Bangladeshi Garment Exporters Likely to Face Growing Crisis in the European Union Market

02-Feb-2026 02:50 PM

Dhaka: The bilateral agreement signed between India and the European Union is expected to create a serious challenge for Bangladeshi garment exporters. The agreement, concluded last week, is expected to become fully effective from 2027 and has been described as the “mother of all deals.” Once implemented, trade in Indian textile and garment products in the European Union is expected to rise sharply, making it increasingly difficult for Bangladeshi exporters to compete with India in the EU market.

Access to the vast European Union market will also help Indian exporters reduce their dependence on the US market, where Indian textile products face a steep import duty of around 50 percent. Meanwhile, Bangladesh already faces intense competition in the global apparel market from China, Pakistan, South Korea, Thailand, Vietnam, and several other countries.

In the European Union, ready-made garments and other textile products from India are generally price-competitive, but high customs duties have at times restricted export growth.

Interestingly, at present Bangladesh also enjoys duty-free access for textile exports to the European Union. However, this concession is limited to a period of three years. Bangladesh was granted this benefit under its status as a least developed country (LDC). If no new agreement is reached within this three-year window, a duty of 12.5 percent will be imposed on Bangladeshi textile products exported to the EU from 2029 onward.