Bangladesh Exports Slip 0.9% in July as RMG Shipments Fall

Dhaka, August 4, 2026 — Bangladesh began the new fiscal year on a negative note as merchandise exports recorded a 0.90 percent decline in July 2026, primarily due to weak performance by the readymade garment (RMG) sector, according to Export Promotion Bureau (EPB) data released on Monday. The country earned US$4.72 billion from exports in July compared to US$4.77 billion in the same month a year earlier.

Of the total export earnings, the RMG sector fetched US$3.88 billion, marking a 1.92 percent negative growth. Within the sector, knitwear exports declined by 0.90 percent to US$2.15 billion, while woven garment exports fell by 3.16 percent to US$1.72 billion. In contrast, home textiles registered a 14.37 percent growth to $77.86 million. The overall decline was cushioned by strong performance from several non-apparel sectors, particularly jute, which posted remarkable growth.

📊 Product-Wise July Export Performance

👕 RMG sector breakdown:

• Knitwear exports: $2.15 billion (down 0.90% YoY)
• Woven garment exports: $1.72 billion (down 3.16% YoY)
• Home textiles: $77.86 million (up 14.37% YoY)

💰 Non-apparel sectors showing strong growth:

• 🦯 Jute and jute goods: $85.36 million (up 53.97%) — from $55.44 million last year
• 🔧 Engineering products: $69.07 million (up 18.62%)
• 🦢 Bicycle exports: $14.61 million (up 20.54%)
• 🧪 Chemical products: $41.36 million (up 25.68%)
• 💊 Pharmaceuticals: $22.67 million (up 19%)
• 👢 Leather and leather products: $130.96 million (up 2.81%)
• 🧴 Plastic products: $21.58 million (up 1.98%)

⚠️ Sectors that declined:

• 🌾 Agricultural products: $82.34 million (down 9.02%)
• 🐟 Frozen and live fish: $35.73 million (down 13.28%)

The contrast between RMG performance and non-apparel growth highlights the ongoing challenge of export concentration. While jute, chemicals, and pharmaceuticals posted double-digit growth, their combined value remains a fraction of RMG earnings, limiting their ability to offset the garment sector decline.

👥 BGMEA President Responds

Mahmud Hasan Khan, President of BGMEA, contextualized the decline by pointing to an unusually strong comparison base. "July 2025 was an exceptionally strong month, recording the highest single-month export performance in Bangladesh's RMG history. Against that extraordinary base, the current figure of US$3.89 billion represents a welcome start to the new fiscal year."

He explained that woven garments accounted for most of the decline, falling by 3.16 percent year-on-year, while knitwear exports proved more resilient, declining by only 0.90 percent. He also noted that utilisation declaration (UD) data reflected a similar picture, with UD value for July 2026 declining by 2.8 percent compared to July 2025.

"This performance comes at a time when the industry is navigating significant challenges, including a severe gas crisis that is constraining production capacity utilization, and ongoing geopolitical uncertainties that continue to disrupt global trade and supply chains," the BGMEA leader said. Despite these headwinds, Bangladesh's RMG sector has demonstrated resilience, crossing nearly US$3.89 billion in a single month, he added.

🧱 Gas Crisis Impacting Production Capacity

The gas crisis has emerged as one of the most significant challenges for the export sector. Many factories are operating at reduced capacity due to insufficient gas supply, directly impacting production volumes and delivery timelines. Some RMG factories have been forced to suspend operations temporarily, while others are relying on expensive alternative energy sources that erode profitability.

The BGMEA has repeatedly called for ensuring uninterrupted gas supply to export-oriented factories, arguing that energy security is directly linked to export competitiveness. The government has been importing LNG at high spot prices to address the shortfall, but supply constraints persist. The situation is particularly severe in industrial hubs like Gazipur, Narayanganj, and Savar, where garment factories are concentrated.

Simultaneously, geopolitical uncertainties — including the 19 percent US reciprocal tariff, ongoing USTR forced labour investigation, Middle East shipping disruptions, and fluctuating global demand — continue to create headwinds for exporters. The combination of domestic energy shortages and international market volatility has created a particularly challenging environment for maintaining export growth momentum.

📋 Strategic Context: FY2026-27 Outlook

The July data marks the beginning of FY2026-27, a critical year as Bangladesh prepares for LDC graduation and navigates the new US trade agreement that was signed in February 2026. The government has set an ambitious $63.4 billion export target for the year, requiring approximately 15 percent growth — a significant challenge given the current trajectory and the multiple challenges facing the RMG sector.

The strong performance of jute (54% growth), pharmaceuticals (19%), chemicals (26%), and engineering products (19%) offers a glimmer of hope for export diversification, a long-standing policy goal. The extension of bonded warehouse facilities to non-RMG exporters, as announced in the budget, could further support this diversification if effectively implemented.

However, with RMG still dominating over 84 percent of total export earnings, the sector's performance will ultimately determine whether Bangladesh meets its annual target. The gas crisis resolution and effective trade diplomacy with the United States remain the two most critical factors that will shape the export outlook for the remainder of the fiscal year. Without addressing these fundamental challenges, achieving 15 percent growth appears increasingly difficult.