by Asif Showkat Kallol
Bangladesh’s ready-made garment (RMG) sector has long served as the backbone of the country’s export economy. However, evolving global trade dynamics suggest that its lead over its closest competitor, Vietnam, may face increasing pressure in the coming years.
Globally, Bangladesh and Vietnam remain the world’s second and third-largest garment exporters after China. For the past four consecutive years, Bangladesh has retained the second position, largely supported by strong demand in the European Union market. Yet while Bangladesh maintains a strong foothold in Europe, Vietnam has established a commanding advantage in the United States, creating a two-front competition that could reshape the balance of power in the global apparel trade.
The EU remains Bangladesh’s largest export destination, accounting for more than half of its export earnings. Data from Eurostat show that Bangladesh’s share of EU apparel imports rose to 21.57% last year from 20.78% the previous year. In value terms, Bangladesh exported garments worth approximately $19.4bn to the EU, compared with about $18.3bn a year earlier. Over the past five years the country has steadily expanded its presence in the European market. In 2021, for example, garment exports to the EU stood at roughly $12.9bn.
Vietnam’s presence in the EU market remains considerably smaller but continues to grow. The country accounted for 4.86% of EU apparel imports last year, exporting garments worth just under $4.4bn. In 2024 its share stood at 4.53%, reflecting a gradual but consistent upward trend.
China still dominates EU garment imports with a 29.54% market share, while Bangladesh holds the second position. Turkey ranks third with about 9.27%, followed by India and Cambodia, each accounting for roughly 5%. Vietnam currently occupies the sixth position among the EU’s major apparel suppliers.
Bangladesh’s strong position in Europe has largely been driven by preferential trade access under the EU’s ‘Everything But Arms’ scheme, which grants duty-free entry to goods from least-developed countries. This advantage has allowed Bangladeshi exporters to maintain competitive pricing in international markets.
However, the competitive landscape is beginning to shift. Vietnam signed a free trade agreement with the EU in 2019, which came into force in August 2020. Under the agreement, around 71% of Vietnamese goods now enter the EU duty-free, while the remaining products face tariffs of between 4% and 6%. These tariffs will be gradually phased out, with the agreement expected to become fully operational within the next year.
Once fully implemented, the deal could significantly enhance Vietnam’s competitive position in Europe and potentially erode Bangladesh’s price advantage. Competition may intensify further as India moves closer to implementing its own free trade agreement with the EU, which could grant duty-free access to a wide range of Indian exports, including apparel and leather products.
While Bangladesh leads in Europe, the situation differs sharply in the United States. Statistics from the US Office of Textiles and Apparel (OTEXA) show that Vietnam’s garment exports to the US are roughly double those of Bangladesh. In 2025, Bangladesh accounted for 10.53% of US apparel imports, exporting garments worth about $8.2bn. Vietnam, by contrast, captured a 21.5% market share with exports approaching $16.7bn.
Industry leaders point to structural factors behind Vietnam’s advantage. According to Bangladesh Garment Manufacturers and Exporters Association president Mahmood Hasan Khan, Vietnamese manufacturers produce higher value-added and fashion-oriented garments, allowing them to command higher prices even with lower export volumes.
Another important factor is lead time- the period between receiving orders and delivering finished products. Vietnam’s proximity to China enables quicker and more cost-effective access to raw materials, reducing production time and transportation costs.
In fast-moving fashion supply chains where speed is critical, shorter lead times can be decisive. As global competition intensifies, Bangladesh may need to increase value addition and improve supply chain efficiency to maintain its strong position in the global garment industry.
