The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has called on the interim government to reconsider a set of recent policy decisions, warning that the readymade garment (RMG) industry is facing one of the most critical periods in its history.
At an emergency press conference in Dhaka on Tuesday, BGMEA President Mahmud Hasan Khan said the recently approved Bangladesh Labour (Amendment) Ordinance 2025, the increase in Chattogram Port tariffs, and the timeline for graduation from the Least Developed Country (LDC) category have together created serious challenges for the balance, investment and competitiveness of the manufacturing sector.
He said that after extensive discussions at the Tripartite Consultation Council (TCC) and its working committee, a balanced proposal had been reached regarding trade union formation—allowing a union to be formed in factories employing 50 to 500 workers with the consent of at least 50 workers. However, the advisory council later changed the provision without consultation, setting the range at 20–300 workers.
“If a union can be formed with just 20 workers, outsiders may also become involved, leading to internal conflict, instability and disruption in production,” he warned.
Citing global standards, he said India requires the consent of at least 10% of workers or a minimum of 100 workers to form a union, while Pakistan requires 20%. “Compared to this, Bangladesh’s proposed framework will be the weakest and most unstable in South Asia,” he said.
The BGMEA president also expressed concern over the pension framework. He said the TCC had earlier decided that a company could choose either the Future Fund or Progoti scheme. But under the new approval, workers can participate in both schemes simultaneously, forcing employers to maintain two separate financial mechanisms.
“This will create administrative complications, increase expenses and lead to disorder in fund management,” he said.
He added that other countries maintain single systems—India has the Employee Provident Fund (EPF), Pakistan a single Social Security Scheme, Vietnam a National Pension and Insurance System, and Sri Lanka the EPF. “Where others follow simpler systems, a dual mechanism in Bangladesh will only increase confusion and costs,” he said.
He pointed out the inclusion of “officers and employees” in the definition of “worker” as another major risk. “This will blur the line between management and workers, creating confusion in responsibility and decision-making,” he said.
Criticising the process by which decisions were changed, he said, “Many of the decisions unanimously adopted in the working committee were altered by the advisory council without discussion. This will erode trust among workers, entrepreneurs and the government.”
He warned that competing countries have already adopted investment-friendly reforms in technology, infrastructure and labour laws. “If such irrational laws are implemented here, foreign investment will decline, exports will fall and instability will rise across industries,” he said.
“The law must be balanced and realistic for both workers and employers,” he said, calling for a review of the Bangladesh Labour (Amendment) Ordinance 2025 to ensure it supports sustainable growth rather than harming competitiveness.
Mahmud Hasan Khan said the RMG sector is already under immense pressure due to export duties in the US market, high bank interest rates, a 56% wage increase since December 2024, a 9% annual increment, increased gas and diesel prices, and a 60% cut in export incentives since 2023—all of which have significantly raised operating costs.
“On top of this, the recent 41% increase in service charges at Chattogram Port is a one-sided and irrational decision,” he said.
He noted that the Ministry of Shipping claims port tariffs have not been raised in 40 years. “But Chattogram Port collects its fees in US dollars. When in 1986 the exchange rate was Tk 29.89 per dollar, it is now over Tk 122. Due to this depreciation, entrepreneurs are already paying 308% more in local currency,” he said.
He added that Chattogram Port, being a profitable state-run institution, should not aim to make profits. “Compared to ports in our competing countries, it is both costlier and less efficient,” he said, citing a recent World Bank report that ranked Chattogram 357th out of 403 container ports globally.
Regarding LDC graduation, the BGMEA president said, “Bangladesh is on its way to graduating from the LDC category. But without adequate preparation, we will fall behind in global competition. Therefore, we urge the government to defer the LDC graduation timeline by at least three years.”
“To maintain competitiveness, the government must ensure a business-friendly environment, resolve the gas crisis, simplify customs and NBR processes, improve infrastructure and logistics, and make low-cost financing available,” he said.
He acknowledged the interim government’s efforts since August 5 to stabilise the financial sector and bring reforms. “We sincerely appreciate those efforts,” he said. “However, labour law amendments, LDC graduation and port tariff hikes are long-term policy matters whose effects will be felt by future generations.”
Finally, he urged the Chief Adviser Muhammad Yunus and the Advisory Council to take prompt, positive and practical measures considering the realities of the manufacturing sector and global competition to strengthen the country’s economy.
