Inside Bangladesh’s Export Diversification Strategies
Inside Bangladesh’s Export Diversification Strategies
Founder & CEO, Trade & Investment Bangladesh (T&IB)
Executive Director, Online Training Academy (OTA)
Secretary General, Brazil Bangladesh Chamber of Commerce & Industry (BBCCI)
Bangladesh’s export story is one of striking success and stubborn imbalance. Over the past decade the country has transformed into a global manufacturing hub led overwhelmingly by ready-made garments (RMG) but that very success has left its export basket highly concentrated. In the fiscal year 2023–24 Bangladesh’s total export receipts from goods and services were about $44.47 billion, with the RMG sector alone accounting for roughly $36 billion (well over 80% of merchandise exports).
That dependence on apparel is visible in more granular figures: RMG exports reached about $38.48 billion in calendar 2024, while non-RMG products have lingered at only about 17–18% of total export earnings a clear signal that diversification remains incomplete. Such concentration exposes the economy to demand shocks, tariff changes and shifting buyer preferences, and it places a premium on policy action to broaden the export base.
Recognizing the risks, Bangladesh’s policymakers and development partners have made diversification a central objective of recent trade strategies. New export policy frameworks and national strategies emphasize moving up value chains, scaling light-engineering and technology-intensive goods, promoting pharmaceuticals, leather, agro-processing, shipbuilding and jute products, and deepening market access beyond traditional buyers. The government’s targets are ambitious aiming to substantially raise export earnings and to support higher-value, sustainable exports through incentives, productivity support and market diversification programs.
This report peels back the layers of those strategies looking at which sectors are being pushed, what policy instruments and incentives are in play, how public and private actors coordinate, and where the real bottlenecks and opportunities lie. By pairing hard data with on-the-ground examples, we’ll examine whether Bangladesh can translate its manufacturing prowess into a broader, more resilient export architecture and how quickly that transition can realistically proceed.
Unveiling the RMG Reliance
Bangladesh’s rise as a ready-made garments (RMG) powerhouse is nothing short of remarkable a testament to decades of grit, strategic positioning, and an abundant, competitive workforce. From a modest export base in the 1980s, the country now ranks among the world’s top apparel exporters, competing head-to-head with giants like China and Vietnam. In FY 2023–24 alone, RMG exports brought in around $36 billion, making Bangladesh the second-largest apparel exporter globally, and cementing the sector as the engine of the nation’s economic growth.
Yet behind this triumph lies a sobering reality: more than 80% of Bangladesh’s total merchandise exports come from the garment industry. This overwhelming concentration creates immense opportunities stable global demand, employment for over 4 million workers (mostly women), and consistent foreign exchange inflows but also sharp vulnerabilities. Any downturn in global apparel consumption, changes in trade policy, or disruptions in supply chains can send ripple effects through the entire economy.
This reliance is a double-edged sword. On one hand, it fuels GDP growth, industrialization, and social progress. On the other, it risks stalling economic diversification, limiting innovation, and making the country’s export profile less adaptable to shifting global market demands. For Bangladesh to secure long-term economic stability and remain competitive on the world stage, reducing this overdependence on garments and cultivating a broader export portfolio has become an urgent policy priority.
Beyond the Fabric: New Horizons
In recent years, Bangladesh has embarked on an ambitious mission to redefine the “Made in Bangladesh” brand not just as a global symbol of quality garments, but as a hallmark of diverse, high-value products. Recognizing the risks of overdependence on RMG, the government has rolled out a series of strategic initiatives to expand the country’s industrial and export base. This push forms the backbone of a broader economic vision: to transform Bangladesh into a multi-sector manufacturing and services hub capable of competing in a wide range of international markets.
Several emerging sectors have been identified for their high growth potential:
- Pharmaceuticals: Already exporting to over 150 countries, Bangladesh’s pharma sector is leveraging WTO-compliant TRIPS waivers, domestic innovation, and expanding production capacity to increase its share in global medicine markets.
- Light Engineering: Supplying machinery parts, agricultural tools, and small industrial components, this sector is poised to replace costly imports and tap into growing demand from South Asia and Africa.
- IT/ITES: With a young, tech-savvy workforce, Bangladesh’s IT outsourcing and software export industry is scaling rapidly, aiming to hit the government’s $5 billion export target by 2025.
- Agro-processing: From processed fruits and vegetables to frozen seafood, this sector is being promoted to capitalize on the country’s rich agricultural base and growing demand for halal-certified food worldwide.
To support these industries, the government has introduced key policy shifts and incentives: tax holidays for export-oriented firms, bonded warehouse facilities, reduced import duties on raw materials, targeted skill development programs, and the creation of Special Economic Zones (SEZs) dedicated to non-RMG manufacturing. Additionally, investment promotion campaigns and trade agreements are being actively pursued to secure new markets and attract both domestic and foreign investors.
These initiatives signal a clear shift in Bangladesh’s economic strategy from a one-sector export champion to a diversified, innovation-driven economy ready to compete far “beyond the fabric.”
Tech and Talent: The Digital Push
Bangladesh is charting a bold course to position itself as a regional IT and IT-enabled services (ITES) hub, capitalizing on one of its most valuable assets a young, tech-savvy population. With over 65% of citizens under the age of 35, the country holds a demographic advantage in building a knowledge-driven economy. Government programs such as Digital Bangladesh Vision 2021 and the upcoming Smart Bangladesh 2041 have laid the foundation for a thriving digital sector by prioritizing ICT infrastructure, high-speed internet expansion, and e-governance.
The rise of software exports is already evident, with Bangladeshi firms delivering solutions in fintech, healthtech, e-learning, and enterprise software to clients across North America, Europe, and Asia. On the freelancing front, Bangladesh now ranks among the top global sources of online workers, earning hundreds of millions annually from platforms like Upwork, Fiverr, and Freelancer.com. At the same time, the e-commerce ecosystem is booming, with both domestic players (Daraz, Chaldal, AjkerDeal) and international marketplaces fostering cross-border sales of everything from handicrafts to electronics.
Fueling this growth are skill development programs like the Learning and Earning Development Project (LEDP), Skills for Employment Investment Program (SEIP), and partnerships with private tech academies that train youth in coding, digital marketing, data analytics, and AI. Coupled with investments in digital infrastructure including new data centers, submarine cable connections, and tech parks these initiatives are empowering a new generation of exporters who compete not with physical products, but with ideas, code, and digital creativity.
This digital push not only diversifies Bangladesh’s export portfolio but also places it firmly on the map as an emerging hub for innovation in South Asia.
Green Growth and Global Partnerships
Bangladesh’s long-term export strategy is increasingly tied to the principles of sustainability and green industrialization not just to meet global compliance standards, but to future-proof its competitiveness. The RMG sector has already made headlines by hosting the highest number of green garment factories in the world, with over 200 LEED-certified plants. Similar sustainability standards are now being encouraged in emerging sectors like leather, agro-processing, and light engineering. Energy-efficient production methods, waste reduction initiatives, and renewable energy adoption are becoming integral to export-oriented industries, ensuring Bangladesh aligns with evolving buyer demands for low-carbon supply chains.
Equally critical is market access diversification through preferential trade agreements (PTAs), free trade agreements (FTAs), and bilateral partnerships. With the country’s graduation from LDC status in 2026, Bangladesh will gradually lose duty-free privileges in major markets, making such agreements vital for maintaining competitiveness. Current negotiations with partners like Indonesia, Bhutan, and China alongside discussions within regional blocs such as BIMSTEC and the D-8 aim to secure tariff concessions and open up untapped markets.
Foreign direct investment (FDI) is also at the center of this strategy. The government is actively courting investors through Special Economic Zones (SEZs), one-stop service centers, and investor-friendly policies. These efforts not only bring in capital but also facilitate technology transfer, enabling local industries to move up the value chain. From advanced textile machinery to pharmaceutical R&D, such collaborations are expected to boost productivity, quality, and innovation, making Bangladeshi exports more value-added and globally competitive.
By combining green growth initiatives with strategic global partnerships, Bangladesh is positioning itself to thrive in a post-LDC era more resilient, diversified, and ready for the challenges of a rapidly changing global trade landscape.
The Road Ahead: Challenges and Opportunities
As Bangladesh strives to broaden its export base, the journey ahead is both promising and demanding. Infrastructure bottlenecks remain a key challenge from port congestion and inadequate logistics to power supply reliability all of which can erode the competitiveness of non-RMG sectors. Bureaucratic hurdles such as lengthy approval processes, overlapping regulations, and complex customs procedures often slow down new exporters. Additionally, access to finance remains limited for small and medium enterprises (SMEs), particularly those venturing into emerging industries like IT, agro-processing, or light engineering, where upfront investment in technology and compliance can be high.
To compete internationally, Bangladesh must embrace continuous innovation, rigorous quality control, and strong brand building. Moving beyond a low-cost production image to one that emphasizes quality, sustainability, and design originality will be essential. Building global brands whether in pharmaceuticals, software, or processed foods will require coordinated efforts in marketing, certifications, and customer trust-building.
All of this feeds into Bangladesh’s Vision 2041 the bold ambition to achieve developed-nation status powered by a diverse, resilient, and innovation-driven export economy. This vision foresees not just higher export earnings, but also deeper integration into global value chains, wider market reach, and a workforce equipped for the demands of a high-tech, sustainable economy.
If Bangladesh can successfully address its structural challenges while seizing opportunities in emerging sectors, the next chapter of its export story will not just be about garments it will be about a nation reshaping its economic destiny on the global stage.
Export Support Services of Trade & Investment Bangladesh (T&IB):
Trade & Investment Bangladesh (T&IB) is a dedicated platform for empowering Bangladeshi exporters and aspiring businesses to access global markets with confidence, competence, and compliance. With years of experience in trade facilitation, market intelligence, and export capacity building, T&IB works as a strategic partner to help businesses navigate the complex world of international trade from identifying opportunities to delivering products to overseas buyers.
Key Export Support Services Offered by T&IB:
1. Market Research & Intelligence
- In-depth country and sector studies to identify the most promising export markets.
- Analysis of competitor activities, pricing trends, and product demand.
- Trade statistics and buyer behavior insights to guide decision-making.
2. Export Readiness & Capacity Building
- Training programs on export procedures, documentation, compliance, and INCOTERMS.
- Workshops on quality standards (ISO, HACCP, Halal, Organic, etc.) to meet global buyer requirements.
- Business coaching for SMEs to improve production capacity, product design, and value addition.
3. Trade Facilitation & Documentation Support
- Assistance in preparing export documents such as commercial invoices, packing lists, certificates of origin, and shipping documents.
- Guidance on export licensing, customs clearance, and bonded warehouse facilities.
- Liaison with government agencies and trade authorities to speed up processes.
4. International Marketing & Buyer Linkage
- Digital marketing strategies tailored for global audiences.
- Participation in international trade fairs and virtual B2B matchmaking events.
- Direct connection with verified buyers, agents, and distributors across multiple countries.
5. Export Diversification Support
- Identifying alternative products and sectors for export beyond RMG.
- Promoting emerging sectors like pharmaceuticals, IT/ITES, agro-processing, light engineering, and leather goods.
- Advisory on accessing niche markets such as halal foods, eco-friendly goods, and handcrafted products.
6. Investment & Technology Linkages
- Support in attracting foreign investment for export-oriented projects.
- Facilitating technology transfer agreements to improve productivity and quality.
- Connecting exporters with financial institutions for trade finance and working capital.
With a client-focused approach, T&IB’s mission is to strengthen Bangladesh’s presence in global trade and contribute to a more diversified, competitive, and sustainable export economy.
Contact Details: Trade & Investment Bangladesh (T&IB), Phone: +8801553676767, Email: info@tradeandinvestmentbangladesh.com, Website: https://tradeandinvestmentbangladesh.com
Conclusion
Bangladesh’s export journey is at a critical turning point. The nation’s remarkable success in ready-made garments has delivered growth, jobs, and global recognition but has also revealed the risks of relying so heavily on a single sector. As global trade patterns evolve and the country approaches its LDC graduation in 2026, diversification is no longer an option; it is an economic imperative.
The government’s proactive policies, private sector initiatives, and emerging industries from pharmaceuticals and agro-processing to IT/ITES and light engineering are laying the groundwork for a more resilient and competitive export portfolio. Green industrialization, preferential trade agreements, technology adoption, and skill development are not just buzzwords, but essential pillars for sustaining growth in the years ahead.
Challenges remain from infrastructure bottlenecks and access to finance to the need for stronger branding and innovation yet the opportunities far outweigh the risks for those ready to adapt. If Bangladesh can channel its youthful energy, entrepreneurial spirit, and policy momentum into building a truly diversified export economy, it can achieve the aspirations of Vision 2041: becoming a developed nation powered by innovation, sustainability, and global competitiveness.
Organizations like Trade & Investment Bangladesh (T&IB) are vital partners in this transformation, equipping businesses with the tools, insights, and connections they need to thrive in international markets. By combining strategic vision with practical support, Bangladesh can confidently step into the next era of trade one where “Made in Bangladesh” means excellence across industries, not just garments.