How govt can stop the export slide

Over nearly four decades, through persistence and sacrifice, Bangladesh has become a reliable exporting nation. Exports expanded steadily in recent years, but that momentum is now weakening. In March, exports fell by more than 18 percent year-on-year, an unusually sharp contraction. It was the eighth consecutive month of decline, something unseen in the country’s export history.  According to the Export Promotion Bureau (EPB), export earnings dropped to $3.48 billion in March from $4.25 billion a year earlier. The $770 million fall is significant, especially when monthly exports typically range between $4.5 billion and $5 billion.

Several factors explain the downturn. Externally, retaliatory tariffs imposed by the United States have reduced Bangladesh’s competitiveness in a key market. At the same time, competitors such as China, Vietnam and India have strengthened their presence in the European Union by offering lower prices and faster turnaround.

Over the past eight months, this has gradually eroded Bangladesh’s market share. Domestically, temporary disruptions also played a part. Eid-ul-Fitr led to factory closures averaging around 10 days, halting production and shipment for nearly a third of March. While this explains part of the monthly drop, it does not account for the sustained decline.

During the first nine months of FY 2025-26, total exports fell by 4.85 percent to $35.39 billion, compared with $37.72 billion in the same period a year earlier. July exports were unusually high as exporters rushed shipments to the United States ahead of tariff implementation. That created a temporary spike, followed by a correction from August onwards.

The readymade garment sector, which generates the bulk of export earnings, has been hit particularly hard. In March, garment exports fell by 19.35 percent to $2.78 billion, down from $3.45 billion a year earlier. Over the nine-month period, RMG exports declined to $28.58 billion from $30.25 billion. Eid-related holidays contributed to the March fall, but the broader trend reflects deeper structural and global challenges.

Global conditions have also turned adverse. Conflict in the Middle East has disrupted energy markets and pushed up oil prices, reducing consumer purchasing power in Europe and the United States. As demand weakens in these key markets, export-dependent economies such as Bangladesh feel the strain. Other sectors are under pressure. Home textiles fell by 21 percent, pharmaceuticals by 20 percent, vegetables by 45 percent, leather goods by 7 percent and jute products by 13 percent. A few segments, including frozen fish, crabs and plastic products, have shown resilience, but their scale remains small relative to overall exports.

Domestic constraints compound the challenge. Exporters face high lending rates, inconsistent electricity and energy supply, and logistical inefficiencies. Concerns over law and order, labour productivity, and port congestion further weaken competitiveness. In such conditions, sustaining export growth becomes harder. The response must be pragmatic and coordinated. First, the government should engage closely with exporters to understand sector-specific constraints and act quickly.

Access to finance needs improvement through lower lending rates and adequate liquidity. Second, exchange rate management should remain flexible and market-responsive to preserve competitiveness. Any misalignment can quickly erode margins in price-sensitive markets.

Third, targeted incentives may be required for sectors facing intense competition. These should be time-bound and performance-linked to avoid long-term fiscal costs. Fourth, infrastructure and energy reliability must be prioritised. Consistent power supply and efficient port operations are essential to compete globally. Bangladesh should also monitor how competitors support their exporters and adapt accordingly. The global trade environment is shifting quickly, and policy must keep pace.

Export growth cannot be taken for granted. It demands sustained policy attention, coordination and a willingness to confront both external shocks and domestic weaknesses. The current slowdown is a warning. The response must be timely and decisive.

The writer is an economic analyst and chairman at Financial Excellence Limited