangladesh, liquidity shortages due to money laundering, and international trade agreements among India, Vietnam, and the European Union have further aggravated the situation. The reluctance of foreign buyers to engage with small and medium-sized factories for easier direct monitoring has also contributed to the shutdowns.
Muktadir assured Parliament that the government is actively working to maintain Bangladesh's position in the global apparel market. However, he cautioned that the country's graduation from the least developed country (LDC) status could lead to losing preferential market access, affecting exports valued at $17.5 billion. Bangladesh has already signed an Economic Partnership Agreement (EPA) with Japan and is negotiating a Comprehensive Economic Partnership Agreement (CEPA) with South Korea. Efforts are underway to establish similar agreements with the European Union, Regional Comprehensive Economic Partnership (RCEP) member countries, the United Arab Emirates, Singapore, Indonesia, China, and other potential markets.
Responding to inquiries from various MPs, Muktadir outlined the future export earnings target for the apparel sector, set at $44.505 billion for the fiscal year 2026-27. He mentioned that the sector earned $3.88672 billion in July this year. Addressing the trade deficit with India, the minister noted a significant increase in bilateral trade, now amounting to nearly $13 billion, with Bangladesh exporting goods worth $1.89 billion to India. The focus, according to Muktadir, should be on enhancing overall export capabilities rather than addressing trade deficits with individual countries.
Muktadir highlighted potential sectors for boosting exports, including leather, jute, shipbuilding, light engineering, and semiconductors. Policy support and investment attraction efforts are in place to strengthen these sectors. He also noted opportunities to increase exports to the Indian market, despite existing trade barriers from both sides. Recently, an Indian business delegation proposed forming a joint task force to improve infrastructure, a proposal the Bangladeshi government is considering.
The minister explained that the majority of imports from India are conducted by the private sector seeking competitive prices. He provided historical trade deficit figures with India and discussed Bangladesh's dependency on imports for edible oil, estimating an annual demand of 2.2 to 2.5 million tonnes. Muktadir also addressed the export of betel leaves and the prohibition of importing certain three-wheeler vehicles, emphasizing ongoing support for the local electric three-wheeler industry.