Bangladesh exports continue to fall, December shipments down 14%
The apparel sector, which accounts for about 85% of Bangladesh’s total export receipts, also posted a sharp contraction, with shipments in December down by more than 14%.
Bangladesh's export earnings have declined for five consecutive months, weighed down by subdued demand in the United States and intensifying competition in the traditional European market as China and India move to expand their market share.
According to fresh data released today (4 January) by the Export Promotion Bureau (EPB), exports in December fell 14.25% year-on-year to $3.89 billion, down from $4.63 billion in the same month last year. November exports had already dropped by 5.54%.
Overall export earnings during the July-December period declined 2.19% to just under $24 billion.
The apparel sector, which accounts for about 85% of Bangladesh's total export receipts, also posted a sharp contraction, with shipments in December down by more than 14%. Industry insiders said small and medium-sized factories have been hit hardest, as a steep fall in orders continues to squeeze margins and capacity utilisation.
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BGMEA President Mahmud Hasan Babu, head of the country's main organisation of readymade garment manufacturers and exporters, told TBS that demand in the US market has declined somewhat due to the Trump administration's reciprocal tariffs. At the same time, China and India are carrying out aggressive marketing in the European market for the same reason. As a result, Bangladesh's exports of readymade garments have fallen slightly. In addition, some factories have shut down in the country due to certain government policy decisions, which has also contributed to the decline in exports.
He said to sustain export earnings in the future, the government must stand by businesspeople. Incentives are being reduced in Bangladesh, while incentives are being increased in India. At the same time, changes to labour laws are raising costs for Bangladeshi businesses. Therefore, initiatives are needed to reduce business costs in order to enhance the competitiveness of Bangladeshi entrepreneurs.
According to EPB data, export earnings from readymade garments amounted to $3.23 billion in December. In 2024, export earnings from this sector stood at $3.77 billion. Exports of both knitwear and woven garments declined, although earnings from garment exports in December increased compared to November.
During the July-December period of the current fiscal year, export earnings from readymade garments totalled $19.36 billion. In contrast, earnings from this sector during July–December of the previous fiscal year were $19.89 billion.
The major markets for Bangladesh's readymade garments are the United States and the countries of the European Union. The United States has imposed an additional 20% reciprocal tariff on Bangladeshi products, meaning Bangladeshi goods now face a total duty of 35% to enter the US market.
The Trump administration has imposed reciprocal tariffs on other countries as well. As a result, product prices in the US market have increased, leading American consumers to buy fewer goods. Although at the initial stage of imposing these reciprocal tariffs, the government and sector stakeholders had expressed hope that Bangladesh's exports to the US would increase.
On the other hand, the Trump administration has imposed higher reciprocal tariffs on India and China than on Bangladesh. Consequently, exporters from these two economically stronger countries are offering various discounts to boost exports to EU countries, prompting buyers in those markets to purchase more products from China and India.
CPD Executive Director Fahmida Khatun told TBS that foreign exchange reserves have been increasing gradually in recent times. "If export earnings decline, an imbalance will be created in the balance of payments. Foreign currency will again have to be drawn from reserves to pay import bills and service external debt, which is not positive for the economy."
She said that the bulk of the country's export earnings comes from readymade garments, and it is necessary to review the reasons behind the decline in export earnings. If exports fall due to US tariffs, emphasis should be placed on exploring new markets and exporting new products.
According to EPB data, exports of frozen products amounted to $255 million over the past six months, which is 3.72% higher than the same period last year. However, compared to December of the previous year, export earnings from this sector fell by 21.20% in December. Earnings from exports of fresh fish, shrimp and crab increased.
Similarly, export earnings from agricultural products also declined. Over the past six months, Bangladesh exported agricultural products worth $534 million to various countries, which is 10.30% lower than the same period last year. Compared to December of the previous year, export earnings from this sector fell by 27.56% in December. According to EPB data, exports of vegetables, tobacco, fruits, spices, dried foods and oilseeds increased.
Exports of plastic products also declined compared to the previous year. In addition, exports of specialised textiles, various types of footwear, ceramic products, glass and glassware fell.
Exports of leather and leather goods increased over the past six months compared to the first six months of the previous fiscal year. According to the EPB report, export earnings from leather and leather goods amounted to $609 million over the past six months, up from $577 million in the corresponding period of the previous fiscal year. However, compared to December of the previous year, exports in this sector declined by 12.36% in December.
Likewise, export earnings from jute and jute products increased, particularly exports of jute yarn and jute bags, although exports of raw jute declined. Earnings also rose from exports of home textiles such as bed sheets, kitchen textiles and tents. Export earnings increased as well from engineering products such as iron, copper wire, stainless steel ware, electrical products and bicycles.
Regarding the decline in export earnings, BKMEA President Mohammad Hatem said, "As you know, for the past few months our export growth has been on a negative trajectory. The new tariff rates imposed by the United States have turned the global export market upside down. This has also affected the US market itself, where our exports are taking a significant hit.
"In addition, countries such as India and China that are unable to export to the US market because of the additional US tariffs are now rushing to export to the European Union market. As a result, they are securing garment export orders by cutting prices. In this situation, Bangladeshi exporters are unable to obtain orders for similar products."
