Bangladesh Has Been the World's Second-Largest Garment Exporter for 30 Years. That's Not a Strength Anymore

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Bangladesh Has Been the World’s Second-Largest Garment Exporter for 30 Years. That’s Not a Strength Anymore

A sharp analysis published March 25, 2026 by the East Asia Forum puts the problem plainly: Bangladesh's export growth since the 1990s has been driven overwhelmingly by ready-made garments, leaving the economy highly concentrated and exposed as the country approaches LDC graduation in 2026.

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This sustained export growth is now depending on policy-driven competitiveness rather than preferential access.

In November 2026, Bangladesh loses LDC trade preferences. EU buyers will invoke CSRD and CSDDD. US buyers are under Section 301 scrutiny pressure. Every new sector Bangladesh tries to enter will be asked the same question first: where’s the ESG documentation?

Cotton dependency. Labour rights scrutiny. Carbon footprint. Traceability demands. These aren’t “sustainability issues.” They are market access conditions.

Bangladesh diversifies or it stagnates. And ESG competence is the entry ticket to every sector that comes after garments.

Source: East Asia Forum

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The ESG Institute

This article has been written and proofread by global and local multisectoral experts from the ESG Institute team.

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Bangladesh Has Been the World’s Second-Largest Garment Exporter for 30 Years. That’s Not a Strength Anymore