Business World

Covid-19 Impact: Turbulence faced by Bangladesh garment industry

Bangladesh has a very vibrant garment industry. It is the 2nd largest garment exporter worldwide. This industry was valued at $34 billion in 2019, but when the pandemic hit, it shrunk to $27.95 billion in 2020.

The garment industry also accounts for nearly 80% of its total export earnings. It contributes to roughly 11% of the nation’s GDP and employees around 4.4 million people, majority of them are women and a large chunk of them are unskilled migrant workers belonging to poor socio- economic backgrounds.


During the initial months of the pandemic, the Bangladesh government announced closures and restrictions to prevent the spread of infection, all garment factories were forced to shut down. Many of the workers were stranded as they could not travel back to their home towns and villages because of this.

The Industry suffered payments delays, reduction in orders and many  contract terms were renegotiated all due the raging pandemic.

Major international fashion brands stopped making payments to garment workers across the world, these funds amounted $16 billion. Bangladeshi workers were severely impacted.  However, many of these big retailers continued to paid dividends to their shareholders.

At least 1,900 brands cancelled or delayed orders worth $3.7 billion export orders. Exports reportedly fell by 17% during 2020 and the industry declared losses amounting more than $5 billion.

Many small factories shut down or were evicted. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported that approximately 376 factories had been shut down.

Nearly half a million workers lost their jobs and more are expected to be laid off. The workers received only 65% of their pay in the month of April 2020 many factories of a larger scale did not even qualify to receive funding, hence for quite a while a lot of people went unpaid.


Things started getting better over time, the industry is said to be operating in full scale, 100% capacity.

The government had even announced financial stimulus packages to ensure the workers get paid their wages and salaries. Several overseas retailers and brands even agreed to pay workers for fully finished garments. And in November 2020 the export receipts hit a record $3.1 billion.

This industry even though hit a lot of road blocks is forecasting a very colorful and bright future. By the end of 2021 they aim to be valued at $50 Billion.

Bangladeshi government proposed to up-skill their workers to improve quality and cope with increase in demand for the future, and better  employment prospects. To hold companies accountable towards their employees, the authorities have proposed major labour reforms.