The Growth of Bangladesh’s Textile Industry in 2025

The textile industry in Bangladesh is a pillar of the nation’s economy and a global powerhouse in ready-made garments (RMG). As of 2025, Bangladesh remains the world’s second-largest apparel exporter after China. The sector employs over 4 million people, predominantly women, and contributes nearly 84% to the country’s total export earnings. This industry is not only crucial for economic development but also serves as a platform for social mobility and gender empowerment.

In recent years, strategic reforms, technological upgrades, and a focus on sustainability have driven the sector’s evolution. This article explores the growth drivers, challenges, global competitiveness, and future outlook of Bangladesh’s textile sector in 2025.

Key Growth Drivers in 2025

Several factors are propelling the expansion of the textile industry in Bangladesh:

• Favorable Trade Agreements: Bangladesh benefits from duty-free access to the EU, Canada, Japan, and other countries under the Generalized System of Preferences (GSP).
• Competitive Labor Costs: Despite recent wage hikes, labor remains more affordable than in other major textile-exporting nations.
• Vertical Integration: Many large manufacturers have adopted vertical setups, from spinning and dyeing to finishing and packaging.
• Government Incentives: Tax breaks, export subsidies, and low-interest loans are available for modernization and expansion projects.

Technological Advancements and Sustainability

The industry is embracing digital transformation and green practices:

• Smart factories with automation and AI for quality control
• Energy-efficient machinery to reduce carbon footprint
• LEED-certified green factories — Bangladesh has over 180 of them as of 2025
• Wastewater treatment and circular economy initiatives in fabric recycling

This transition not only improves cost-efficiency but also boosts Bangladesh’s brand image globally as a responsible producer.

Key Export Markets and Product Segments

The major destinations for Bangladesh’s textile exports include:

• European Union (mainly Germany, France, and Spain)
• United States
• United Kingdom
• Canada
• Japan and Australia

Popular product categories include T-shirts, denim, activewear, sweaters, and undergarments. Diversification into higher-value segments like performance textiles, children’s wear, and lingerie is also on the rise.

Workforce and Social Impact

The textile sector employs millions of workers, with around 60% being women. This has transformed the socio-economic landscape by improving household incomes and education levels, particularly in rural areas. Worker training programs and labor rights compliance are being emphasized to meet international standards.

Challenges Facing the Textile Sector

Despite growth, the textile industry in Bangladesh faces several challenges:

• Energy shortages and high electricity costs
• Delayed port operations and logistics bottlenecks
• Global competition from Vietnam, India, and Turkey
• Dependency on imported raw materials like cotton and chemicals

To remain competitive, stakeholders are investing in backward linkage industries and digital supply chain solutions.

Government Support and Policy Reforms

Recognizing the strategic importance of textiles, the government has introduced several measures:

• Establishment of Special Economic Zones (SEZs) dedicated to textiles
• Reduction in corporate tax rates for green factories
• Export performance-based cash incentives (up to 4%)
• Collaboration with international organizations for skills development

In addition, trade bodies like BGMEA and BKMEA are working closely with regulators to promote ethical manufacturing practices and sustainable development.

Investment Opportunities

Investors see immense potential in segments such as:

• Recycled yarn production
• Technical and smart fabrics
• Eco-friendly dyes and chemicals
• Automation and supply chain software

Foreign direct investment (FDI) in textiles is encouraged, especially in backward linkage industries to reduce import dependency.

Linking Textile to National Economic Goals

The textile industry in Bangladesh is aligned with national strategies like Digital Bangladesh and Vision 2041. It plays a key role in foreign exchange earnings, job creation, and GDP contribution. The government is actively linking this sector with initiatives such as microfinance and digital commerce platforms to ensure inclusive growth.

For example, microfinance institutions help small textile entrepreneurs expand operations. Learn more in our feature on microfinance in Bangladesh.

The textile industry in Bangladesh in 2025 is poised for sustained growth. With smart investments in technology, a focus on sustainability, and strong policy support, the industry is well-positioned to compete globally. For entrepreneurs, investors, and policymakers, textiles will remain a central pillar of Bangladesh’s economic journey.

FAQs: Textile Industry in Bangladesh

1. What percentage of exports come from textiles in Bangladesh?

Approximately 84% of Bangladesh’s total exports come from the textile and garment sector.

2. Which countries import garments from Bangladesh?

Top markets include the EU, USA, UK, Canada, and Japan.

3. How is the industry addressing environmental concerns?

By building green factories, adopting energy-efficient technologies, and treating wastewater.

4. What types of garments are most exported?

Denim, T-shirts, sweaters, activewear, and undergarments are top export items.

5. Is the sector growing in rural Bangladesh?

Yes, many factories are now located in semi-urban and rural zones, creating widespread employment.

6. Are there incentives for foreign investors?

Yes. SEZs, tax rebates, and infrastructure support are provided to attract foreign investment.