Bangladesh’s export sector is grappling with a multifaceted crisis driven by both external pressures and internal disruptions, threatening the country’s economic stability and future trade prospects.
On the external front, neighboring India has tightened restrictions on Bangladeshi exports via land routes, further complicating bilateral trade. Simultaneously, there is still no breakthrough in negotiations with the United States over tariff hikes announced by former President Donald Trump—an unresolved issue that looms large over future access to the U.S. market.
Adding to the strain, the ongoing war in Ukraine and instability in the Middle East continue to unsettle global trade flows. European buyers, particularly in the ready-made garment sector, are reportedly becoming increasingly cautious, delaying new orders and casting doubt on future growth.
Those concerned said that the country's export trade is facing an all-around crisis both at home and abroad.
Bangladesh Knitwear Manufacturers and Exporters Association (BKME) former president Fazlul Haque told Bangladesh Pratidin that the country's export trade is facing various domestic and foreign pressures. Western buyers are already skeptical amid global instability. As a result, they are being cautious about new orders.
“In addition, domestic problems have created a four-pronged crisis in the export sector. Gas, electricity crisis, LC complications, and the increase in the price of the dollar are old problems. In the meantime, the export sector has suffered a major loss due to the administrative crisis over the NBR. The gridlock created in customs clearance due to the shutdown has also created uncertainty about the timely supply of goods as per the buyers' orders.”
“Tariffs and non-tariff barriers of various countries in export trade have also created a major crisis,” he said.
The BKME leader said that the issue of land export ban from India has become the biggest tariff barrier in the country's export sector. US President Trump's announcement of tariff hike is one of the biggest tariff barriers in the history of the export sector.
“As the unrest in the Middle East continues to subside, Russia has intensified its attack on Ukraine. As a result, there is uncertainty about exporting goods to Europe. The government may not have anything to do with Ukraine, but the government may take the initiative to solve other problems,” he added.
The Finance Ministry has also admitted that if Trump's decision to impose tariffs is implemented, it will put the export sector in crisis. The Finance Ministry's macroeconomic policy statement released with the budget mentions that the recent tariffs imposed by the Trump administration may have a negative impact on the export sector.
The Finance Ministry said that similar tariffs are applicable to other competing countries. In addition, the government is also continuing discussions with the Trump administration. Even then, the fears have not subsided.
The macroeconomic policy statement projects a 10 percent growth in export earnings for the current fiscal year 2025-26.
The total export earnings will be 48.93 billion US dollars, according to the Finance Ministry's policy statement. The target of export earnings and growth shown by the Finance Department in the current fiscal year is much lower than the estimated target for the just-ended fiscal year.
Bangladesh's export earnings in the recently concluded 2024-25 fiscal year were set at $57.5 billion. The growth target for both goods and services was set at 12.4 percent.
Businessmen said that the export-oriented ready-made garment sector has lost an average of Tk 2,000 to Tk 2,500 crore every day due to the NBR movement alone. India's ban on land-based exports will result in a total loss of about $650 million in exports.
A review of NBR data shows that Bangladesh's exports to India in the fiscal year 2023-24 were $1.59 billion. In the first round, India imposed the ban on May 17, which has created uncertainty about Bangladesh's exports of about $500 million worth of goods every year.
The latest ban on nine more products last Wednesday has created uncertainty about exports of another $150 million worth of goods a year. In total, there has been uncertainty about exports of $650 million worth of goods to India alone.
Apart from this, if there is no tariff agreement with the Trump administration, the country's export sector will face a major crisis.
Former Executive President of BKMEA Fazlee Shamim Ehsan said, “The complications with India regarding the export sector first started from our side. After that, they are increasing the sanctions one after another.”
He fears that even if large industries get a chance to adapt to the damage caused by India's export ban, small export-oriented industries may face a disaster. However, if there is no agreement on the tariffs imposed by the Trump administration, all types of export-oriented industries, both large and small, will face a major crisis.
(Translated by Tanvir Raihan)
