Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Quality Inspection Management (QIMA), a leading supply chain compliance solutions provider, has disclosed a troubling rise in labour rights violations in Bangladesh's ready-made garment factories.
Critical issues related to working hours and wages nearly doubled in 2024 than in 2023, reads a QIMA report styled 'Q1 2025 Barometer: Global Supply Chains Prepare for Uncertainty as New Trade Wars Loom' published on Friday.
It found critical violations related to working hours and wages in one-third of Bangladeshi factories inspected in 2024-significantly higher than both the previous year and the region's 2024 average of 26 per cent.
Despite a challenging year marked by protests, factory closures and extreme weather, Bangladesh saw double-digit growth in 2024, underscoring its continued significance as a key supplier hub for Western brands.
South Asian sourcing hubs remained vital to the procurement strategies of US-based and European buyers, according to the report.
Despite mounting disruptions, global supply chains showed resilience in 2024, sustained by stable demand in Western markets that helped trade recover from the 2023 downturn, though the sourcing landscape now faces new uncertainties with the potential rise of tariffs and protectionism in 2025.
The QIMA sheds light on the fact that the anticipated US tariffs and ongoing disruptions have forced businesses to diversify their sourcing strategies.
QIMA data also showed that China remained a key sourcing partner in 2024, with a 29-per cent year-on-year increase in inspection and audit demand across all major consumer goods categories.
Demand from EU-based buyers rose by 22 per cent, while American businesses increased by 17 per cent, indicating that despite ongoing supply chain shifts, Western brands still view China as a reliable fallback for manufacturing capacity, according to the report.
Some Western brands and retailers have been stockpiling made-in-China goods to build inventory buffers and minimise disruptions in case of sourcing re-routing, while others are taking a wait-and-see approach, acknowledging that replacing China as a sourcing hub will not happen quickly.
"The next stage of the US-China trade war, which is highly likely given the current geopolitical climate, is expected to be a major factor in how global supply chains approach China sourcing in 2025," cited the report.
Vietnam continued to be a major beneficiary of the ongoing sourcing shifts from China, with QIMA data showing a 30-per cent YoY rise in demand for inspections and audits in 2024, including a 26-per cent rise from US- and EU-based buyers.
With expected higher US tariffs on Chinese goods, Vietnam could gain an even greater advantage in 2025, according to the report.
It also indicated that Bangladesh could benefit from the shift away from China, as the US might see Vietnam as a 'middleman' for Chinese businesses, which could put Vietnam at risk of tariffs.
On the other hand, QIMA data showed a 25-per cent YoY increase in demand for inspections and audits in India, including 25-per cent growth among Western buyers.
Meanwhile, Pakistan and Sri Lanka also saw a rise in manufacturing orders in 2024 as their economies continued to stabilise after recent economic crises.