Making footwear industry sustainable

Bangladesh's notable surge in footwear export to the United States during the January-July period of 2025 has drawn attention for good reasons. While this growth can largely be linked to the Trump administration's tariffs on major footwear-exporting nations -- resulting in trade diversion -- the development nevertheless highlights Bangladesh's huge potential to emerge as a major player in global footwear and leather goods market. Despite possessing several strong advantages, this potential has long remained underutilised. Cheap labour is often cited as Bangladesh's competitive edge, but the availability of abundant raw leather is equally significant. Each year during Eid-ul-Azha, the country secures a huge supply of hides, providing for the raw material base necessary to become a leading global supplier of leather products. Despite such advantages, Bangladesh has struggled to establish a global footprint in footwear exports.

The recent upturn, however, looks quite promising. According to data compiled by the US Department of Commerce's affiliate OTEXA, Bangladesh's footwear exports to the US grew by an impressive 74.21 per cent year-on-year in the first seven months of 2025. Export receipts during this period stood at US$209.61 million, compared to US$120.32 million in the same period of 2024. This robust growth followed two years of stagnation, when export earnings hovered between US$255 million in 2024 and US$235 million in 2023.

The wider global trade scenario provides useful context. China, the world's largest footwear exporter, saw its shipments to the US decline sharply -- earning US$4.15 billion but registering a negative growth of over 15 per cent. Meanwhile, Vietnam consolidated its top position, exporting US$5.61 billion worth of footwear with a growth rate above 15 per cent. Other countries such as Indonesia, Cambodia, and India also reported strong growth, reflecting a shift in sourcing preferences among US buyers. Industry observers point out that Bangladesh has the capacity to improve its position further if certain bottlenecks are addressed. Global buyers are increasingly seeking low-cost production hubs to offset high costs in China, especially under the burden of US tariffs. Bangladesh, with its affordable labour and raw material supply, is well-placed to capture a larger market share. Moreover, there is a scope to attract substantial foreign investment, particularly from Chinese firms looking to relocate their manufacturing base. To achieve this, Bangladesh must overcome domestic challenges. Key reforms are needed in areas such as ease of doing business, shortening of lead times, availability of affordable industrial land and improvement of backward linkages. Policy support in the form of fiscal incentives and investment in infrastructure -- particularly power, gas, and effluent treatment facilities -- are crucial to making the sector more competitive.

It is worth noting that even before tariff hikes on Chinese exports, soaring wages in China had prompted investors to consider shifting operations to lower-cost countries. Bangladesh was unable to seize that opportunity, due mainly to infrastructural shortcomings.  Unless these gaps are addressed, the current momentum may prove short-lived. The latest export surge should, therefore, inspire a decisive move to remove all the bottlenecks hampering the sector's growth. Rather than waiting for occasional spikes triggered by external developments, Bangladesh must take proactive steps to build a sustainable and competitive footwear industry.