Bangladesh shut 402 ready-made garment (RMG) factories between July 2023 and June 2026, Commerce Minister Khandakar Abdul Muktadir told parliament on 3 September 2026.

Of the closed units, 282 were members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and 120 were members of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Muktadir disclosed the figures in response to a question from Ruhul Amin MP at the Jatiya Sangsad, citing a BGMEA report dated 22 June.

What drove the closures?

The minister attributed the shutdowns to overlapping global and domestic shocks. He cited the COVID-19 pandemic, the Russia-Ukraine war, the Israel-Palestine conflict and broader Middle East tensions, the US-Iran confrontation, the global recession, domestic political instability, and a banking-sector liquidity squeeze linked to money laundering.

Two trade-specific pressures also featured in his answer. India and Vietnam have signed free trade agreements with the European Union, sharpening their competitive position. Foreign buyers, the minister said, have shown reluctance to place export orders with small and medium-sized factories, citing monitoring and traceability constraints.

What support has the government deployed?

Muktadir listed several cash-assistance measures aimed at the textile and apparel industry:

• 1.50 percent alternative cash assistance in place of customs bonds and duty drawbacks for export-oriented domestic textile industries
• An additional 0.50 percent special support for textile exporters shipping to the Eurozone, on top of the existing 1.50 percent
• A 3 percent additional benefit for small and medium-sized export-oriented RMG units, covering knitwear, woven garments and sweaters
• 0.30 percent special cash assistance for the broader RMG sector

A separate 2 percent cash incentive continues for textile exports of new products and shipments to new markets, excluding the United States, Europe and Canada.

What does LDC graduation change?

Bangladesh will exit the least developed country (LDC) bracket and graduate to developing-country status. Muktadir warned this transition will cost Bangladeshi exporters preferential market access under developed-country trading schemes worth an estimated $17.5 billion.

Which trade pacts is Dhaka pursuing?

To offset that exposure, the government confirmed an Economic Partnership Agreement (EPA) with Japan has been concluded. A Comprehensive Economic Partnership Agreement (CEPA) with South Korea remains under discussion. Negotiations on EPA, CEPA or FTA frameworks are also in progress with the European Union, the Regional Comprehensive Economic Partnership (RCEP), the UAE, Singapore, Indonesia and China.

The Export Promotion Bureau will host a "Global Sourcing Expo" in fiscal 2025-26, alongside single-product sourcing fairs, to widen buyer engagement and diversify the export basket. Bangladesh's overseas missions have been directed to open new market channels in Japan, India, South Korea, China, Africa and South America.

What sourcing decision does this force?

The 402-unit drop reshapes the addressable supplier base for buyers with Bangladesh programmes. Mid-tier and smaller vendors carry the heaviest attrition risk, while the government's tiered cash incentives target exactly those operations. Sourcing teams with commitments to SME-scale factories should re-score supplier viability against the new incentive stack and the impending LDC graduation, which will recalculate landed-cost economics from late 2026 onward.