Understanding Internal and External Issues in the Garments Export Process from Bangladesh

Introduction

Bangladesh is the second-largest exporter of ready-made garments (RMG) in the world, contributing nearly 85% of the country’s total exports. While the sector has seen remarkable growth, it is also riddled with both internal and external challenges that hinder its smooth operation and long-term sustainability.

In this blog, we’ll dive into the key internal and external issues affecting the garments export process in Bangladesh, offering a comprehensive understanding for entrepreneurs, stakeholders, and policymakers alike.

 

Internal Issues in the Garments Export Process

Internal issues are challenges that originate within the country or factory operations that directly impact productivity, quality, and timely delivery.

1. Inefficient Production Planning and Control

• Many factories lack advanced ERP systems or production tracking tools.
• Poor coordination between departments (cutting, sewing, finishing) leads to delays.
• Unplanned machine breakdowns and last-minute order changes disrupt the workflow.

2. Low Productivity and Skill Gaps

• The industry heavily relies on manual labor with limited skill development.
• Lack of training and modern sewing techniques result in lower output per worker.
• Operator absenteeism and high labor turnover also affect consistency.

3. Quality Control Challenges

• Inconsistent quality checks lead to increased rejection rates by foreign buyers.
• Improper fabric inspection, incorrect labeling, and defective stitching are common.
• Many factories don’t follow international quality standards like ISO 9001.

4. Compliance and Safety Concerns

• Not all factories maintain strict compliance with labor laws or fire safety standards.
• Non-compliance can lead to order cancellations from international brands.
• Pressure to meet tight deadlines sometimes forces overtime beyond legal limits.

5. Logistics and Infrastructure Bottlenecks

• Port congestion at Chattogram delays export shipments.
• Poor road conditions increase lead times from factory to port.
• Lack of cold storage or modern warehousing facilities adds to the logistical burden.

6. Limited Technological Adoption

• Many SMEs still use outdated machinery.
• Lack of digital monitoring tools affects order tracking and efficiency.
• Slow adaptation of automation in cutting, sewing, and inventory management.

 

External Issues in the Garments Export Process

External issues are factors beyond the direct control of factories or domestic policies, often influenced by global markets, international politics, or economic trends.

1. Fluctuating Raw Material Prices

• Bangladesh imports most of its raw materials (fabrics, dyes, accessories).
• Any global disruption (like war, oil price hikes, or trade bans) affects input costs.
• Price volatility reduces profit margins and competitiveness.

2. Geopolitical and Trade Barriers

• Political tensions between sourcing and destination countries can impose tariffs or restrictions.
• The removal or changes in trade benefits like GSP (Generalized System of Preferences) create uncertainty.
• Brexit and U.S.-China trade wars indirectly impact Bangladesh’s export flow.

3. High Dependency on a Few Markets

• Over 60% of Bangladesh’s garment exports go to the EU and U.S.
• Any demand reduction or economic slowdown in these regions severely affects export orders.
• Limited market diversification makes the industry vulnerable to global shocks.

4. Intense Global Competition

• Competing countries like Vietnam, India, Cambodia, and Turkey offer cheaper or faster alternatives.
• Advanced production systems and government support in these countries make them more attractive to buyers.
• Rising labor costs in Bangladesh are reducing its competitive edge.

5. Changing Buyer Expectations

• Buyers now demand sustainable, eco-friendly, and ethically produced garments.
• Pressure to comply with sustainability certifications (OEKO-TEX, GOTS, etc.) adds cost and complexity.
• Shorter lead times and faster fashion trends demand flexibility that many factories struggle to offer.

6. Currency Exchange Rate Instability

• Frequent fluctuations in the USD-BDT exchange rate impact pricing and profitability.
• Overvaluation or undervaluation of BDT affects competitiveness in the global market.
• Payment delays and LC (Letter of Credit) complications further complicate cash flow.

Strategies to Overcome These Challenges

While the issues are many, Bangladesh has immense potential to overcome them by adopting strategic reforms:

✅ Investing in Automation and Training

• Adopting modern machinery and AI tools can increase productivity.
• Technical and soft skills training for workers and mid-level managers.

✅ Improving Supply Chain and Infrastructure

• Upgrading roads, logistics systems, and warehouse management.
• Streamlining customs procedures to ease port operations.

✅ Expanding Market Access

• Exploring emerging markets like Latin America, Africa, and Russia.
• Signing bilateral trade agreements to reduce tariff burdens.

✅ Focus on Sustainability and Compliance

• Adopting eco-friendly production processes.
• Complying with international labor and quality standards.

✅ Government Support and Policy Reform

• Incentivizing export diversification and SME development.
• Simplifying financial access through export loans and subsidies.

 

Conclusion

Bangladesh’s garments sector is a vital pillar of its economy, but it stands at a crossroads. By addressing both internal inefficiencies and external dependencies, the industry can build long-term resilience and continue to thrive in the competitive global apparel market.

Sustainable innovation, proactive policy, and strong leadership from both public and private sectors will be key in transforming challenges into opportunities.