Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Apparel export to the United States-the single-largest destination of Bangladesh-grew a paltry 0.75 per cent to fetch $7.34 billion in 2024.
The earnings were $7.28 billion in 2023, according to the data released on Thursday by OTEXA, an affiliate of the US Department of Commerce.
In 2022, however, the country's ready-made garment (RMG) exports to the US hit an all-time high of $9.73 billion.
In terms of volume, apparel exports in 2024 increased by 4.89 per cent to 2.37-billion square metres, which were 2.26-billion square metres in 2023, according to OTEXA data.
Amid the slow growth rate, Bangladesh's apparel export share in the US market fell to 9.26 per cent in 2024, which was 9.7 per cent in 2022.
But suppliers like Cambodia, Pakistan, Vietnam and India recorded 14.4 per cent, 7.3 per cent, 5.6 per cent and 4.9 per cent growth respectively in 2024.
According to some exporters, while Vietnam is always doing better in the US, India will be the new concern and challenge for Bangladesh as India is shipping higher volume of apparel there offering lower price with its own raw materials.
According to OTEXA, India fetched $4.69 billion making shipments of 1.37 billion square metres of apparel in 2024. In quantity, India's shipment was 13.1 per cent higher compared to that of 2023.
Meanwhile, a US Fashion Industry Association (USFIA) 2024 benchmark study finds that American fashion companies are diversifying their apparel sourcing and exploring opportunities in emerging destinations, especially India, amid growing risks and market uncertainty in Bangladesh.
Citing shipping delays, supply-chain disruptions, and 'managing geopolitics and other political instability' related to sourcing as top five concerns among US brands and retailers in 2024, it said buyers consider India to be more competitive than most other Asian suppliers regarding vertical integration capability, manufacturing flexibility and agility.
Mahmud Hasan Khan Babu, former vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh saw an eventful 2024 with polls, wage hike and labour unrest along with the July uprising.
"Bangladesh is facing tough competition with India, which is offering goods at lower prices than Bangladesh," he told the FE.
India has its own raw materials from cotton to yarn, man-made fabric and others, while Bangladesh is largely dependent on imported cotton and fabrics, mostly woven items.
Besides, the lead time is almost same for both India and Bangladesh, said Mr Babu, terming India a 'concern' for Bangladesh.
Cost of production and doing business has been going up in Bangladesh significantly mainly because of gas and electricity price hike and other complexities, he noted.
"Business has been becoming more challenging day by day and we are losing competitiveness mainly because of the increasing cost of production due to internal factors."
When asked, former BGMEA president Faruque Hassan said they should be happy for sustaining growth, though meagre, despite multiple challenges like gas and electricity crisis, lost production and a massive political transformation.
He said Bangladesh could perform better provided with uninterrupted gas supply and no production loss due to labour unrest last year as there were work orders while industry has invested in environment-friendly processes, product diversification and value-added items.
Mr Hassan, managing director of Giant Group, said 2025 would be good as demands from western market is increasing with improved inflationary pressure and reduced interest rate.
"Besides, Bangladesh could be one of the beneficiaries of the ongoing China US trade war provided with improved internal factors like political stability and improved law and order situation."
Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association, said how much Bangladesh could grab the opportunity of shifting work orders from China due to a trade war between China and US, and seize the orders coming here depends on internal factors.
There is hardly any fresh investment and so no capacity enhancement, he said, adding many factories were closed due to many reasons like banking issues, labour unrest and inefficiency while many more are on the verse of closure.
Labour situation has improved but not fully controlled and there is no guarantee that there would be no such incident in coming months leading to uncertainty, according to Mr Hoque.
The industry is suffering due to poor gas supply and banking issues as factories are not getting support from banks, including those in trouble, as received during the pre-August period, he claimed.
Mr Hoque, however, expects more work orders in 2025.
Regarding price, he, shifts blame on poor negotiating skills of local exporters, saying they need improved skills to be able to say no to buyers who are offering price below production costs.
According to OTEXA data, Vietnam fetched $14.98 billion recording 5.6-per cent growth in 2024 over that of $14.18 billion earnings in 2023.
The US imports 4.16 billion square metres of garment from Vietnam in 2024, which was 9.52 per cent higher.
Meantime, China recorded meagre growth of 0.79 per cent to fetch $16.50 billion during the January-December period of the year.
China shipped 9.29-billion square metres of apparel to the US, marking 5.91-per cent growth during the period.
Overall US apparel imports stood at $79.25 billion, marking 1.71-per cent growth in 2024, according to OTEXA data.