As labour costs rise across traditional apparel manufacturing hubs, Bangladesh is apparently quietly redefining the competitive edge that once relied on cheap manpower. Long known for its vast pool of low-cost workers, the country’s garment industry appears to be shifting towards technology and automation, signalling a strategic shift from labour-intensive production to machines, data, and speed.

Bangladesh’s garment industry is increasingly adopting automation and technology.
A study showed productivity grew 4.19 per cent annually during 2014–23, with automation-intensive segments like cutting, knitting and wet processing posting the strongest gains.
As technology adoption accelerates, policymakers now face the challenge of managing labour displacement.

Though gradual, the transformation is beginning to deliver measurable results now.

Media reports citing a study by a renowned autonomous multidisciplinary research organisation of the country, underlined that Bangladesh’s readymade garment (RMG) sector—driven by automation and technological upgrades—achieved average annual productivity growth of 4.19 per cent between 2014 and 2023.

At first glance, these gains may seem modest, but they are significant in an industry that employs millions and underpins a substantial portion of the national economy.

The RMG sector contributes an estimated 8.5–10.5 per cent of GDP and generates 80–85 per cent of export earnings, making even incremental improvements economically meaningful.

However, the productivity gains have not been uniform. Jackets reportedly led the way with 6.59 per cent annual growth over the decade, followed by knit lingerie at 6.43 per cent. Sweaters (6.05 per cent), home textiles (5.58 per cent), and T-shirts (4.39 per cent) also posted solid gains, benefiting from mechanisation, standardisation, and process automation.

By contrast, woven shirts, woven trousers, and denim reportedly recorded more modest growth of 3 per cent, 1.15 per cent, and 1.81 per cent, largely due to lower levels of automation.

Meanwhile, the automation-intensive segments of the RMG sector delivered the strongest gains. Cutting, knitting, and wet processing reportedly recorded annual productivity growth of 11.13 per cent, 9.85 per cent, and 6.11 per cent, respectively. Meanwhile, sewing—the least automated and most labour-dependent stage— reportedly posted the weakest growth at 3.57 per cent, while weaving and end finishing recorded growth of 4.43 per cent and 4.78 per cent over the decade.

The impact of technology is perhaps most visible in cutting. In the 1980s and 1990s, 10–12 workers using manual tools reportedly processed 4,000–5,000 pieces a day. Today, fully automated CAD- and CNC-driven systems allow just 2–3 operators to reportedly cut up to 10,000 pieces daily—three to five times faster and markedly more precise.

The report also notes a shift in knitting from low-gauge circular machines to microprocessor-controlled equipment with CAD/CAM integration, digital design functions, and fine-gauge capabilities, even as it highlighted wider adoption of automated cutting, semi-automatic sewing heads, laser or ozone finishing, auto-dosing dyeing systems, and digital quality-control tools across medium-scale factories.

However, most critically, the study also calls on policymakers to anticipate potential labour displacement as automation deepens and to plan for it proactively. In an industry that employs millions, the central challenge will thus be to balance efficiency gains with social stability, as the garment sector moves toward a more automated future.

Fibre2Fashion News Desk (DR)

In a press statement, SIMA said the incentives and policy corrections would support greater adoption of green energy by textile manufacturers while helping the industry navigate stress arising from recent global developments. SIMA chairman Durai Palanisamy noted that access to renewable energy has become critical for the power-intensive textile sector amid volatile export markets and rising compliance costs.

Tamil Nadu’s revised wind power policy is set to ease cost pressures on the state’s textile and garment industry by supporting greater adoption of renewable energy.
Industry body SIMA has welcomed measures such as retention of annual banking and lower infrastructure charges.
The amendments are expected to enhance competitiveness and support power-intensive units.

Tamil Nadu, India’s second-largest state economy, accounts for nearly one-third of the country’s textile business size. The state contributes around 28 per cent of total textile employment, 45 per cent of national spinning capacity, 22 per cent of power loom capacity, and holds a leading position in cotton yarn production and exports. It also houses over 70 per cent of India’s cotton knitted garment manufacturing capacity. The textile sector is a key pillar in Tamil Nadu’s ambition to achieve a $1 trillion economy by 2030.

However, the industry is currently facing strong headwinds from multiple international factors, including tariff actions by the United States, the European Union’s gradual shift away from fast fashion, and geopolitical uncertainties impacting textile trade flows, including developments in Bangladesh.

Tamil Nadu has been a pioneer in wind energy investment since the 1990s, driven by supportive government policies. A significant number of captive windmills used by textile units are now over 20 years old. Industry concerns had intensified after the 2025 wind repowering policy denied banking facilities and evacuation support, posing challenges for power-intensive sectors such as textiles that rely heavily on captive wind power. SIMA had repeatedly urged the state government to extend banking facilities for older windmills and allow operational life extensions of up to 40 years.

Welcoming the amendments notified through the latest government order, Palanisamy highlighted that the retention of the annual banking system, the sharp reduction in Infrastructure Development Charges from the earlier proposal of ₹30 lakh per MW for five years to ₹50,000 per MW per annum for life extension or refurbishment, and the simplification of procedures for obtaining life-extension certificates from chartered engineers are key industry-friendly measures.

According to SIMA, these amendments will enhance Tamil Nadu’s competitiveness vis-à-vis other textile-producing states while reinforcing its leadership in renewable energy adoption. Palanisamy also welcomed the continuation of Power Purchase Agreements and the option to opt for energy wheeling agreements.

He expressed hope that the state government would further consider extending banking facilities to captive windmills installed after 2018, a move that could help power-intensive textile units remain competitive and attract fresh investment into the state.

Fibre2Fashion News Desk (KUL)

For India’s textile and apparel (T&A) industry, which is deeply dependent on US buyers and already grappling with sharply higher duties imposed since August ****, the implications are severe. The US accounts for nearly $* billion of India’s T&A exports ($*.** billion during January–October ****, down from $*.** billion in ****), with apparel alone contributing $*.** billion. If a tariff were imposed anywhere near the headline rate, Indian garments would likely become commercially unviable almost overnight. US brands and retailers would be forced to reroute sourcing rapidly, while Indian exporters, who are highly exposed to the US market, would scramble to find alternative destinations for a large share of their exports. The US accounts for nearly $* billion of India’s T&A exports ($*.** billion during January–October ****, down from $*.** billion in ****), with apparel alone contributing $*.** billion, as per Fibre*Fashion**;s sourcing intelligence tool TexPro.

What exactly is the “*** per cent tariff” threat?