Bangladesh ready to beat China as top clothing exporter to EU

DHAKA: Bangladesh’s massive clothing industry is looking to grab China’s crown as the top garment exporter to the European Union, as shifting supply chains in the wake of the conflict in Ukraine and other global geopolitical tensions drive up orders to the densely populated South Asian nation.
Boosting shipments to Europe will bolster a crucial part of Bangladesh’s economy, with ready-made garment (RMG) manufacturers already contributing around a fifth of the country’s gross domestic product and more than 80% of its export earnings.
Bangladesh’s exports of clothing to the EU surged nearly 42% in the first nine months of 2022 from the same period the year before to $19.4 billion, while Chinese shipments grew about 22% to $25.5 billion, according to the latest data from the EU’s statistical office, Eurostat.
“A lot of work orders were shifted to Bangladesh from China because of the recent trade war between China and the U.S.,” Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Nikkei Asia. Mounting tensions between Washington and Beijing have driven many brands to seek out non-Chinese suppliers in sectors ranging from clothing and textiles to consumer electronics and smartphones.
Major EU buyers of clothes made in Bangladesh include fashion chains H&M, Primark, Zara, G-Star Raw and Marks & Spencer.
Strong clothing exports are vital to Bangladesh as it struggles with dwindling foreign exchange reserves, even as it received a dose of economic relief earlier this year when the International Monetary Fund’s board approved a $4.7 billion loan program to the country.
With a population of nearly 170 million people, Bangladesh has a sizable potential workforce and is one of around 45 developing countries that currently enjoy duty-free and quota-free access to all EU markets, except arms and ammunition. In contrast, Chinese exporters must pay duty.
“Buyers prefer Bangladesh due to its zero-tariff export facilities to EU markets,” said Ashikur Rahman Tuhin, managing director of TAD Group, which manufactures a range of products including clothing. All the garments it makes go to Europe. –Agencies