RMG sees 10% growth in new markets

Bangladesh's ready-made garment exports to new markets witnessed robust growth of 10%, reaching a total of $7.70 billion in July-April of FY24, compared to $7 billion in the equivalent period of the previous fiscal year.

Among the major newly explored markets, shipment to Japan rose to $1.4 billion, reflecting a 6.14% increase. While the exports to Australia and South Korea showed substantial rises of 17.18% and 14.73%, respectively.

Bangladesh's RMG exports to the Middle East markets also showcased notable growth. Exports to Saudi Arabia increased by 58%, while Turkey and the UAE recorded growth rates of 54% and 41.96%, respectively.

According to Export Promotion Bureau (EPB) data, overall exports to global markets reached an impressive total of $40.49 billion, compared to $38.57 billion in the first ten months of FY23.

SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The Business Standard, "Thanks to government policy support, especially cash incentives, the industry has been enjoying growth in new market exports since 2009. These new market exports have provided great support to the industry in maintaining growth during tough times, such as the slowdown in traditional markets like the EU, the USA, the UK, and Canada."

"We have already achieved double-digit growth in these new markets," he said. "Our market share in the new markets has reached close to 20%. If the government continues its policy support, especially cash incentives, until 2029, our market share in new markets will be higher, which will help diversify our markets."

Kochi emphasised that Japan, Australia, South Korea, China, Russia, and other Middle East markets have the potential for further growth. He urged the government to introduce alternative incentives for apparel exports, similar to those provided by competitor countries, to enhance competitiveness.

The BGMEA president noted that India has been providing various incentives to its exporters, although the country graduated from LDC status in 2007.

Bangladesh's RMG sector exhibited an overall growth of 4.97% during the fiscal 2023-24. According to EPB data, exports to the EU totaled $19.90 billion, with 3.66% growth, driven by strong performances in several key EU markets.

RMG exports to Spain, France, the Netherlands, Poland, and Denmark grew by 6.07%, 3.42%, 17.51%, 20.65%, and 32%, respectively.

However, not all EU markets experienced growth. Exports to Germany, the largest EU market, declined by 9.40% to $5.01 billion compared to July-April 2022-23. Similarly, apparel exports to Italy decreased by 2.45%, according to EPB data.

Outside the EU, RMG exports to the USA declined by 1.90% to $6.81 billion in the first 10 months of the fiscal 2023-24. Meanwhile, apparel exports from Bangladesh to the UK and Canada reached $4.8 billion and $1.26 million, respectively.

Speaking about the RMG sector, the BGMEA president said, "When our Europe-America market began to recover post-Covid, our business slowed down again due to the Ukraine-Russia war. Our exports have suffered to some extent, but we have still managed to maintain growth compared to other competing countries."

However, apparel exports to neighbouring India declined by 22.44%. This decline has been noticeable since August 2023.