Bangladesh’s ready-made garment (RMG) industry must undergo a fundamental transformation, from a volume-driven manufacturing hub to an innovation-led, sustainable and value-added sourcing destination, if it is to remain competitive after the country graduates from Least Developed Country (LDC) status.
This was the key message delivered by Md. Abdullah Hil Nakib, Deputy Managing Director of Team Group, during a panel discussion at the Bangladesh Denim Expo, where he outlined how his company is preparing for the post-LDC era and called for broader structural reforms across the industry.
Overdependence on RMG Is Bangladesh’s Biggest Risk
Nakib began with a candid observation that Bangladesh’s economy remains excessively dependent on a single export sector.
“More than 82 percent of our export earnings come from one industry. This is perhaps our biggest national risk,” he said, adding that policymakers should prioritize export diversification alongside strengthening the apparel sector.
Although speaking as an apparel manufacturer himself, he argued that reducing dependence on one sector is essential for ensuring long-term economic resilience.
LDC Graduation Will Challenge Competitiveness
Nakib warned that Bangladesh’s graduation from LDC status will significantly alter the country’s competitive position in global markets.
He explained that once duty-free access to the European Union expires, Bangladeshi apparel exports could face tariffs exceeding 12 percent, while competitors enjoying Free Trade Agreements may continue exporting at zero duty.
“This could create a competitiveness gap of nearly 24 percent, while our industry typically operates on profit margins of only 5 to 7 percent,” he noted.
Although appreciating the government’s ongoing efforts to negotiate trade agreements, he stressed that uncertainty remains until such arrangements are finalized.
Transparency, Traceability and Resilience Will Define Future Sourcing
According to Nakib, global buyers are rapidly changing their sourcing priorities.
Instead of evaluating suppliers solely on price and compliance, brands are increasingly focusing on traceability, transparency and long-term resilience throughout the supply chain.
Team Group, he said, has therefore embarked on a comprehensive transformation strategy to prepare for these evolving expectations.
Sustainability Investments Are Becoming Strategic Necessities
Nakib highlighted that Team Group has significantly expanded investments in sustainable manufacturing across its operations.
The company is focusing on circular economy initiatives, responsible water management, renewable energy integration and solar power adoption to strengthen its environmental performance.
He emphasized that sustainability is no longer merely a compliance requirement but a strategic business necessity for maintaining competitiveness in global markets.
Digitalization Will Shape the Future of ESG Compliance
A major pillar of Team Group’s strategy is digital transformation.
Nakib said future buyers will increasingly demand verified Environmental, Social and Governance (ESG) data and digital product traceability.
To prepare for these requirements, Team Group has established its own ESG dashboard and is investing heavily in digital systems capable of producing credible and auditable sustainability information.
The company is also preparing for the introduction of Digital Product Passports, which are expected to become an important requirement in European markets.
Human Capital Will Be the Real Competitive Advantage
Beyond technology, Nakib emphasized that people remain the industry’s most valuable asset.
He said Team Group is investing in employee training on digital systems, ESG governance and emerging European regulatory requirements to build internal capabilities for the future.
However, he also raised concerns over Bangladesh’s broader skills gap.
Despite producing large numbers of university graduates every year, industries still struggle to recruit adequately skilled professionals, forcing many companies to rely on foreign expertise.
He called for stronger collaboration between academia, government and industry to align education with industrial needs.
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The Industry Must Move Beyond OEM Manufacturing
Nakib argued that Bangladesh’s apparel sector should gradually transition from its traditional Original Equipment Manufacturing (OEM) model toward Original Design Manufacturing (ODM).
Instead of merely producing garments designed by foreign buyers, local companies should strengthen research and development, design capabilities and product innovation to generate greater value addition.
Looking further ahead, he suggested that Bangladeshi companies should aspire to build internationally recognized brands of their own.
“This is the path toward higher value creation and long-term competitiveness,” he said.
Collaboration Will Be Essential
Nakib stressed that no single company or institution can address the post-LDC challenges alone.
Government agencies, manufacturers, financial institutions, educational institutions and development partners must work together to build a stronger ecosystem capable of supporting the industry’s transformation.
He also pointed to Vietnam as an example of successful economic diversification and suggested Bangladesh should learn from similar models while strengthening both export and market diversification.
Innovation and Sustainability Must Lead the Next Phase
Concluding his remarks, Nakib reiterated that innovation, sustainability and circularity should become the central pillars of Bangladesh’s future apparel strategy.
As global sourcing requirements evolve, he believes the industry’s ability to embrace digitalization, invest in human capital and create higher-value products will determine whether Bangladesh remains a leading apparel exporter in the post-LDC era.
His message was clear: the next chapter of Bangladesh’s RMG success story will depend not on low-cost manufacturing alone, but on innovation, design capability, sustainability and strategic transformation.
