"Bangladesh’s garment sector under pressure from energy crisis and rising costs", 30 June 2026

Bangladesh's garment sector is facing mounting pressure from a deepening energy crisis and rising production costs, threatening exports, employment and economic stability.

Prolonged power outages, surging fuel and raw material prices, and weakening global demand have forced factories to cut production, reduce orders and lay off thousands of workers...

Although the war launched by the United States and Israel against Iran has, for now, come to an end, Bangladesh continues to grapple with a severe energy crisis. The country's ready-made garment (RMG) industry has been among the hardest hit.

Bangladesh’s garment sector... consume[s] vast amounts of natural gas and petrochemical products. Around 95 percent of the country's oil and gas imports come from the Gulf region, making the sector highly vulnerable to disruptions and price hikes.

Rising energy costs have placed enormous pressure on manufacturers. On 6 June, major garment exporter Al-Muslim Group laid off approximately 1,900 workers from its knitwear and denim factories in Dhaka...

In May, the government imposed average daily power cuts of around two hours in and around Dhaka. In Chattogram, the country's second-largest city, outages have at times lasted up to eight hours a day. To keep production running, some factory owners have turned to diesel-powered generators. However...even the 10–15 minutes required to start a generator can result in significant losses...

Between February and May, garment production declined by nearly 30 percent. Delays in manufacturing, transportation disruptions, and weaker consumer demand in Western markets have prompted global brands to reduce their orders. Abdullah Hil Naqeeb, owner of a jacket manufacturing factory in Dhaka, said his orders have fallen by around 20 percent since the conflict began...

The increase in fuel prices has also driven up the cost of raw materials. Synthetic fibres, dyes, finishing chemicals, plastic buttons, and zippers all rely on petrochemical inputs, which together account for roughly 65 percent of the cost of producing a garment. Around 30 percent of garments manufactured in Bangladesh use polyester fibres and yarn made from naphtha, the price of which has surged by nearly one-third since the conflict began...

While a limited number of vertically integrated textile mills exist, most factories perform only a single stage of the production process, increasing transportation requirements. Abdullah Hil Naqeeb estimates that his transport costs have risen by around 30 percent...

...international brands have been unwilling to pay higher prices despite rising production costs. The situation remains unchanged...