Bangladesh is increasingly being seen as a top contender to absorb apparel orders shifting away from China, as US fashion brands rethink their sourcing strategies amid escalating tariffs and geopolitical friction.

But industry leaders caution that without urgent improvements in infrastructure, energy supply, and financial support, the country risks falling short of its full potential.

The shift comes in response to growing concerns among US brands over rising costs and policy uncertainties under the Trump administration.

A recent study led by Dr Sheng Lu, Professor of Fashion and Apparel Studies at the University of Delaware, found that leading US fashion firms are actively looking to reduce their ‘China exposure’ and diversify their sourcing base.

With China’s share in the US apparel market declining sharply—from 37.7 per cent in 2013 to 21.3 per cent in 2023—countries like Bangladesh, Vietnam, and India have gained ground.

Bangladesh’s share rose from 6.0 per cent to 9.0 per cent over the same period.

‘This presents a significant opportunity for Bangladesh,’ said Fazlul Hoque, Managing Director of Plummy Fashions Ltd and former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

‘If we can improve efficiency and enhance capacity, especially in value-added items, we can capture a greater share of the shifting orders,’ he said.

Exporters optimistic but cautious

Exporters note that despite a competitive edge in cost, Bangladesh must urgently address longstanding issues—such as energy shortages, high bank interest rates, weak infrastructure, and dependence on imported raw materials—to fully seize the opportunity.

Shovon Islam, Managing Director of Sparrow Group, observed strong export growth in recent months, indicating early gains from the China shift.

‘Bangladesh is among the top beneficiaries. However, the bigger question is whether we can maintain and expand that share,’ he said.

He pointed to the absence of fresh investment in manmade fibre (MMF) and high-value segments, which are increasingly in demand.

‘The growth could be stronger if garment makers received financial support as they did before. Now, tight monetary policies and energy shortages are holding us back,’ Shovon said.

He also added that around 15 per cent of spring season orders are currently on hold, while Christmas orders have dropped by about 10 per cent, partly due to uncertainty over the US tariff environment after July 9.

Capacity under strain

Others in the industry echoed concerns about Bangladesh’s readiness.

Sayeed Ahmad Chowdhury, Director of Operations at Square Denim, said that several major vertically integrated manufacturers—including Beximco, Nassa, and Mahmud—have shut down in recent years, leading to a loss of production capacity.

‘Many factories in areas like Bhaluka and Gazipur are operating below capacity due to poor energy supply. Those with weaker banking relationships are struggling to open letters of credit, and logistics issues are pushing up lead times,’ he said.

Regional competition rising

While Bangladesh has made gains, the regional competition is stiff.

Vietnam’s market share grew from 10 per cent to 17.8 per cent during the same period.

India’s share rose from 4.0 per cent to 5.8 per cent, while Cambodia and Pakistan saw moderate increases to 4.3 per cent and 2.6 per cent respectively in 2023.

Fazlul Hoque cautioned that while US tariffs may temporarily boost Bangladesh’s competitiveness, pressure from buyers to reduce prices continues.

‘The price of new orders is rising locally, but buyers are pushing for lower rates. That’s a real challenge,,’he said.

Outlook depends on policy and investment

The study by Dr Sheng Lu also found that while US companies are moving away from China, there is little evidence they are shifting sourcing to the Western Hemisphere.

Instead, maintaining a diverse and flexible sourcing strategy remains key, with companies cautious about relying too heavily on any single country.

Despite this, Bangladesh stands to benefit—if it can act decisively.

‘There is clear potential,’ said Shovon. ‘But exporters are still in the dark about the government’s plans. We need clarity, support, and urgent reforms if we are to capture the full benefit of this global sourcing realignment.’