Bangladesh, the second-largest apparel exporter globally, has enhanced its competitiveness in garment manufacturing, particularly in bulk orders of basic apparel, due to low labour costs, affordable inputs, and duty-free access to key markets beyond the United States, positioning it as a vital player in the global fashion industry, according to a latest report.

The US International Trade Commission on Tuesday released the report titled ‘Apparel: Export Competitiveness of Certain Foreign Suppliers to the United States (Inv No 332-602).

In a letter to the US International Trade Commission on December 19, 2023, US trade representative acknowledged recent disruptions and emphasised the need for the current administration to understand these changes and the evolving competitiveness of leading foreign apparel suppliers to the United States.

The USITC, an independent, nonpartisan federal agency, examined the export competitiveness of the apparel industries in Bangladesh, Cambodia, India, Indonesia and Pakistan, which together accounted for 27.0 per cent of the total US apparel imports, valued at $79.3 billion in 2023.

The report highlighted four key factors influencing a country’s apparel export competitiveness: costs related to materials, labour, capital and logistics; product differentiation; reliability of supply; and social and environmental responsibility.

It also discussed how these elements contributed to becoming a preferred sourcing base for the US fashion companies.

The report highlighted that Bangladesh, contributing 9.0 per cent of US apparel imports – the highest among the countries investigated – stands as the second-largest apparel exporter globally, with significant capabilities in manufacturing and a focus on bulk orders of basic garments.

‘Bangladesh competes as a low-cost supplier to the US market, benefiting from low labour costs and relatively low input expenses driven by vertical integration, economies of scale, industry subsidies and duty-free access to substantial markets beyond the US,’ the report said.

Furthermore, the size and experience of Bangladesh’s apparel industry enable it to offer a diverse range of products in both large and small quantities for US buyers, complemented by a skilled workforce, it said.

The report mentioned significant changes in the market shares of major US suppliers between 2013 and 2023.

It pointed out that while the share of imports from China – the largest exporter to the United States – declined during this period, the market shares of other leading suppliers, such as Vietnam, Bangladesh, Cambodia and Pakistan, saw an increase.

During 2013-23, the US was the largest single-country apparel importer in the world, sourcing the majority of its garments from Asia.

In 2023, the US imported apparel worth $79.3 billion, accounting for approximately one-fifth of global imports.

The two largest sources of the US apparel imports by value were China and Vietnam, which together made up 39 per cent of all US apparel imports that year.

Among the countries profiled in this report, known as the ‘five profiled countries,’ Bangladesh emerged as the largest supplier to the US by value, providing 9.0 per cent of US apparel imports worth $7.1 billion.

This was followed by India at $4.6 billion, or 5.8 per cent, Indonesia $4.2 billion, or 5.3 per cent, Cambodia $3.4 billion, or 4.3 per cent, and Pakistan $2.1 billion, or 2.6 per cent. Other significant suppliers of US apparel imports in 2023 included Mexico, Honduras and Italy.

The report said that although Bangladesh, Cambodia, India, Indonesia and Pakistan differed in the factors that make them attractive to US brands and retailers, they shared certain similarities and were all reportedly competitive in terms of sourcing costs.

It said that foreign direct investment drove Cambodia’s export-oriented apparel industry, which focused on cut, make and trim production using imported upstream materials.

Cambodia was viewed as an appealing alternative to sourcing from China and its reputation for social responsibility enhanced its competitiveness, the report read.

Regarding India, the report highlighted the country’s long history in textiles and apparel production, establishing it as a steady source of US imports.

‘Quality and detailed finishing contribute to the competitiveness of India’s apparel production, supported by a highly vertically integrated apparel industry,’ it stated.

According to the report, Indonesia was a major supplier of a wide variety of clothing, exporting the majority of its apparel to the United States.

While it was considered a relatively high-cost source, Indonesia’s production of high-value, complex garments such as business attire, outdoor apparel and athletic wear contributed to its competitiveness.

It also identified that Pakistan’s cotton sector underpinned its apparel industry, which was renowned for producing high-quality denim.

The USITC report noted that vertical integration and access to domestic cotton were competitive strengths of Pakistan; however, buyers expressed concerns regarding geopolitical risks.