Bangladesh’s ready-made garment (RMG) industry must urgently move beyond its traditional reliance on low-cost cotton products and prepare for a future driven by competitiveness, product diversification, and value addition, according to Sharif Zahir, Chairman of Ananta Group and Chairman of United Commercial Bank PLC.
Speaking at a panel discussion during Bangladesh Denim Expo, Jahir emphasized that while trade agreements and government negotiations remain important, the private sector must prepare to compete globally regardless of preferential market access.
“We have to be ready for a situation where, even without GSP or duty-free facilities, Bangladesh can still compete successfully,” he said.
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Price Pressure Reshaping the Industry
Zahir pointed out that the global fast-fashion business model has fundamentally changed sourcing dynamics, with buyers continuously demanding lower prices while expecting higher efficiency from suppliers.
According to him, apparel manufacturers in Bangladesh have witnessed steady increases in wages, utility costs, and operational expenses over the years, yet export prices have continued to decline.
“The prices we received ten years ago are often higher than what we receive today,” he observed, adding that global brands and retailers themselves face intense shareholder pressure to increase profits annually, leaving little room for price increases.
This has encouraged factories to expand production capacity rather than diversify products, resulting in heavy dependence on a limited range of cotton-based garments.
Diversification Is No Longer Optional
Zahir argued that Bangladesh can no longer rely on volume growth alone and must instead move up the value chain.
He urged manufacturers to invest in higher-value segments such as formal wear, suits, man-made fibre (MMF) products, and activewear, where stronger margins still exist and global demand continues to grow.
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“If we can excel in MMF-based products and activewear, we may still remain competitive even after additional duties are imposed,” he said.
He stressed that product diversification, innovation, and technological upgrading will be essential for sustaining export growth after the country’s graduation from Least Developed Country (LDC) status.
Compliance Must Become a Competitive Advantage
Beyond product diversification, Jahir highlighted Bangladesh’s significant progress in workplace safety and compliance.
He noted that the industry has invested billions of dollars following international safety initiatives, making Bangladesh one of the world’s most compliant sourcing destinations.
The next objective, he suggested, is to make the country indispensable to global brands by ensuring high standards in labor rights, sustainability, and responsible sourcing while avoiding reputational risks.
Banking Sector Ready to Support Green Investments
Responding from his perspective as chairman of a leading commercial bank, Jahir expressed confidence that Bangladesh’s financial sector is prepared to support the industry’s modernization.
He noted that Bangladesh’s banking system already provides extensive trade financing through back-to-back letters of credit, a mechanism that significantly supports manufacturers’ working capital requirements.
In addition, he highlighted the availability of green financing facilities, subsidized lending programs, and long-term refinancing schemes introduced by Bangladesh Bank to encourage sustainable industrial investments.
“There is plenty of financing available for exporters who want to invest in modernization and green technologies,” he remarked.
Preparing for a More Competitive Future
While acknowledging that financing support exists, Zahir warned that competition will become increasingly difficult after LDC graduation.
He urged exporters to reinvest earnings into upgrading factories, improving technology, and expanding into new product categories to remain globally competitive.
He also cautioned against excessive dependence on a narrow range of export products, noting that future trade arrangements may impose limits on duty-free imports within specific product categories.
“The dependency on one product has to change. Along with backward integration, product diversification will be essential. Otherwise, there is no alternative,” Zahir concluded.
His remarks underscored a broader message for Bangladesh’s apparel sector that is the future success will depend not on preferential market access alone, but on innovation, sustainability, competitiveness, and the ability to climb higher in the global value chain.
