The Bangladeshi textile industry, known as one of the world’s leading “garment capitals”, is going through an unprecedented difficult period. As the second largest textile exporter in the world, with a value of more than 47 billion USD last year, Bangladesh is currently facing a 25-40% decrease in orders.
The main reasons for this situation include a decline in global demand due to inflation, especially from large markets such as Western Europe and Russia. Specifically, some businesses have stopped exporting to Russia, reducing their revenue from millions of USD to zero. Moreover, the gas supply crisis has forced many businesses to abandon orders due to high production costs, exceeding export prices.
The textile industry is very sensitive to economic fluctuations. The Asian Development Bank (ADB) has warned that over-reliance on the sector could pose long-term risks to the Bangladeshi economy. Currently, about 85% of the country’s exports come from the textile and garment industry, reflecting a lack of diversification in other economic sectors.
To overcome this crisis, Bangladeshi businesses need to diversify their export markets and improve their production processes to reduce costs. Only then can they remain competitive in an increasingly demanding global textile and garment market.
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We can see that, despite being the “garment capital” of the world, Bangladesh is facing serious challenges that need to be addressed to protect its key industry and ensure sustainable development in the future.
Bangladesh is currently facing significant challenges, including rising labor costs, increased competition from neighboring countries, environmental concerns, and geopolitical tensions that could affect trade routes and partnerships.
For Vietnam, which has also established itself as a leading exporter in the textile and garment industry, these challenges present potential opportunities. Vietnam could position itself as an alternative hub for garment production and export, especially with its strong network of free trade agreements (FTAs) such as the CPTPP and EVFTA, providing tariff advantages to key markets like the EU and Japan. Additionally, as global fashion brands diversify their supply chains to reduce dependency on any single country, Vietnam’s growing reputation for skilled labor, competitive costs, and sustainable practices makes it an attractive option.
This situation opens up new possibilities for collaboration between Vietnam and Bangladesh in the textile industry, such as co-investment, knowledge exchange on sustainable production, and trade partnerships. Furthermore, Vietnam’s burgeoning expertise in high-value garments, along with its strategic location in Southeast Asia, allows it to tap into markets where Bangladesh may struggle due to logistical challenges. The rise of e-commerce and demand for faster supply chains also favors Vietnam’s advanced infrastructure and export-import capabilities, positioning it as a critical player in the global garment trade for years to come.