Bangladesh's garment exports to Russia fell to $257.26 million in FY2025-26, down about 61% from $665.31 million in FY2020-21, ending a decade-long expansion expectation among local suppliers of hitting $1 billion in annual sales. Over the same period, Russian buyers' unpaid dues to Bangladeshi garment firms have exceeded $1 billion. Beyond Mitumba, these figures also remind the entire used-clothing and textile-apparel export chain: cross-border settlement risk is directly rewriting order flows.

Key Points

  • Garment exports to Russia fell from $665.31 million in FY2020-21 to $257.26 million in FY2025-26, a drop of about 61%
  • Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said total unpaid dues exceed $1 billion, with small and medium knit suppliers each owed $3 million to $4 million
  • Factories in Dhaka and Chattogram are turning to Asian buyers such as Japan, India, South Korea and Turkey,

Broken Settlement Channels Are the Core Problem

After the Ukraine crisis escalated in February 2022, Western sanctions excluded major Russian banks from the SWIFT international payment messaging system. Dhaka exporters could no longer collect payments through normal interbank channels, and transactions were forced into complicated three-country clearing mechanisms. Readymade garments account for more than 95% of Bangladesh's total shipments to Russia, with knitwear and sweaters at the top.

Unpaid bills are not limited to direct orders. According to local exporters, indirect shipments handled through European intermediaries such as Polish retail group LPP have also seen payments stall. Factory owners face another risk: if a transaction involves sanctioned Russian entities or non-compliant payment channels, it could trigger secondary sanctions or international blacklisting.

"I stopped exporting to Russia because of payment problems," said Rajiv Chowdhury, managing director of local garment exporter Young4ever Textiles. "Before the war I exported more than $1 million worth of garments to Russia every year."

Direct Shipping Halted, Transshipment Raises Costs

Direct sea freight to Russian ports has come to a complete halt. Manufacturers have switched to land and sea routes through Poland, Finland, Belarus and Germany, driving up transit times, border handling fees and third-party freight forwarder costs.

Attempts to settle in alternative currencies such as the Chinese yuan or Turkish lira have created new liability items for suppliers. Small and medium factories generally report that such arrangements are no cheaper or less troublesome than the original dollar channel.

Capacity Reallocated to Asian Markets

Factory owners in Dhaka and Chattogram prefer not to bear the credit risk sitting on their books, and are shifting production lines toward established and emerging buyers in Japan, India, South Korea and Turkey. This pivot makes competition in Asian consumer markets even fiercer—Bangladesh needs to find buyers that can absorb large volumes to fill the lost European orders.

Exporters that built specialized heavy knitwear capacity for cold-climate markets now have only two paths: retool equipment to make year-round collections, or compete on price within the narrower margins of East Asian markets.

A Historical Line from Tariffs to Sanctions

Bangladesh's direct garment trade with Russia began after 2011. At that time, Turkey imposed a 17.5% safeguard tariff on Bangladeshi garments to protect its domestic producers. Before that, Bangladeshi factories sent basic garments to Turkish intermediaries, who rebranded them and re-exported to Moscow. Turkey's tariff forced Dhaka suppliers to bypass Istanbul and establish direct contact with Russian retail buyers, and exports rose from negligible levels to $638.3 million in FY2021-22.

Trade bodies such as the Bangladesh Garment Manufacturers and Exporters Association believe Russia remains a viable long-term export destination once the geopolitical environment returns to normal. Association president Mahmud Hasan Khan said factory groups will focus on expanding market share in Asian retail channels while monitoring progress on settling Moscow's outstanding payments.

For the secondhand clothing and textile export industry, the significance of this case is that payment channels and sanctions risk have become trade variables on par with tariffs, and any supply system dependent on a single destination market can shrink by more than half within a few years when its settlement links are severed.

Source: Bangladesh Garment Shipments to Russia Drop to $257 Million · Originally published 2026-10-06