Europe remains the largest destination for Bangladesh’s ready-made garments. Under the Generalized System of Preferences (GSP) scheme, Bangladesh benefits from duty-free access throughout Europe.

However, indirect and direct wars in Europe have led to persistent inflation in recent years, increasing living costs and reducing consumer spending. Despite these challenges, Bangladeshi garment exports to Europe have maintained a positive trajectory.

Positive Winds for Garment Exports in Europe

From January to October 2024, Bangladeshi garments worth $16.52 billion were exported to Europe, reflecting a modest growth of 1.43% compared to $16.28 billion in the same period last year. In contrast, China, the largest garment exporter to Europe, recorded a 1.14% growth, while Turkey, the third-largest exporter, experienced a 5.56% contraction in exports.

China: $21.82 billion (up from $21.58 billion in 2023)

Bangladesh: $16.52 billion (up from $16.28 billion in 2023)

Turkey: $8.59 billion (down from $9.10 billion in 2023)

Post-Pandemic Recovery and War-Induced Challenges

Bangladeshi garment exports surged after the pandemic, but the Russia-Ukraine war disrupted this trend. High inflation in Europe caused living costs to rise, leading to reduced spending on clothing. However, inflation is stabilizing, and the market is showing signs of recovery. Despite this, domestic challenges such as high fuel prices and political instability have tested Bangladesh's resilience.

Missed Opportunities in European Markets

Industry leaders believe Bangladesh could have achieved greater success in Europe, given its garment industry's strengths and duty-free advantages. Mohiuddin Rubel, a former director of BGMEA, noted that Bangladesh's growth in Europe is modest compared to the typical 10-12% growth rate.

“Despite duty-free access, we’re not performing as expected. Europe should naturally remain our top market, but other countries are taking larger shares,” Rubel remarked.

Low-Priced Orders: A Competitive Necessity

Bangladesh is accepting lower-priced orders to stay competitive and fully utilize its production capacity. Rubel explained, “Global demand has dropped, and competition has increased. Our capacity remains unchanged, but buyers are importing less. In a free market, they aim to buy at the lowest price, and we’ve had to comply.”