Bangladesh has overtaken China in terms of the number of clothing exports (volume) to Europe in the July-April FY2022-23 period, according to Eurostat data.

In addition, as per Eurostat data, during the past 5 years, the value of EU’s apparel import from Bangladesh has grown by 9.42% CAGR, whereas their import from the world has shown 4.31% average annual growth.

It is due to the reason that Bangladesh’s garment sector is receiving more orders from the world's largest market than ever before. While, China is the largest garment producer in the world.  The country occupies 38 percent of the world's market in this sector.  Europe is the world's leading importer of ready-made garments (RMG).  European Union (EU) countries account for nearly one-fourth of the world's total apparel imports.  Due to various reasons including geopolitics, China's garment export rate has decrease d a lot.

Bangladesh exports more than 20 billion dollars of garments to 27 EU countries annually.  In the first ten months of the last financial year, these countries bought 347 crore kg of clothes from all over the world.  About one-third of which is in Bangladesh.  The amount of which is 10.27 million kg. 

The value of garments exported from Bangladesh is 1.94 billion dollars.  And export growth has been 41 percent.  BGMEA says that Bangladesh has been successful in closing off China's economic trade with the United States due to the increased demand for Bangladeshi denim, labor shortages and cost increases.

Bangladesh exported the highest 133 million kg equivalent of ready-made garments to the EU market last year compared to any other country.  On the other hand, China exported 131 million kg of ready-made garments (RMG).  Compared to 2021, Bangladesh's clothing exports increased by 21.20 percent in terms of volume last year, but China's increased by only 11.86 percent.

In 2022, the EU’s apparel imports from the world grew by 20.97% year-on-year. EU’s apparel import from the world reached $103.09 billion in 2022 from $85.23 billion in 2021 which was $90.53 billion in 2018.

As per the data, the EU imported $22.89 billion worth of apparel from Bangladesh in 2022 which was $16.87 billion in 2021 and $16.44 billion in 2018. With a 22.20% share in value terms, Bangladesh remains the second largest apparel import source for the EU after China.  In terms of quantity (measured in kilogram), EU’s clothing import from Bangladesh also increased by 21.20% Y-o-Y i.e. to $1.32 billion in 2022 from $1.09 billion in 2021.

Last year, Turkey exported the third highest garment worth 1.98 billion dollars to the EU market after Bangladesh and China.  In addition, India exported $484, Vietnam $457, Pakistan $394, Cambodia $381, Morocco $312, Sri Lanka $162 and Indonesia $136 million worth of RMG.

Bangladesh is the second-highest low-cost apparel exporter in the EU market.  The average price of garment exported by Bangladesh last year was 17.27 dollars, which was 15.42 dollars a year ago i.e. in 2021.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA), President, Faruque Hassan said, “In recent years, we have made significant progress in product diversification, particularly, our manufacturers have made considerable investment in backward linkage industry and high-end sophisticated items. We are also working for mid and upper-mid-priced brands in Europe and exporting high-valued items these days which is reflected in our unit price surge in recent years. If we look at the unit price (USD value/kg), it shows an upward trend. In 2022, the EU’s cumulative unit price of imports from Bangladesh increased by 11.95% Y-O-Y (to $17.27 in 2022 from $ 15.42%). Therefore, in both value and quantity wise EU’s import from Bangladesh saw 35.69% and 21.20% growth respectively leading to this per unit price surge in 2022. It also proves that value addition is happening in Bangladesh.”

Faruque Hassan added, “We have already reached number one in denim.  We are ahead of China in this regard.  In the last year, our growth was more than China.  In the future, we hope to surpass China in more products.”

“While we analyze trade with the EU, it becomes rekey to mention that as an LDC Bangladesh is enjoying a duty-free market access in the EU under the EBA scheme which is a key success factor behind this significant export growth. This market access will continue till 2029.”

“And BGMEA has been continuing its efforts in the area of apparel diplomacy. In March, I along with a delegation led by the Principal Secretary to the Honorable Prime Minister visited Brussels where we met a number of European Parliament Members, and the Chair of the European Parliament's Committee on International Trade (INTA).  During the meeting, we urged the EU to extend the transition period of GSP from 3 years now to 6 years to ensure smoother and sustained graduation of Bangladesh.  Since the GSP is very much important for our trade competitiveness, the extension in the transition period would help us to prepare better for the future,” BGMEA, President added.

BGMEA First Vice President Syed Nazrul Islam said to media, “The reason behind the increase in exports is the trade war between China and the United States on the one hand and a stable environment in our country on the other hand.  Our denim and knit items go well in Europe.  This is why China is lagging behind us.”

 According to Eurostat statistics, 5 years ago, China had about 32 percent of the European clothing market.  Which has come down to 22 percent this year.  And the occupation of Bangladesh was 18 percent which has increased to 24 percent. The price of garments exported from Bangladesh has also increased by about $2 per kg.  In 2021, the price per kg was 15.28 dollars and in 2022 was 17.08 dollars.

 Factory owners say that Bangladesh is now leaning towards making expensive clothes.  Apart from that, the design and meaning have also changed a lot.  Due to these reasons, there is a bright possibility to advance in the clothing market of Europe.

Khandaker Belayet Hossain, Manager, Asian Apparels Limited said to media, "But we are not lagging behind.  We are moving towards value-added products.  Our market is getting better than ever by creating new styles, and designs."

BGMEA leaders say it is now necessary to reduce dependence on China for raw materials in the garment sector.  For this reason, the government should work to strengthen backward linkage institutions.  But the energy crisis is also a big problem now.

BGMEA First Vice President Syed Nazrul Islam said to media, “If electricity and gas can be guaranteed and if policy support is given to the entrepreneurs who are in the backward link, then the dependence on China will be reduced.  If the dependence on China is reduced, production in our country will increase.  And if that is the case, we can also increase our business in America and Europe.”