A strategic consultation meeting of garment trade associations was held with the UN-OHRLLS, the United Nations mission in Dhaka to independently assess Bangladesh’s readiness to graduate from the Least Developed Country (LDC) list, a press release said.
At the meeting, Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), highlighted the policy reforms and support needed to address the country’s macroeconomic stability and post-graduation risks on behalf of the garment industry. He emphasized the challenges facing the Bangladesh garment industry and a cooperative policy to maintain sustainable growth.
The meeting held at UN House in Gulshan on November 10 was also attended by BKMEA President Mohammad Hatem, Executive President Fazle Shamim Ehsan, Chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) and Director of Bangladesh Textile Mills Association (BTMA) Hossain Mehmood, Director of BGMEA Faisal Samad, Former Director Sharif Zahir and Former Director of BGME and Chairman of Standing Committee on FTA and PTA Lutfe M Ayub.
During the discussion, the BGMEA President strongly emphasized that at this juncture of LDC transition, the Bangladesh garment industry is simultaneously facing increasing operating costs and infrastructural constraints. In particular, the 286% increase in gas prices between 2016 and 2023 and significant price increases of 40% and 33.33% in the captive and industrial sectors respectively in April 2025 are severely hampering production capacity. Added to this is the financial pressure. The increase in non-performing loans over 27% and the increase in bank interest rates up to 15% are discouraging private investment.
Mahmud Hasan Khan said that exporters are also facing severe challenges in the logistics sector. Despite the unusual delays and inefficiencies in port operations, the 41% hike in Chittagong Port charges in October 2025 and the long time spent on road transport are negatively impacting the global competitiveness of the industry. Moreover, a 56% wage hike in 2023, an increase in annual increment from 5% to 9% in 2024 and a 60% cash incentive cut without any alternative support mechanism have made this export-oriented sector vulnerable – pushing the industry towards an economic fragility.
The BGMEA President identified the main weaknesses of the country’s economy, including the slowdown in GDP growth, inflation that has remained above 8% so far, low tax-GDP ratio (6.6%) and foreign exchange reserves of $27.5 billion (as per BPM6).
He also expressed deep concern over the current political climate, volatility in global trade, a trend of reduced orders among buyers in the wake of the upcoming national elections and lack of coordination in the implementation of the Smooth Transition Strategy (STS). He warned that the industry’s low diversification and dependence on raw material imports pose a major risk to economic stability in the long term.
At the meeting, garment exporters presented some specific short- and medium-term priority recommendations to the government and development partners to ensure a stable and smooth transition.
These include, in the short-term, introducing alternative incentives in line with WTO, reducing bank interest rates, and reducing economic pressure through the re-introduction of EDF. At the same time, ensuring uninterrupted energy supply and eliminating logistics inefficiencies (ports and customs) are also essential. In the short term, achieving EU GSP Plus and expeditiously initiating FTA/EPDA negotiations with major trading partners are essential to secure access to global markets.
In the medium-term, recommendations include establishing good governance in the banking sector, reducing non-performing loans, rapidly building deep seaports and economic zones, and strengthening the structural foundation of the industry through investment in skill development and technological modernization.
The leaders of the garment and textile sector emphasized the need for uninterrupted energy supply, supporting decarbonization investments, and supporting technology adaptation and circular economy programs to sustain the industry’s growth.
At the meeting, BGMEA President Mahmud Hasan Khan expressed specific expectations to international development partners, saying that it is essential to ensure a smooth transition period of at least three years in all developed and developing country markets after Bangladesh’s successful transition. At the same time, international organizations should take a leading role in providing low-interest or blended finance and necessary technical assistance for maintaining the global competitiveness of the industry and for an environmentally friendly transformation.
