Bangladesh will not allow disruption of the global garment supply chain.
That is according to Muhammad Yunus, head of Bangladesh’s interim government, at a diplomatic meeting in Dhaka.
Bangladesh’s textile industry, the world’s second-largest clothing exporter after China, boasts 3,500 factories and over 4 million workers producing apparel for major global brands.
“Bangladesh’s key advantage is its highly skilled workforce in garment manufacturing, a development that began with Korean training programs 30-40 years ago,” Dr Prabir De, professor at Research and Information System for Developing Countries (RIS), told Sputnik India.
De noted that Bangladesh’s status as the world’s second-largest exporter is due to its skilled workforce and trade concessions, such as the Generalized System of Preferences Plus (GSP+) from developed countries.
The GSP+ allows Bangladesh to export garments to developed states duty-free, allowing it to produce garments in bulk, he pointed out.
De said global standards and training from international companies have empowered Bangladesh to meet diverse quality and design requirements, ensuring its success in this labor-intensive sector.
Small entrepreneurs in Bangladesh supply international brands like H&M with cotton and synthetic shirts, making Bangladesh a key source for these garments, he said.
Bangladesh's exports during the pandemic increased due to its capacity to supply uniforms for doctors, nurses, and health workers, showcasing its strong supply chain advantages, the pundit said.
Currently, both Dhaka airport and the port of Chattogram are overcrowded, with the seaport suffering from siltation, De explained.
Matarbari, a new port facility, is under construction near Cox's Bazar. The small Dhaka airport struggles to accommodate larger cargo aircraft, the expert said.
“Bangladesh’s outdated infrastructure and ongoing political issues could drive international buyers to move their business elsewhere if the crisis continues,” De warned.
He said the Bangladeshi government faces a dual challenge: first, restoring law and order, encouraging people to return to work, and secondly solving Bangladesh’s supply chain issues which have led to inventory pile-ups and unmet orders.
“This situation presents an opportunity for neighbouring countries like India and Sri Lanka, but global companies may face significant losses until they can transition away from Bangladesh”, De said.
The expert argued that global markets should allow Bangladesh’s new caretaker government some time to address law and order and make critical economic decisions amid ongoing unrest and poor economic conditions.
“The interim government must make effective decisions to enhance investor confidence, however, if without improvements to its domestic infrastructure for air and sea shipping, Bangladesh’s role as a global garment hub could be severely impacted in the medium to long term,” De said.
He pointed out that Bangladesh is set to transition from Least Developed Country to developing country status on January 1, 2026, which usually means losing trade concessions.
However, the US and European have promised to phase out concessions gradually, giving Bangladesh time until December 31 2030, to improve its infrastructure, he said.
“Despite retaining trade concessions for now, Bangladesh may find it difficult to attract new investments due to the current geopolitical situation, with its status as a global clothing exports trade supplier remaining uncertain,” De concluded.