Bangladesh's garment exports are facing dual pressure from low-cost competition and shifting sourcing strategies. Multiple exporters told Bangladesh Pratidin that major European buyers such as H&M, Inditex, and Primark are moving some orders from Bangladesh to India and other countries. Reasons include uncertainty over Bangladesh's duty-free market access after its graduation from Least Developed Country (LDC) status, a potential trade agreement between India and the EU, Vietnam's trade advantages in the EU market, and rising production and energy costs in Bangladesh.

Key Points

  • Some exporters say a sourcing company serving Primark has recently begun opening two new offices in India.
  • A Clean Clothes Campaign report shows that H&M's average price for cotton T-shirts sourced from Bangladesh was 16% higher than Inditex's in 2021, but by 2025 the situation reversed, with Inditex paying about 6% more than H&M.
  • H&M's latest supplier list shows approximately 189 production units in Bangladesh, down from about 235 in 2020; industry sources say H&M sources about $3 billion to $3.5 billion worth of garments from Bangladesh annually.

Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said international buyers are diversifying their supply chains to reduce risk and typically do not rely entirely on a single country, as buyers pursue both quality and cost efficiency. He said determining sourcing strategies is an ongoing process for both brands and suppliers, and BGMEA is working to bring new global buyers to Bangladesh and encourage existing buyers to increase orders.

Traces of the shifting sourcing landscape are also reflected in specific prices and order structures. The Clean Clothes Campaign report notes that H&M is moving toward "nearshoring," with production of design-complex T-shirts being shifted to regions closer to consumer markets, while Bangladesh is still prioritized for basic and low-priced garments. The report says H&M, currently Bangladesh's largest garment buyer, has significantly reduced its orders for cotton T-shirts from Bangladesh, with local orders increasingly concentrated on lower-priced products. Price comparisons have also reversed: in 2021, H&M's average price for T-shirts sourced from Bangladesh was 16% higher than Inditex's, but by 2025 the situation flipped, with Inditex paying about 6% more for T-shirts than H&M.

Responding to questions about H&M's sourcing from Bangladesh and the country's share of its total sourcing, H&M media relations officer Pernille Skånvig Skønnov said the company regularly adjusts its supply chain strategy to adapt to environmental changes and consumer demand. She said H&M is reducing the number of suppliers across different sourcing markets and instead partnering with more strategic partners to ensure consistency in product quality and sustainable production while giving suppliers more stable orders, and Bangladesh remains an important sourcing market. She noted that H&M has been present in Bangladesh for forty years, and its long-term cooperation with local manufacturers is an important part of its global operations.

Notably, H&M's latest published supplier list shows approximately 189 Bangladeshi production units making garments for the company, compared with about 235 in the 2020 list. Industry sources say H&M sources about $3 billion to $3.5 billion worth of garments from Bangladesh annually, so despite the decline in the number of suppliers, Bangladesh remains one of H&M's major production bases.

Against this backdrop, Bangladesh's garment industry must both defend its market share in low-priced basic garments and expand its capacity for higher-value-added, more complex products. As global brands strengthen supply chain resilience, they are placing greater emphasis on geographic proximity and stable energy supply, which will continue to affect the pace and structure of their orders to Bangladesh.

Source: Low-cost competition hampers Bangladesh's garment exports | | Bangladesh Pratidin · Originally published on 2026-10-02