"Bangladesh RMG sector in deep crisis as factory closures and job losses mount: BKMEA", 15 December 2025

Bangladesh’s readymade garment (RMG) industry is facing one of its most severe downturns in recent years, marked by falling exports, rising production costs, factory closures and mounting financial stress, according to Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Hatem described the situation as “extremely alarming”, warning that the challenges extend beyond the garment sector to the wider economy. He said weak policy support and inadequate backing from the banking system had accelerated the crisis, adding that long-standing concerns raised by the industry had yet to translate into practical solutions...

The sector has also been hit by the withdrawal of critical financial support in recent years...

According to BKMEA estimates, around 250 to 260 garment factories have shut down over the past 18 months, resulting in the loss of more than 220,000 jobs. Although some new factories have opened during the same period, creating an estimated 30,000 to 40,000 jobs, the net employment impact remains sharply negative. In Narayanganj, a major knitwear hub, factory closures have left thousands of workers without livelihoods...

Demand in the United States...has weakened amid persistent inflation and reduced consumer spending. Uncertainty over future tariff policies has also made buyers more cautious, leading to fewer orders. Hatem warned that any move to impose elements of a general tariff structure of around 20% on Bangladeshi goods would further erode the country’s competitiveness.

At the same time, exporters from China and India, facing challenges in the US market, have shifted their focus to Europe, intensifying competition and reducing Bangladesh’s share of orders. As a result, many factories are operating well below capacity, with some running 40 to 50% under normal levels and most operating 20% to 30% below capacity, a situation Hatem described as unsustainable.

Hatem also criticised the banking sector for failing to support manufacturers during the crisis, citing prolonged delays of 20 to 30 days in processing back-to-back letters of credit...