Special Correspondent – After two consecutive quarters of growth, value addition in Bangladesh’s ready-made garment (RMG) exports has witnessed a decline.
According to the latest quarterly report published by Bangladesh Bank, value addition in the apparel sector dropped to approximately 61% during the third quarter (January-March) of the current 2025-26 fiscal year, down from nearly 64% in the previous quarter.
The central bank report highlights that total RMG exports in the third quarter amounted to $9.19 billion, while the import cost of raw materials reached $3.55 billion. Consequently, the value addition for this period stands at 61.35%.
In comparison, the second quarter (October-December) of the current fiscal year saw RMG exports worth $9.74 billion, with raw material imports at $3.48 billion.
This indicates a contraction in export earnings by $550 million in the third quarter, coupled with an increase in raw material import costs by $67.3 million.
It is worth noting that Bangladesh Bank calculates “value addition” by deducting the import costs of cotton, yarn, fabric, and accessories from total garment export earnings.
This metric is widely recognized by industry stakeholders as the true measure of net export income in the apparel sector.
Data from Bangladesh Bank indicates that value addition hit a historic peak in the second quarter (October-December) of the 2022-23 fiscal year, surging from 59% to over 67%. For the following five quarters, value addition remained steady between 70% and 72%.
However, analysts noted that these high figures were largely inflated due to discrepancies in export data reporting by the Export Promotion Bureau (EPB).
Following a correction of these reporting errors, it was observed that value addition for the January-March and April-June quarters of the 2022-23 fiscal year was actually closer to 62%.
Further analysis of annual trends shows that in the 2023-24 fiscal year, Bangladesh exported garments worth $36.13 billion against $14.40 billion in raw material imports, resulting in a value addition of roughly 60%.
In the following fiscal year, exports reached $39.35 billion with $16.13 billion in imports, yielding a value addition of 59%.
During the first nine months of the current fiscal year, total exports stood at $28.87 billion, while raw material imports were $10.88 billion, bringing the cumulative value addition to 62%.