Ready-Made Garment Industry in Bangladesh: Exports, Workers and the Road Ahead

No industry has shaped modern Bangladesh like the sewing factory. The ready-made garment (RMG) industry earns roughly four-fifths of everything the country sells to the world, puts a wage into the hands of around four million workers — most of them women from rural villages — and has made Bangladesh the world's second-largest exporter of clothing, behind only China. It began, less than fifty years ago, with a single consignment of shirts and about 130 trainees in a South Korean factory. This article is about the garment trade itself: the factories, the exports, the buyers and the workers. The wider textile chain behind it — the spinning, weaving, dyeing and finishing mills that supply the sewing lines — is covered in Wiki Bangla's profile of the textile industry.

How the Industry Began

The pioneering name is Reaz Garments, which started as a small Dhaka tailoring shop in 1960 and took its company name in 1973. In the standard account of the industry's birth, Reaz made the breakthrough export in 1978, shipping 10,000 men's shirts, worth 13 million French francs, to a Paris-based buyer. Even so, in 1978 Bangladesh had just nine export-oriented garment units, earning about a million dollars between them.

The real catalyst was Desh Garments, founded by Mohammad Noorul Quader and set up in 1979 as the country's first fully export-oriented garment company. Desh signed a technical and marketing collaboration with Daewoo Corporation of South Korea — a company that, like other established Asian exporters, was running into the quotas of the Multi-Fibre Arrangement (MFA), the system that from 1974 capped how much clothing rich countries would accept from each supplier. Producing in a quota-free least developed country was the way around the ceiling. Under the Desh–Daewoo agreement, about 130 Bangladeshi workers and managers were trained at Daewoo's plant in Pusan in 1979. They came home to form the skills nucleus of an industry, and a striking number of them later opened factories of their own — which is why Desh is still called the "mother" of the RMG industry. A second Korean firm, Youngone, formed the first equity joint venture, with Trexim, in 1980.

Growth after that was explosive. There were 47 factories by the end of 1982 and 587 by 1984–85; the manufacturers organised themselves in the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), founded in 1983. Garment exports, worth just US$31.57 million in FY1983–84 — 3.89 percent of the national total — climbed through the quota years, helped by bonded warehouses and back-to-back letters of credit. Quotas were imposed on Bangladesh itself from 1985, and when the entire MFA system expired on 1 January 2005, many analysts predicted the industry would collapse against unrestricted Chinese competition. The opposite happened: buyers stayed for the price, the scale and a deepening local supply base, and exports kept rising for most of the next two decades.

The Export Engine

The numbers are now very large. According to the Export Promotion Bureau (EPB), garment exports earned US$39.35 billion in FY2024–25, up 8.84 percent on the year, out of total merchandise exports of $48.28 billion — a share of 81.49 percent. Knitwear is the bigger half ($21.16 billion in FY2024–25), because Bangladesh spins and knits much of its own yarn; woven garments earned $18.19 billion and depend more heavily on imported fabric. In FY2025–26 the long rise paused: garment exports slipped 1.64 percent to $38.70 billion as European demand softened and energy shortages bit at home. The first four months of FY2026–27 (July–October 2026) brought a recovery, with exports up 5.82 percent to $13.75 billion, led by the United States market.

The map of buyers is concentrated. The European Union takes roughly half of all garments — $19.06 billion, or 49.25 percent, in FY2025–26 — entering duty-free under the EU's Everything But Arms scheme. The United States is the largest single-country market ($7.74 billion, about 20 percent), followed by the United Kingdom ($4.39 billion) and Canada ($1.34 billion). Non-traditional markets such as Japan, Australia and South Korea together took about 16 percent, a share exporters are trying hard to raise.

In world rankings, WTO data for 2025 keep Bangladesh second with $38.82 billion and a 6.76 percent share of global apparel exports, behind China ($157.11 billion) but with Vietnam closing fast: Vietnam grew more than 10 percent in 2025 to $37.51 billion, narrowing the gap to barely $1.3 billion. What Bangladesh sells is also narrow. Basic items — T-shirts, trousers and sweaters — made up over 78 percent of shipments in July–October 2026, while the man-made-fibre and technical garments that dominate growth in world demand remain a small part of output. Mapped in Bangladesh, the BRAC University registry that physically verifies factories, counted 3,555 export-oriented factories employing about 3.04 million workers at the end of 2024; BGMEA's own database puts employment higher, at 3.7 to 3.8 million.

Four Million Workers

The commonly cited figure is around four million workers, and the industry's social significance lies in who they are. When the factories opened, roughly 80 percent of the workforce was female — young women migrating from villages into their first formal jobs, an influx widely credited with delaying marriage, raising girls' schooling and shifting household bargaining power across rural Bangladesh. That share has been falling for years as the industry automates and as higher wages draw more men in: current estimates put women at between about 54 and 65 percent of the workforce, depending on the survey. The direction of travel — a shrinking female majority in the industry that more than any other employed Bangladeshi women — is now a policy concern in its own right.

Conditions on the factory floor remain the industry's contested ground. Work is organised around buyer deadlines and piece-rate pressure; overtime is routine; and the subcontracting tier below the registered exporters is consistently harder to monitor than the large, audited factories that dominate the export figures. The wage question, in particular, has never stayed settled for long — a pattern that runs from the wage protests of 2023 straight into the unrest of late 2026.

Rana Plaza and the Safety Reckoning

On 24 November 2012, fire tore through the Tazreen Fashions factory at Ashulia, killing 112 workers, many trapped behind locked exits. Five months later, on 24 April 2013, the eight-storey Rana Plaza building in Savar — housing five garment factories — collapsed in the early morning, killing 1,134 people and injuring more than 2,500. It remains the deadliest disaster in the history of the garment industry anywhere, and it destroyed, in a day, the assumption that low prices excused lethal buildings.

The response rewrote how global supply chains are policed. Within weeks, more than 200 mostly European brands signed the Accord on Fire and Building Safety in Bangladesh — unusually, a legally binding agreement with global trade unions, built on independent engineering inspections, published reports and enforced remediation. North American retailers ran a parallel programme, the Alliance for Bangladesh Worker Safety. Between them, engineers inspected more than 2,000 factories and identified over 150,000 hazards — faulty wiring, overloaded floors, missing fire separations — and by 2020 about 91 percent of the hazards found in Accord factories had been fixed. On 1 June 2020 the system was handed to a permanent national body, the RMG Sustainability Council (RSC), governed equally by manufacturers, brands and unions, and since 2021 it has operated under the successor International Accord. Bangladesh's export factories are, as a result, the most intensively inspected in the world — a genuine competitive asset with buyers, though campaigners note that smaller subcontracting factories still sit largely outside the net.

Wages, Green Factories and the Next Test

The minimum wage tells the industry's central tension in a single series: Tk 1,662.50 a month in 2006, Tk 3,000 in 2010, Tk 5,300 in 2013, Tk 8,000 in 2018, and Tk 12,500 from 1 December 2023 — a 56 percent rise that still left unions calling it below a living wage. Inflation since then has eaten roughly 30 percent of its value. A recent amendment to the Labour Act shortened the wage-review cycle from five years to three, and in the autumn of 2026 the question exploded again: workers demanding Tk 30,000 stopped hundreds of factories — BGMEA counted 529 disrupted on a single day, 1 November 2026 — and the government responded the same day by forming a new six-member wage board, which is expected to finalise a revised scale in December 2026. Its decision will land on an industry whose buyers resist paying more per shirt even as they demand ever-higher standards.

Against the wage pressure stands an unlikely selling point: no country has more green factories. By July 2026 Bangladesh had 290 garment factories certified under the US Green Building Council's LEED system — 125 of them at the top Platinum grade — the highest national total anywhere, and a Gazipur factory, HAMS Garments, scored 108 out of 110 in January 2026, reported as the highest LEED score ever recorded in its category. Green buildings cut energy and water costs and increasingly function as a condition of orders from brands with their own climate commitments.

The tests ahead are about market access and costs, not demand for sewing capacity. In the United States, which offers Bangladesh no preferences, the 2025 "reciprocal" tariff saga — an announced 37 percent, negotiated to 20 percent, then set at 19 percent in an Agreement on Reciprocal Trade signed in February 2026 — was overtaken when the US Supreme Court struck the tariffs down; as of November 2026 Bangladeshi goods face a 10 percent Section 301 duty on top of regular tariffs, with the February agreement still unratified. In Europe, the reprieve is longer but finite: Bangladesh's graduation from least-developed-country status, long scheduled for November 2026, was postponed by the UN General Assembly on 29 October 2026 to 24 November 2029, and duty-free EBA access should run for a three-year transition beyond that — but afterwards the industry must qualify for GSP+ or face duties of roughly 9 to 12 percent on its biggest market. At home, gas and power shortages deepened through 2026; a Reuters survey of knitwear factories in September 2026 found more than half had lost or seen cut orders because of the energy crisis.

Conclusion

The ready-made garment industry is at once Bangladesh's greatest economic success and its largest concentration of risk. It turned 130 trainees in a Pusan factory into the world's second-largest apparel exporter, gave millions of women their first wages, survived the end of the quotas that created it, and rebuilt itself after Rana Plaza into the most inspected and greenest garment sector in the developing world. What it has not yet done is diversify — away from basic cotton clothing, away from two Western markets, away from margins so thin that a wage board, a tariff notice or a gas shortage can each shake the whole economy. The postponed LDC graduation buys three more years. Whether the industry uses them to climb into man-made fibres, higher-value products and new markets will decide if the FY2025–26 dip was a pause in the story, or its turning point.