Quality Inspection Management (QIMA), a leading provider of supply chain compliance solutions, has revealed a troubling rise in labor violations within Bangladesh’s readymade garment factories, with critical issues related to working hours and wages nearly doubling from 17 per cent in 2023 to 33 per cent in 2024.
QIMA audit findings, published on Friday, underscored the severity of the issue, revealing that critical violations related to working hours and wages were found in one-third of Bangladeshi factories inspected in 2024—significantly higher than both the previous year and the region’s 2024 average of 26 per cent.
The report titled ‘Q1 2025 BAROMETER: Global Supply Chains Prepare for Uncertainty as New Trade Wars Loom’ said despite a challenging year marked by protests, factory shutdowns, and extreme weather, Bangladesh saw double-digit growth in 2024, underscoring its continued significance as a key supplier hub for Western brands.
It said that South Asian sourcing hubs remained vital to the procurement strategies of US-based and European buyers.
Despite mounting disruptions, global supply chains showed resilience in 2024, sustained by stable demand in Western markets that helped trade recover from the 2023 downturn, though the sourcing landscape now faces new uncertainties with the potential rise of tariffs and protectionism in 2025, QIMA report said.
It said that the anticipated US tariffs and ongoing disruptions have forced businesses to diversify their sourcing strategies.
QIMA data showed that China remained a key sourcing partner in 2024, with a 29 per cent year-over-year increase in inspection and audit demand across all major consumer goods categories.
Demand from EU-based buyers rose by 22 per cent, while American businesses increased by 17 per cent, indicating that despite ongoing supply chain shifts, Western brands still view China as a reliable fallback for manufacturing capacity, the report read.
Some Western brands and retailers have been stockpiling made-in-China goods to build inventory buffers and minimize disruptions in case of sourcing re-routing, while others are taking a wait-and-see approach, acknowledging that replacing China as a sourcing hub won’t happen quickly, according to the report.
‘The next stage of the US/China trade war – which is highly likely, given the current geopolitical climate – is expected to be a major factor in how global supply chains approach China sourcing in 2025,’ the report opined.
Vietnam continued to be a major beneficiary of the ongoing sourcing shifts from China, with QIMA data showing a 30 per cent year-on-year increase in demand for inspections and audits in 2024, including a 26 per cent rise from US- and EU-based buyers.
With expected higher US tariffs on Chinese goods, Vietnam could gain an even greater advantage in 2025, the report said.
The report also indicated that Bangladesh could benefit from the shift away from China, as the US might see Vietnam as a ‘middleman’ for Chinese businesses, which could put Vietnam at risk of tariffs.
QIMA data showed a 25 per cent year-on-year increase in demand for inspections and audits in India, including a 25 per cent growth among Western buyers.
Meanwhile, Pakistan and Sri Lanka also saw a rise in manufacturing orders in 2024 as their economies continued to stabilize after recent economic crises.