Bangladesh is seeking to expand its garment exports to Indonesia, with the two countries using the resumption of long-stalled trade negotiations as an opportunity to unlock what Dhaka sees as a high-potential apparel market. Although the two sides are competitors in the global textile and apparel industry, Dhaka believes bilateral trade could rise substantially if Indonesia reduces market access barriers.

Key Points

  • In 2025, Indonesia imported $48.41 million in garments from Bangladesh, including $26.26 million in non-knit items and $22.15 million in knit items.
  • Bangladesh's total exports to Indonesia stand at about $56 million, while its imports from Indonesia are about $3.5 billion, a significant trade deficit.
  • Four rounds of preferential trade agreement negotiations have been completed, but talks have been stalled since 2023 over duty-free access for Bangladeshi garments.

The figures were highlighted at a high-level meeting held at Bangladesh's Ministry of Commerce on October 7, 2026. Bangladesh's Commerce Minister Khandakar Abdul Muktadir and visiting Indonesian Deputy Foreign Minister Mohammad Anis Matta discussed bilateral trade. Bangladesh noted that it currently exports about $56 million worth of goods to Indonesia while importing about $3.5 billion from Indonesia over the same period, a clear trade imbalance; if market access barriers are removed, bilateral trade could grow significantly.

For Bangladesh's garment industry, Indonesia remains a relatively small export destination, but product-level data from the UN Comtrade database show that the existing market is already of some significance. In 2025, Indonesia imported $48.41 million in garments from Bangladesh, including $26.26 million in non-knit apparel and $22.15 million in knit apparel. By category, T-shirt imports totaled $8.44 million, sweaters, pullovers and vests $4.63 million, and men's knit shirts $2.07 million; on the woven side, men's suits, jackets and blazers reached $8.75 million, while women's suits, jackets, blazers and dresses totaled $7.18 million.

Bangladesh's textile footprint is not limited to finished garments. In 2025, Indonesia also imported $14.23 million in vegetable textile fibers, paper yarn and woven fabrics from Bangladesh, as well as $5.45 million in other made-up textiles.

Placing this scale within Bangladesh's overall garment export picture makes the opportunity clearer. In fiscal year 2025-26, Bangladesh earned $38.7 billion from garment exports, of which the EU accounted for $19.06 billion, the US $7.74 billion, the UK $4.39 billion, and non-traditional markets a combined $6.16 billion. In August 2026, Bangladesh's garment exports to non-traditional markets reached a record $642.93 million, indicating the growing importance of markets beyond traditional Western destinations.

However, although four rounds of preferential trade agreement negotiations have been completed, talks have been stalled since 2023, with the core sticking point being duty-free market access for Bangladeshi garment products. At the October 7 meeting, Indonesia acknowledged the competitive relationship between the two countries' textile and apparel industries but stressed that outstanding issues should be resolved through joint efforts. The two sides also discussed advancing the preferential trade agreement and a broader comprehensive economic partnership agreement. Indonesia proposed holding a ministerial meeting during an upcoming international trade exhibition in Indonesia to further accelerate commercial ties.

For Bangladesh, securing better market access to Indonesia is part of its strategy to diversify garment export destinations. As its least-developed-country graduation approaches, expanding market access in large Asian economies such as Indonesia can help hedge against future pressure on preferential treatment in traditional markets.

The current challenge is translating political-level discussions into commercially meaningful access. A trade agreement that lowers tariffs on Bangladeshi garments, simplifies procedures and improves market entry conditions could significantly change the economics of bilateral garment trade. With Bangladesh's total exports to Indonesia below $60 million while its import bill reaches $3.5 billion, the garment sector is clearly one of the most obvious areas for narrowing that gap. The next phase of trade negotiations concerns not only the bilateral balance but also whether Bangladesh can cultivate Indonesia into a larger garment export destination.

Source: Dhaka looks to deepen bilateral textile and apparel trade with Jakarta · Originally published 2026-10-08