Bangladesh should shift its focus from volume-driven garment exports to value-added products to retain more export earnings at home, said Mahmud Hasan Khan, the newly elected president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

He said that expanding export volumes without increasing value addition weakens long-term sustainability.

"At the end of the day, Bangladesh, as a manufacturing and supplying country, needs more value addition and value retention. These are the ultimate goals in the global value chain," he said during an interview with The Daily Star last week.

Value retention refers to the net earnings a country retains from exports after subtracting the cost of imported raw materials and inputs. A higher retention rate indicates a stronger local economic contribution.

To support his argument, the new BGMEA president said that if Bangladesh were to export $100 billion worth of garments in a year but retain only $2 billion due to low value addition, the business model would not be sustainable.

"Instead, if we export $50 billion and retain $13 to $14 billion, that makes much more sense for Bangladesh," he said.

Many industry leaders have long championed the target of $100 billion in garment exports by 2030, focusing largely on increasing volume.

But Khan believes a better approach would be to prioritise value addition to ensure resilience and profitability. "If exporters chase volume alone, buyers will come, but the business might not be sustainable in the long run."

One important area for value addition is the production of garment items using man-made fibre (MMF). Countries like China and Vietnam have excelled in this segment.

Khan said Bangladeshi exporters are also eager to invest in MMF-based facilities, but inconsistent gas and electricity supplies obstruct large-scale investments in this area.

Although the interim government has repeatedly said it will not defer Bangladesh's graduation from the UN's least developed country (LDC) category, which is currently scheduled for November 2026, the new BGMEA president supports a two-year delay.

"If we can get another two years, businesses will have time to prepare for a smooth transition," he said.

Such a delay would also allow exporters to continue receiving incentives on export earnings, which he said would help increase competitiveness.

The top apparel manufacturers' leader also called on the government to support efforts to diversify export markets.

Bangladesh treats all markets outside the UK, the US, Canada and the European Union as emerging. While exports to these destinations were once negligible, they reached nearly $7 billion during the July–May period of fiscal year 2024–25.

New markets such as Japan, Malaysia, South Korea, Australia, India and China are now showing great potential, thanks in part to targeted government support.

"Japan is a $24 billion garment import market. Our exports there are rising fast and may reach $1.5 billion by the end of the current fiscal year," he said.

He said Bangladeshi missions abroad should play a stronger role in expanding both new and traditional markets.

"If we can grab a bigger share of the non-traditional markets, pressure on traditional ones will ease. That will reduce the tendency among buyers to push prices down and minimise unhealthy competition among domestic suppliers."

Regarding labour unrest, which added another layer to the challenges facing the local apparel industry after the political changeover in August last year, Khan partly blamed the factory owners.

He said labour unrest remains a recurring issue in the industry, often triggered by unpaid wages following unplanned factory expansion.

"Both human and natural causes prompt worker unrest. Healthy industrial relations are key to resolving these issues effectively," he said.

Commenting on the reciprocal tariffs by the Trump administration, Khan said if US buyers cut back on sourcing from Bangladesh, export dependence on the EU would grow.

"In the end, consumers in importing countries will bear the cost. If American consumers still demand Bangladeshi garments, exports to the US will continue despite higher tariffs."

The Trump administration is expected to announce the final tariff rates for Bangladesh soon.

If this leads to export concentration to the European bloc, Khan said Bangladeshi exporters will face greater pricing pressure from both buyers and market peers.

"Higher tariffs mean tougher challenges. But we still don't know what kind of tariff they will impose," he added.

The garment sector has faced multiple setbacks, including incidents of arson, vandalism, labour unrest and work stoppages following the August political changeover.

"After an uprising, law and order often deteriorates. Fortunately, it didn't reach that level in Bangladesh," Khan said. "Still, the current law and order needs to be improved for a better business environment."

"As the general election approaches, law and order might tumble. If stability holds, the sector will grow, and new investments will follow," he commented.

Urging the government to ease the ongoing energy crunch, reduce high bank interest rates and resolve political uncertainty, the BGMEA president said these measures are essential for attracting new investment, increasing exports and creating more jobs in the private sector.