Sustainability vs price pressure: Why Bangladesh’s garment industry is feeling the squeeze

In the first quarter (July–September) of the fiscal year 2025–26, Bangladesh's apparel export to Europe increased by 3.64%, according to data from the Export Promotion Bureau (EPB). The latest figures from the European Apparel and Textile Confederation (Euratex) show that the European Union's total apparel import from Bangladesh from January to September 2025 increased by 7.14%. But this apparently cheerful statistic has a gloomy side, as this growth was primarily volume-led. While the total apparel import volume increased by 13.80% (million kg) from January to September, the average unit prices of apparel plummeted by as much as 5.86% (euro/kg), the Euratex data revealed.

Europe is currently going through a silent recession, in the opinion of several international economists and economic research firms. If the region is not already in recession, it is undoubtedly on the verge of an economic depression following crises such as the pandemic shock of 2020 and increasing global trade tensions. Geopolitical uncertainty has deepened the challenge. The Russia–Ukraine war disrupted the EU's energy supply, while tensions in the Middle East are constantly posing risks to oil market stability. Moreover, demographic headwinds — including an ageing workforce and declining fertility rates — have exacerbated the problem, placing strain on European purchasing power.

All of this has resulted in slower clothing sales from the beginning of the year. To entice consumers back into shops, apparel brands and retailers are continuously lowering their retail prices. The steep 5.86% decline in EU apparel import prices from Bangladesh between January and September 2025 is a reflection of buyers' tendency to increase sales by lowering prices.

Unfortunately, buyers are exerting downward pressure on manufacturers to reduce prices. Meanwhile, apparel manufacturers are facing the double whammy of EU buyers' price pressure and the United States' reciprocal tariff. The heightened competition among global apparel-producing countries to navigate the US market while withstanding the reciprocal tariff is compelling Bangladeshi manufacturers to submit to EU buyers' price compression in order to maintain the country's position as the second-largest apparel exporter in the region.

This situation is putting the very essence of sustainability into question. Promoting sustainability has been the most talked-about doctrine in the fashion industry over the past decade or more. But environmental and social sustainability can never be truly practised while ignoring the economic aspect of sustainability. How can a business take care of people and the planet if it cannot survive?

The citadel of sustainability is built upon the foundation of partnership between buyers and manufacturers. Both parties have to collaborate to ensure a win–win outcome. Any tendency of "I win when you lose" undermines sustainability.

Due to higher wages, rising energy costs and a notable surge in raw material prices, the cost of production in Bangladesh's apparel industry has increased by about 50% over the last five years. Apparel prices are declining while production costs are increasing manifold. Without addressing the crux of this problem, any aspiration for a sustainable fashion industry will remain a chimera. All stakeholders in the fashion industry must work together to ensure that sustainability prevails over price pressure.

Ashikur Rahman Tuhin is the Managing Director of TAD Group and a former Director of the Bangladesh Garment Manufacturers & Exporters Association (BGMEA).

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