Swedish retail giant H&M has reiterated that Bangladesh remains a "very important sourcing market" for the company, addressing recent media reports that suggested a potential reduction in procurement from the country. As the largest garment buyer in Bangladesh, H&M sources apparel worth approximately $5 billion annually from nearly 300 local factories. While H&M declined to share specific production volumes or market order shares, citing commercially sensitive information, the company emphasized that its long-term partnerships in Bangladesh, established since the early 1980s, remain a fundamental aspect of its global operations.
Despite this commitment, there are indications of shifting market dynamics. Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), stated that during an informal meeting with H&M officials in Dhaka, the retailer acknowledged that work orders in Bangladesh were lower this year compared to the previous year. However, officials did not specify the extent of this decline. Hatem suggested that the global volatility has led to a general decline in apparel supply chain demand, which may be a primary driver for lower order volumes from major brands like H&M this year.
The industry is also navigating the challenges associated with Bangladesh’s upcoming graduation from least developed country (LDC) status to a developing nation, which is expected to occur in November this year. This transition could result in the loss of preferential market access to the European Union and other major markets. Furthermore, Hatem noted that H&M officials referenced India’s free trade agreement with the EU and the country’s aggressive incentives—including land, factory setup support, and worker benefits—which are making the Indian textile sector increasingly competitive.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently held an emergency board meeting to address the decline in exports, identifying several contributing factors including global economic volatility, US reciprocal tariffs, energy crises, high bank interest rates, and poor port operations. Mahmud Hasan Khan, president of the BGMEA, added that weak global demand has prompted Western retailers to hold onto unsold inventory, thereby slowing down new garment orders worldwide. Additionally, geopolitical disruptions, such as the US-Israel conflict affecting shipments and airfreight costs, have further complicated sourcing operations in the region.
