China’s clothing exports to Europe are increasing, while those of Bangladesh are declining. This shift is putting pressure on Bangladesh’s garment sector, which depends heavily on the EU market.
In the first quarter of the current 2025–26 fiscal year (July–September), Bangladesh exported ready-made garments worth $4.746 billion. That compares with $4.579 billion in the same period a year earlier, which was the total national apparel exports to the European Union alone. However, the share of total national apparel exports going to the EU slipped to about 47% from 48.13% a year earlier, according to industry data.
Entrepreneurs say the three-month dip in EU-bound growth is an early warning for a sector that supplies roughly half its output to European buyers. The EU remains Bangladesh’s most important market, where exports continue to benefit from preferential access under the Generalized System of Preferences (GSP). Even so, manufacturers fear the sector could face a squeeze if a competing supplier consolidates dominance there.
Mohiuddin Rubel, a former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), stated that while the EU is Bangladesh’s largest destination, China is also a significant supplier to the bloc. He said Beijing has shifted focus to Europe as it faces higher tariffs in the United States, a pivot that is cutting into Bangladesh’s growth momentum in the EU.
Md. Fazlul Hoque, the former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), attributed the softer EU demand to broader economic weakness in the EU. “The European market is functioning, but not strongly,” he said, adding that if China or India confront higher U.S. tariffs, they may intensify efforts in Europe—placing Bangladesh at a competitive disadvantage in that market, even as such shifts could create relative advantages for Bangladesh in the United States.
Industry leaders caution that a temporary slowdown could turn into a deeper setback if one supplier achieves a dominant position in the EU. They also point out that, through much of this year, Bangladesh’s EU growth has moderated while China’s has accelerated. In January–July, Bangladesh’s apparel exports posted year-on-year increase of 16.45%, compared with China’s 23%. The gap widened in July, with Bangladesh's growth at 7.05% versus China's 24.85%, based on sector tallies.
China’s pivot has been spurred by steeper US tariffs, prompting suppliers to seek alternative markets. Bangladesh, meanwhile, initially faced a proposed 37% US tariff on garments before Washington reduced the rate to 30% and then to 20%. Although that outcome offers some relief, exporters say the benefit has yet to be reflected in shipment data.
Despite the near-term pressure in Europe, many Bangladeshi manufacturers view the slowdown as a cyclical phenomenon. “Business has its ups and downs—this will correct,” said Hoque, reflecting a broader sentiment that EU demand could recover as macroeconomic conditions improve.
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