Expectations from the new government: Apparel industry perspective

The BNP-led alliance, which secured a landslide victory in the election, formed the government on 16 February, with its charismatic leader, Tarique Rahman, becoming the Prime Minister of Bangladesh. 

The people of Bangladesh have placed their trust in him and await, with anticipation, the economic prosperity his leadership promises to deliver. The business community shares this optimism and is hopeful that commerce will flourish under his stewardship.

In his address on the first day of his return to Bangladeshi soil following 17 years in exile, Tarique Rahman declared, "I have a plan." We believe that, with his strategic roadmap, he will propel the country forward and cultivate a thriving economy. The nation's apparel industry, serving as the lifeblood of the economy, will be the cornerstone of this journey towards prosperity.

Bangladesh's apparel industry currently stands at a critical juncture. The sector experienced declining exports for six consecutive months before rebounding to growth in January 2026. Despite gas prices surging by 286.5% and electricity costs rising by 33.5% over the past five years, the industry continues to grapple with an acute energy crisis. 

Monthly minimum wages increased by 56.25% in December 2023, accompanied by the introduction of a 9% annual increment in December 2024. Collectively, these factors have driven production costs up by more than 50%. Meanwhile, competing nations are gaining ground through robust economic diplomacy and strategic positioning.

Whether the apparel industry will survive and thrive at this crossroads depends critically on how the newly elected government approaches economic governance and business facilitation. While a comprehensive list of recommendations for the incoming administration could be extensive, certain fundamental priorities stand out. If addressed effectively, these will set the apparel industry — and indeed the broader economy — on a positive growth trajectory.

Establishing stable and predictable monetary policies

The foremost expectation from the new government is the presentation and projection of stable, predictable monetary policies that inspire confidence among both domestic and international investors. Economic uncertainty has long been identified as the single greatest barrier to business expansion and new investment in Bangladesh. 

Critical parameters such as bank interest rates, foreign exchange rates (particularly the US dollar exchange rate), and inflation have experienced significant volatility in recent years, creating an environment of apprehension among entrepreneurs and investors.

If the incoming government can ensure, and publicly commit, that these fundamental economic indicators will be maintained within reasonable bands for at least a decade, it would represent a transformative shift in the investment climate. Such a commitment, communicated firmly and consistently from the very inception of the new administration, would send a powerful signal to the global business community.

Resolving the energy crisis and embracing green energy

The second critical expectation centres on energy — both addressing the immediate crisis and charting a sustainable path forward. Bangladesh's apparel and textile industry has been severely affected by persistent energy shortages, with factories frequently experiencing load-shedding, forced production halts, and escalating energy costs. This crisis has directly undermined competitiveness, delayed shipment schedules, and damaged the country's reputation as a reliable manufacturing destination.

The new government must take immediate and adequate measures to resolve the current energy crisis through short-term interventions such as improving power generation capacity, enhancing distribution infrastructure, and ensuring priority energy allocation to export-oriented industries. 

However, short-term fixes alone will not suffice. The government must simultaneously develop and implement a comprehensive roadmap for transitioning to green and renewable energy sources.

The global apparel industry is increasingly oriented towards sustainability, with major buyers and brands setting ambitious carbon-neutrality targets. Bangladesh's manufacturers, many of whom have already invested heavily in green building certifications and sustainable practices, require governmental support to access renewable energy at competitive prices. 

This could include incentives for rooftop solar installations, the development of solar and wind energy parks specifically for industrial use, and the facilitation of power purchase agreements that make green energy economically viable for manufacturers.

Infrastructure development to support the $100 billion vision

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has articulated an ambitious yet achievable vision: reaching $100 billion in apparel exports by 2030. This target, if realised, would significantly strengthen the economy and cement the country's position as the world's second-largest apparel exporter. However, achieving this vision requires more than industry effort alone — it demands substantial governmental support in critical infrastructure development.

Two infrastructure bottlenecks stand out as particularly urgent: Chittagong Sea Port and Hazrat Shahjalal International Airport in Dhaka. Chittagong Port handles the overwhelming majority of Bangladesh's import and export cargo, yet it has long struggled with congestion, inefficiency, and limited capacity. Ships often wait days for berth allocation, containers experience delays in clearance, and overall logistics costs remain higher than those of regional competitors. 

The new government must prioritise significant capacity expansion at Chittagong Port, including deepening channels, adding berths, modernising cargo-handling equipment, and digitising customs and clearance procedures.

Similarly, Dhaka Airport serves as a critical link for high-value, time-sensitive shipments and for the movement of international buyers, technical experts, and business delegations. Expanding its cargo-handling capacity, improving customs efficiency, and potentially developing a dedicated air cargo hub would significantly enhance Bangladesh's competitiveness in fashion-forward, quick-turnaround segments of the apparel market.

Comprehensive skills development and human capital enhancement

The BNP prominently featured employment generation in its election manifesto, recognising it as a fundamental development challenge and public aspiration. The apparel and textile sector, as the country's largest formal employer, must be central to any credible employment strategy. 

However, the industry increasingly faces a paradox: while unemployment remains high, manufacturers struggle to find workers with the appropriate skills for increasingly sophisticated production processes and technological systems.

The new government should establish a comprehensive, industry-aligned skills development scheme that addresses the full spectrum of human capital needs. For unskilled labourers, this means creating accessible training programmes that impart fundamental sewing, finishing, and quality-control skills, enabling them to enter the workforce productively.

For young graduates, it means developing specialised technical education programmes in areas such as textile engineering, fashion design, merchandising, supply-chain management, and industrial engineering.

Navigating LDC graduation and securing favourable trade terms

The incoming government will face a critical challenge during its tenure: managing Bangladesh's graduation from Least Developed Country (LDC) status, currently scheduled for 2026. While this graduation represents recognition of the country's development progress, it also poses significant challenges for the apparel industry, which has benefited enormously from preferential market access — particularly duty-free, quota-free access to the European Union under the Everything But Arms (EBA) initiative.

The government should pursue a two-track strategy. First, it should engage in intensive diplomatic efforts to secure a deferral of graduation by at least five years, arguing that the economic disruption caused by recent global events — including the pandemic and geopolitical tensions — warrants additional time for preparation. Such a deferral would provide crucial breathing space for the industry to adjust and for the government to negotiate favourable alternative arrangements.

Simultaneously, the government must engage in comprehensive diplomacy to ensure favourable trade benefits even after graduation. This includes negotiating Free Trade Agreements (FTAs) with key markets, while Preferential Trade Agreements (PTAs) with emerging markets could open new opportunities. 

The government should also explore the possibility of accessing the European Union's GSP+ scheme, which offers preferential access to countries implementing international conventions on human rights, labour rights, environmental protection, and good governance.

Beyond these five priorities, the new government should consider how to complement the apparel and textile industry with intelligent policy support that remains compliant with international trade rules. With LDC graduation approaching, direct subsidies and incentives to the sector will become increasingly constrained by World Trade Organization (WTO) regulations. 

However, there are numerous examples — most notably from neighbouring India — of how governments can indirectly support their textile and apparel industries through legitimate measures. The government should study successful models from competing countries and adapt them to Bangladesh's context, ensuring that the apparel industry receives the policy support necessary to remain competitive as preferential trade access gradually diminishes.

A dedicated ministry for the RMG sector

A longstanding obstacle confronting the apparel industry has been the fragmented bureaucratic landscape that compels factory owners to navigate multiple ministries to meet disparate regulatory requirements. This administrative dispersion not only creates inefficiencies but also impedes the sector's ability to respond swiftly to emerging challenges and opportunities.

The sector, which accounts for over 80% of the nation's export earnings and employs approximately four million workers, requires coordinated policy intervention that transcends ministerial silos. 

A specialised RMG ministry would serve as a central coordinating body, regularly convening trade associations, international buyers, factory owners, labour representatives, and other key stakeholders. Through systematic dialogue and strategic planning, such a ministry could streamline regulatory compliance, harmonise competing policy objectives, and formulate decisive interventions to enhance the industry's global competitiveness.

These are eminently reasonable expectations, and addressing them will benefit not only the apparel sector but the broader economy as well.

Abdullah Hil Nakib is the Deputy Managing Director of Team Group. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.