Bangladesh forced to cut RMG prices to stay afloat in EU market
This heightened competition is a direct result of both countries facing high reciprocal tariffs in the United States (US) market, compelling them to pivot their focus to the EU
Highlights:
- Competitors' price cuts force Bangladesh to lower EU garment prices
- India and China shift to EU after US tariffs
- Bangladesh's EU growth slows despite higher volumes and market share
- EU apparel imports rise on volume, but prices fall widely
- Bangladesh faces intensified pressure as rivals slash prices more
- Recent three-month export dip raises concerns for Bangladesh's outlook
Bangladesh's garment exporters are being forced to reduce unit prices in the European Union market due to aggressive pricing strategies adopted by competitors, particularly India and China.
This heightened competition is a direct result of both countries facing high reciprocal tariffs in the United States (US) market, compelling them to pivot their focus to the EU.
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Exporters have noted that while Bangladesh's year-on-year growth in the EU market remains better than that of India and China for the January-September period, the growth rate has slowed significantly since the US reciprocal tariffs came into effect in July. As a result, exporters believe Bangladesh must urgently define a strategy to maintain its market share in its primary export destination.
Prices drop and volumes surge
Data from the Bangladesh Apparel Exchange shows that from January to September 2025, the EU's total apparel imports expanded by 7.14%, reaching €68.47 billion.
This growth was primarily volume-led, with the total imported volume increasing by 13.80% (million kg), while the average unit prices declined by 5.86% (€/kg). This indicates strong demand but intensified price competition.
Bangladesh maintained its position as a key sourcing destination, with its apparel exports to the EU rising to €15.26 billion from €13.48 billion in 2024, representing 13.17% growth.
Bangladesh's expansion was driven by a 15.55% increase in volume, coupled with a 2.06% decrease in unit prices. This suggests Bangladesh gained market share through a combination of competitive pricing and sustained buyer interest.
While Bangladesh's unit price decreased by 2.06%, its key competitors – China, India, Pakistan, and Cambodia – experienced deeper unit price cuts, reflecting the intensity of the competition.
Mohiuddin Rubel, managing director of the Bangladesh Apparel Exchange, noted that while these countries achieved robust volume and value growth, the "broad-based decline in average prices highlights the intense competitive pressure within the EU apparel market, as well as buyers' focus on cost containment in an inflationary environment."
In contrast to the strong growth experienced by Asian nations, Turkey, another major supplier to the EU, saw its apparel imports decline by 9.80% over the same period.
US tariffs trigger market shift
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), attributed the severe pricing pressure directly to the US policy.
"The Trump administration's high reciprocal tariffs on India and China have caused these two countries to aggressively target the European market. Indian and Chinese exporters are trying to increase their exports to Europe by lowering their garment prices, which has resulted in a slight reduction in our orders from Europe," he told TBS.
Hatem warned that this situation is likely to continue until the US market is stabilised through tariff negotiations with India and China. "We may lose some orders from Europe in the coming months," he added.
Recent performance raises alarm
Mohiuddin Rubel further raised the alarm by highlighting the recent downturn. "The concerning matter is that Bangladesh's exports to the European market over the last three months [July-September] have been worse than in the preceding six months. But exports for India, China, and other countries have performed well during these three months."
He noted that China is now exporting an additional $1 billion per month, jumping from $2 billion to $3 billion monthly, with Vietnam, Cambodia, and Pakistan also performing strongly.
Export Promotion Bureau (EPB) data shows that Bangladesh's export earnings decreased during the July-September period in Europe's largest markets, Germany and France, although exports rose in Spain, Italy, Belgium, and the Netherlands.
