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Bangladesh’s Garment Sector Struggles Amid US-Israel War on Iran
(MENAFN) The once-constant rhythm of production across Bangladesh’s expansive garment industry is beginning to slow, as a distant geopolitical crisis starts to weigh heavily on one of the country’s most vital economic sectors.
The ongoing US-Israel conflict with Iran has unsettled global shipping lanes, destabilized energy markets, and introduced fresh uncertainty into an industry that underpins Bangladesh’s export-driven economy.
The ready-made garment sector—responsible for more than 80% of the nation’s export revenue, exceeding $48 billion last year, and employing around 4 million people—was already facing economic pressure before the latest escalation. The current situation now risks worsening those challenges.
Trade figures indicate a significant downturn. Apparel exports to the European Union, Bangladesh’s largest market, dropped to $1.55 billion in January 2026, reflecting a steep 25.25% decrease compared to the same period the previous year.
At the same time, export volumes declined by 17.49%, while average unit prices fell by 9.41%, highlighting what analysts describe as a “double blow” driven by weakening demand alongside declining prices amid regional instability.
This growing vulnerability has intensified concerns among industry leaders. A senior official from the Bangladesh Garment Manufacturers and Exporters Association warned: “Now, with the Iran conflict, there are fears that exports will drop further.”
The organization’s president echoed similar concerns, stating that the Iran war has “emerged as a fresh threat to the sector by destabilizing both logistics and energy costs.”
Much of the risk stems from geography as well as economics. The Gulf region serves as a critical corridor for global maritime trade between Asia and Europe. Any disruption—whether due to heightened security concerns, rising insurance costs, or the need to reroute vessels—can quickly impact Bangladesh’s export supply chains.
The ongoing US-Israel conflict with Iran has unsettled global shipping lanes, destabilized energy markets, and introduced fresh uncertainty into an industry that underpins Bangladesh’s export-driven economy.
The ready-made garment sector—responsible for more than 80% of the nation’s export revenue, exceeding $48 billion last year, and employing around 4 million people—was already facing economic pressure before the latest escalation. The current situation now risks worsening those challenges.
Trade figures indicate a significant downturn. Apparel exports to the European Union, Bangladesh’s largest market, dropped to $1.55 billion in January 2026, reflecting a steep 25.25% decrease compared to the same period the previous year.
At the same time, export volumes declined by 17.49%, while average unit prices fell by 9.41%, highlighting what analysts describe as a “double blow” driven by weakening demand alongside declining prices amid regional instability.
This growing vulnerability has intensified concerns among industry leaders. A senior official from the Bangladesh Garment Manufacturers and Exporters Association warned: “Now, with the Iran conflict, there are fears that exports will drop further.”
The organization’s president echoed similar concerns, stating that the Iran war has “emerged as a fresh threat to the sector by destabilizing both logistics and energy costs.”
Much of the risk stems from geography as well as economics. The Gulf region serves as a critical corridor for global maritime trade between Asia and Europe. Any disruption—whether due to heightened security concerns, rising insurance costs, or the need to reroute vessels—can quickly impact Bangladesh’s export supply chains.
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