‘We’ve faced crisis after crisis — and still moved forward’: Mahmud Hasan Babu

In the recently concluded 2025-27 Bangladesh Garment Manufacturers and Exporters Association (BGMEA) election, Mahmud Hasan Khan Babu, managing director of Rising Group, ran under the banner of the Forum panel and secured the presidency of the apex trade body.

Babu spoke to TBS in a recent interview about a wide range of issues, including US President Trump's tariffs, Bangladesh's preparedness for the 2026 LDC graduation, and the energy crisis in the industrial sector. 

Our RMG sector is marching forward facing one challenge after another, he told TBS. 

"If the challenges were smaller, our journey would have been much better. Bangladesh is set to graduate from the LDC list in November 2026. There are opinions in our business community that for the betterment of business opportunity, this graduation process should be deferred by two years," he added.

However, the government's view is that LDC graduation should be completed within the stipulated time. 

"It does not matter whether the deferral happens or not; we have to take preparation from now so that we do not suddenly have to face major problems," Babu said.

He mentioned that many are under the impression that after graduation, only export-oriented sectors would be affected.

"Yes, the export-oriented sector will be affected... our duty and tax benefits we enjoy for RMG exports will go away. But at the same time, other local industries will also face challenges. Incentives will be withdrawn. To face the shocks, we need a low cost fund under the supervision of the central bank's refinancing scheme which will help navigate the post-LDC graduation period." 

The BGMEA president-elect further suggested that the government could facilitate schemes like Pre-Shipment Credit (PSC). PSC was introduced during the pandemic to support export-oriented factories. The scheme ended in May. 

Looming US tariff threat and energy crisis

The US is the single-largest RMG export destination for Bangladesh. President Trump initially slapped a 37% "reciprocal tariff" on Bangladesh's exports to the country, but later postponed it for three months. 

Now a flat 10% tariff is in place, but the previous 37% is looming above the head of the RMG sector. 

"There is a $6 billion trade deficit between Bangladesh and the US. Most of the major US exports like cotton, soyabean face no tariff. Bangladesh, on an average, charges 6% tariff on US goods whereas in contrast, we pay a flat 15-16.50% tariff for our exports to the US. 

"To narrow the trade deficit, we can import more LNG from the US, not necessarily to make the US happy, but to meet our needs," Babu said. 

If Trump's tariff is really reciprocal, the US tariff on Bangladesh-made products should be 6%, he added.

"We export RMG to the US with more than 16% average tariff. If Trump means reciprocal, our export duty should be what Bangladesh charges. I am very hopeful that the US tariff will not be 37%. If the tariff remains at 37%, we will face a shock primarily, but at the end of the day, it is the American consumers who will bear the brunt of it," Babu said.

He called for negotiating Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) to ease the effect of the shocks.

Regarding challenges in the energy sector, Babu noted that the crisis cannot be resolved overnight. 

"What we can do is plan about future consumption and plan accordingly. To meet the gas demand, the government is bringing in additional LNG as a temporary relief. We have strong forex reserves as well as healthy exports which will help us bring additional LNG," he said.

But the RMG leader acknowledged that this is a short-term plan. "We need to focus on gas exploration and figure out how to transport gas from Bhola to the national grid." 

Wages, workers' rights and fast fashion

In a recent letter written to Chief Adviser Dr Yunus, the American Apparel & Footwear Association (AAFA) and Fair Labour Association (FLA) urged the government to take measures on reviewing garment workers' wages every year instead of five years.

"Our labour reforms commission also suggested a similar proposal. We don't have any problem with yearly wage reviews, but the existing five-year tenure should be finished first, and then we can go for annual ones based on a solid formula so that we don't need to deal with strikes and vandalism each year. In the formula, we have to determine how much we need to adjust based on inflation and other factors. If there is a solid method to address every year's wage review, I believe that BGMEA members will not oppose the idea either," explained Babu.

Asked about the demands for withdrawing cases filed against workers' leaders during protests, he said, "We have to examine two different things — grievances and unlawful activities. If there is an allegation of criminal activities against an individual, we have to deal with those issues within the parameters of the law. 

"On the other hand, I feel that nobody should ever be implicated in a case for promoting labour rights."

Discussing the environmental concerns regarding fast fashion, Babu said, "Fast fashion products become unusable after four to five washes. But new technology is being developed and many European countries are working on how to make the products more sustainable, making them last even after 20-30 washes. 

"We are working on making our products more environmentally friendly and sustainable. We need more diversified products and markets to make the RMG sector more sustainable," he concluded.