Bangladesh's Apparel Dominance Persists Despite Diversification Efforts
Bangladesh, renowned globally for its apparel exports, is poised to graduate from the least developed countries bloc in 2026. However, the dominance of apparel in its exports remains unchallenged, with experts advocating for diversification to tap into sectors like leather, pharmaceuticals, and light engineering. International projects and local initiatives aim to bolster these sectors and reduce apparel's dominance.
The Asian Development Bank is supporting a project centered on skills and employment in the light engineering sector, indirectly aiding export diversification. Meanwhile, a World Bank project since 2017 targets leather, footwear, light engineering, and plastic goods, aiming to generate 90,000 jobs and enhance competitiveness. Despite these efforts, apparel still dominated exports in 2024, contributing about 85% to the $50 billion earnings.
Experts underscore several barriers to diversification, including lack of technology, skilled resources, inefficient logistics, poor market intelligence, and low foreign direct investment. Currently, foreign direct investment stands at less than 1.5% of GDP, hindering technology transfer and export diversification. The government is urged to address ease of doing business, port efficiencies, transport logistics, and skilled human resources to effectively diversify exports.
While Bangladesh's graduation from the least developed countries bloc signals progress, the dominance of apparel in its exports persists. International projects and local efforts are underway to diversify exports, but tackling key challenges is crucial for a successful transition. The government's focus on improving ease of doing business, logistics, and human resources will be pivotal in unlocking the export potential of sectors like leather, pharmaceuticals, and light engineering.
