Over 400 garment factories shut down in three years: Muktadir

Over 400 garment factories have shut down in Bangladesh over the past three years due to a range of domestic and global challenges, Commerce Minister Khandakar Abdul Muktadir said in Parliament on Thursday.

“From July 2023 to June 2026, 282 member factories of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and 120 member factories of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have closed,” he said.

The minister gave the information in a written reply to a question from Bangladesh Jamaat-e-Islami MP Md Ruhul Amin.

Referring to a report published by BGMEA on June 22, he said the closures were attributable to eight major factors: the COVID-19 pandemic; the Russia-Ukraine war; the Israel-Palestine conflict in the Middle East and the US-Iran conflict; the global economic slowdown; political instability in Bangladesh; liquidity shortages in the banking sector caused by money laundering; free trade agreements among India, Vietnam and the European Union; and reluctance among foreign buyers to place orders with small and medium factories due to their preference for easier direct monitoring.

Muktadir said the government is taking various measures to retain Bangladesh’s share of the global apparel market.

However, he warned that Bangladesh’s graduation from the least developed country (LDC) category will lead to the loss of preferential market access under trading schemes offered by developed countries, potentially affecting exports worth $17.5 billion.

The minister said Bangladesh has already signed an Economic Partnership Agreement (EPA) with Japan and is negotiating a Comprehensive Economic Partnership Agreement (CEPA) with South Korea.

Initiatives are also underway to sign EPAs, CEPAs or free trade agreements with the European Union, Regional Comprehensive Economic Partnership (RCEP) member countries, the United Arab Emirates, Singapore, Indonesia, China and other potential export markets, he said.

In reply to another question from BNP MP Md Jahander Ali Miha, Muktadir said the export earnings target for the apparel sector has been set at $44.505 billion for fiscal 2026-27. The sector earned $3.88672 billion in July this year.

In reply to a supplementary question from Jamaat MP Abdul Baten, he said Bangladesh’s trade deficit with India has increased further in fiscal year 2025-26, with bilateral trade now standing at nearly $13 billion.

The minister said Bangladesh exported goods worth $1.89 billion to India during the period, while the rest represented imports from the neighbouring country.

He said Bangladesh also has a significant trade deficit with China, but the government wants to focus on overall export capacity rather than addressing the trade deficit with any particular country in isolation.

“Our focus should be on increasing our overall export capability,” Muktadir said.

The government has identified leather, jute, shipbuilding, light engineering and semiconductors as sectors with potential to boost exports, he said, adding that policy support and efforts to attract new investment are being pursued to strengthen their export capacity.

The minister also said there is scope for increasing exports to the Indian market.

While some barriers exist on India’s side, Bangladesh has also created some obstacles to bilateral trade over the past two years, he added.

Muktadir said an Indian business delegation has recently visited Bangladesh and proposed forming a task force with Bangladeshi businesses to improve infrastructure.

The government has shown interest in the proposal, he said.

Explaining Bangladesh’s higher imports from India, the minister said most imports were made by the private sector rather than the government. Businesses import from sources where they could obtain goods at competitive prices, he said.

According to figures placed in Parliament by the minister in reply to a question from BNP MP Lutfur Rahman, Bangladesh’s trade deficit with India stood at $7.314 billion in FY21, $11.699 billion in FY22, $7.717 billion in FY23, $7.431 billion in FY24 and $7.860 billion in FY25.

In reply to a question from Chattogram-13 MP Sarwar Jamal Nizam, Muktadir said Bangladesh is almost entirely dependent on imports to meet its demand for edible oil.

The country currently requires an estimated 2.2 million to 2.5 million tonnes of edible oil annually, he said.

In reply to a question from Kushtia-2 MP Md Abdul Gafur, the minister said Bangladesh exported betel leaves worth $22.79 million in FY26, with the main export destinations being Lebanon, Oman, Pakistan, Saudi Arabia and the United States.

In reply to a question from BNP reserved-seat MP Salina Sultana, he said the import of three-wheelers with two-stroke engines, including tempos and auto-rickshaws, under the relevant HS codes of heading 87.03 was prohibited under the Import Policy Order 2026-29.

However, Muktadir said parts are being imported under a National Board of Revenue notification issued in 2026 to support the local electric three-wheeler manufacturing industry. -UNB