Fashion
Bangladesh garment makers eye $5 bn more in exports post policy tweak
Under this arrangement, the buyer supplies raw materials like fabrics and accessories. Manufacturers receive only the cutting and making charges.
Bangladesh apparel manufacturers expect an additional $5 billion from high-end garment exports in the first year after the government scraps the 50-per cent ceiling on free-of-charge (FoC) imports, trade body BGMEA said.
Under this arrangement, the buyer supplies raw materials.
The additional earnings could cross $10 billion in the second year once the FoC quota is fully abolished, BGMEA noted.
The additional earnings could cross $10 billion in the second year once the FoC quota is fully abolished, Chowdhury said.
The country’s Ministry of Commerce has decided to amend the Import Policy Order within the next two weeks, allowing garment exporters to source all raw materials from overseas buyers, process them and ship the finished products back, the Chief Adviser’s Office said.
Exporters now are permitted to import only half of the required raw materials under the FoC arrangement.
A few years ago, FoC imports were capped at 33 per cent of total raw materials. This was raised to 50 per cent later.
Bangladesh’s apparel exporters use FoC for less than 5 per cent of total shipments now due to restrictive conditions and reported complications at the Chattogram customs department.
As FoC is straightforward, less risky and faster, garment exporters feel without any quota on FoC import, global brands will place more orders with Bangladesh.
Manufacturers say orders for high-end man-made fibre and polyester garments are shifting from China to Bangladesh as the United States has imposed higher tariffs on Chinese goods.
Many Bangladeshi factories, however, cannot take full advantage of this as these are barred from importing more than half of raw materials under the current FoC regulations.
Chowdhury said FoC reduces risk as buyers cover raw material costs and cannot abruptly cancel orders, according to domestic media outlets.
However, Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA), said the government should consult all stakeholders before taking any decision. He believes higher import of raw materials could harm the domestic textile industry by reducing demand for local yarn, fabrics and accessories, and lowering local value addition.
Fibre2Fashion News Desk (DS)
With sustainability benchmarks rising, companies are rethinking how they produce and deliver, pivoting toward greener, more circular models that reduce waste, emissions, and resource use.
The stakes are high. In 2025, Vietnam’s exports to the EU reportedly reached $56.2 billion, up 10.1 per cent year on year, underscoring how pivotal Europe is for the country’s manufacturing base.
Vietnam’s textile and footwear exporters are accelerating sustainability efforts as stricter EU regulations reshape market access requirements.
Rising compliance pressure from measures such as CBAM and ESPR is pushing manufacturers toward circular production, cleaner technologies and greater supply-chain transparency, though limited green finance remains a major challenge for smaller firms.
The EU market, nevertheless, comes with its own challenges as access to this market increasingly depends on meeting strict environmental and product-design requirements.
The EU is rolling out an ambitious sustainability agenda, including the Carbon Border Adjustment Mechanism (CBAM) and the Ecodesign for Sustainable Products Regulation (ESPR). Together, these measures are changing what global suppliers must document, design, and decarbonise.
ESPR shifts expectations toward durability, repairability, and recyclability, while pushing manufacturers to reduce products’ overall environmental footprint. Supply chains are also expected to become more transparent through Digital Product Passports, and practices such as destroying unsold goods being phased out gradually.
For Vietnam’s exporters, compliance is becoming a baseline requirement to keep EU orders and remain competitive.
Recognising this, both the Government and industry players are stepping up. Vietnam’s long-term development strategy for textiles and footwear, which stretches to 2030 with a vision toward 2035, places sustainability at its core. The plan charts a path toward efficient, environmentally responsible growth anchored in a circular economy, where materials are reused, waste is minimised, and production cycles are closed rather than linear.
Crucially, it also provides a legal backbone to help businesses align with global sustainability trends.
On the ground, change is already underway. Textile and apparel manufacturers are investing in renewable energy, upgrading machinery, and fine-tuning production processes to cut emissions and resource use. These shifts are not just about compliance; they are about future-proofing operations in a market where green credentials increasingly determine who wins contracts.
However, the transition has not been entirely seamless. A key barrier seems to be access to green finance, especially for small and medium-sized enterprises. Large firms can more readily fund clean technologies and certification, while smaller suppliers often struggle to fund the shift, risking exclusion from high-value export markets if they cannot keep pace.
There is also a growing recognition that policy support needs to go further. As Vietnam leans into a circular economy, industry voices are calling for a more cohesive and comprehensive framework, one that not only sets clear standards for circular products but also actively incentivises recycling, cleaner production, and sustainable innovation.
Without this, progress risks being uneven, with smaller firms left behind.
Momentum is, nevertheless, building as manufacturers and policymakers push for better-aligned standards and support mechanisms. The goal is to narrow the gap between sustainability ambition and day-to-day implementation across the sector.
The aim is clear: create an ecosystem where businesses of all sizes can invest in circular solutions, strengthen their export capabilities, and meet the EU’s exacting standards head-on.
Fibre2Fashion News Desk (DR)
The increase was driven primarily by higher reinvested earnings and intra-company loans, indicating continued engagement by existing investors with Bangladesh.
Reinvested earnings rose by 318.25 per cent, from $103.79 million in 2024 to $434.10 million in 2025, while intra-company loans increased by 25.68 per cent, from $621.96 million to $781.68 million.
Bangladesh’s net FDI inflows increased by 39.36 per cent last year to $1,770.42 million compared with $1,270.39 million in 2024, the Bangladesh Bank said.
The increase was driven primarily by higher reinvested earnings and intra-company loans.
Reinvested earnings rose by 318.25 per cent, from $103.79 million in 2024 to $434.10 million in 2025, while intra-company loans rose by 25.68 per cent.
Equity capital remained broadly stable, rising by 1.84 per cent, from $544.64 million to $554.64 million in 2025, a release from Bangladesh Investment Development Authority said.
Greenfield project announcements declined by 16 per cent in 2025.
Fibre2Fashion News Desk (DS)
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