Over 200 garment factories, most of them affiliated with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), shut down in 2025, eliminating around 10 lakh jobs, according to sector insiders.
They said a combination of global and domestic shocks dragged export growth well below last year’s pace and forced hundreds of factories out of operation.
“A total of 216 garment factories, including 147 linked to the BGMEA, shut down this year,” Sparrow Group Managing Director Shovon Islam, a former director of the BGMEA, told TIMES of Bangladesh.
Most of the closures were driven by mounting financial pressure and shrinking orders amid United States tariffs and heightened global uncertainty, he said.
“About 35 to 40 of the factories were owned by entrepreneurs aligned with the Awami League, and nearly four lakh workers lost their jobs there. The list includes large factories belonging to Nasa Group, Beximco Group and Jenesis Group,” he added.
Meanwhile, only 79 new factories came into operation and became BGMEA members, creating employment for roughly 1.30 lakh workers.
While the order slowdown hurt a large number of factories, some kept securing orders at negotiated lower prices to continue operations and pay workers, according to BGMEA.
After posting a robust 7.23% year-on-year growth to $38.48 billion in 2024, export growth in the sector decelerated sharply in 2025, reflecting a clear loss of momentum.
In the first 11 months of the year, exports grew only 2.53% year on year to $35.59 billion, compared with 6.23% growth over the same period in the turbulent year of 2024, industry data show.
Even with a possible pickup in December, full-year export growth is unlikely to match last year’s outcome.
The slowdown quickly translated into factory closures and job losses.
Currently, around 1,700 ready-made garment factories affiliated with the BGMEA are in operation across the country. Besides these, another 600 factories are also engaged in production nationwide.
Stakeholders say alongside global challenges, domestic disruptions further compounded the crisis as political instability disrupted trade flows and labour unrest, including road blockades and factory shutdowns, repeatedly interrupted production and delayed shipments.
The situation worsened with the unprecedented complete shutdown of a customs house, a rare global occurrence that had severe consequences for an economy heavily dependent on garment exports.
Export earnings also took a hit after a major fire at an airport cargo facility destroyed garment shipments worth around $1 billion, exporters said.
At the same time, the withdrawal of export incentives, persistently high inflation, elevated interest rates and uncertainty in energy supply pushed up production costs, steadily eroding Bangladesh’s price competitiveness.
From the global side, BGMEA senior vice-president Inamul Haq Khan said that while 2025 has been challenging, it is not the most difficult year the apparel sector has faced.
He said the most painful period was 2020, when the Covid-19 pandemic disrupted global supply chains and demand, followed by 2022, when the Russia–Ukraine war triggered sharp rises in energy prices, inflation and logistics disruptions.
Ongoing geopolitical tensions, including conflicts in the Middle East, along with the impact of higher US tariffs, further reduced global demand and increased trade uncertainty this year, he added.
In the previous crises, the government was supportive of exporters, unlike this time when wage pressure, tighter loan repayment policy, and fewer incentives made it harder for exporters to weather the crisis, said Shovon Islam.
Looking beyond immediate shocks, BGMEA former director Mohiuddin Rubel said deeper structural challenges are becoming more pronounced as rising competition in European markets squeezes Bangladesh’s position.
Also, the weak performance in non-traditional markets exposes the risks of overreliance on the European Union and the United States, Rubel added.
Limited product diversification remains a major vulnerability compared to competitors such as Vietnam, which are moving faster toward higher value-added products, he said.
Meanwhile, recent amendments to labour laws aimed at strengthening workers’ rights and aligning with international standards have increased compliance costs and operational risks for factory owners, said BKMEA President Mohammad Hatem.
He said identifying the root causes of factory closures, strengthening financial-sector support and ensuring effective monitoring are critical so that new factories contribute to sustainable industrial growth.
Industry insiders said Bangladesh’s future competitiveness will depend on closing infrastructure gaps, easing internal bottlenecks and moving up the value chain through better logistics, political and social stability, factory efficiency and greater investment in research, innovation and marketing.
Despite the current headwinds, Bangladesh retains strong fundamentals in scale, production capacity and long-standing buyer relationships, and with coordinated action by the government and industry, export momentum could still be regained, they said.
