Europe's Unrest Casts Shadow Over Bangladesh Garments as Exporters Fear Losing Orders

Bangladesh's export earnings have fallen faster than the overall European garment market. From January to August this year, clothing imports into the European Union fell by 3.83 percent, but imports from Bangladesh fell by 11.67 percent over the same period.

In other words, alongside a shrinking European market, Bangladesh's position there has also come under pressure. Discontent in several European countries over living costs, fuel prices and a housing crisis has created fresh anxiety.

If protests and economic uncertainty persist, consumer spending could fall, and Bangladesh's exporters fear a negative impact on demand and new orders. However, they are not blaming the protests alone.

Industry figures say buyers' pressure to cut prices, the capacity of competitor countries and rising production costs at home are also major challenges. Government restrictions on yarn imports have added to concerns about factory costs and competitiveness.

Already, a French buyer has asked a Bangladeshi garment factory to put an order on hold. Fazle Shamim Ehsan, chief executive of Narayanganj-based Fatullah Fashion Limited and executive president of the BKMEA, said the order had previously been agreed and the buyer later asked for it to be suspended. He fears that prolonged unrest in France could reduce purchasing power and clothing demand.

DBL Group managing director M A Jabbar said Bangladesh already faces intense competition in Europe, and prolonged new instability could damage exports. Asif Ashraf, managing director of Urmi Group, which exports to the EU, voiced the same concern.

However, Sparrow Group managing director Shovon Islam believes Europe's overall economic slowdown matters more than the protests in reducing orders. He said orders are also falling in the US market, but Europe's situation is comparatively worse.

According to Eurostat, the EU's total clothing import value in January-August fell to 60.29 billion euros from 62.69 billion euros a year earlier. Imports from Bangladesh fell from 13.50 billion euros to 11.93 billion euros, a loss of about 1.58 billion euros in eight months.

It was not only volume that fell, but prices too. Shipments from Bangladesh fell 4.58 percent, and the average price per kilogram dropped from 14.87 euros to 13.76 euros, down 7.43 percent. By contrast, EU imports from China rose 2.38 percent and from Vietnam 4.46 percent in the same period.

There is, however, a somewhat positive recent picture. According to the Export Promotion Bureau, Bangladesh's garment exports to the EU in July-September of fiscal 2026-27 rose 3.33 percent year-on-year to 4.90 billion dollars.

The European Commission forecasts EU growth easing from 1.5 percent in 2025 to 1.1 percent in 2026, with inflation reaching 3.1 percent. If that pressure persists, its effect on consumer spending will add uncertainty to the clothing market.

At home, a major pressure is the new yarn import rule. To protect domestic textiles, the government has withdrawn bonded warehouse facilities for 10 to 30 count yarn; importers must now provide a bank guarantee equal to the yarn's value. Fakir Fashions managing director Fakir Kamruzzaman Nahid said imported 30-count yarn costs 3.15 dollars per kilogram while the same yarn costs 3.75 dollars locally, and using local yarn could add an average 15 cents to the cost of each garment, while European buyers will not pay even one cent more.

Nahid warned that the next month is crucial; if the restrictions are not lifted, some orders could move to Vietnam, Cambodia, India and Pakistan. A new wage increase also lies ahead. Overall, the protests may not be the main cause of falling exports, but demand uncertainty, lower average prices, competitors' progress and rising production costs have placed the garment industry before a major challenge.