Exactly one year ago today, Nobel Laureate Prof Muhammad Yunus was sworn in as chief adviser of Bangladesh’s interim government, following the ousting of the Sheikh Hasina-led Awami League on 5 August through a historic mass uprising.

The nation was gripped by uncertainty, anxiety, and a wave of emotions. Yet above all, there was a sense of relief — a belief that the country had finally found capable hands in a globally respected figure, and hope that he would steer Bangladesh towards the aspirations long held by its people.

However, the reality proved far more complex, particularly for the readymade garment (RMG) sector — the backbone of Bangladesh’s economy, contributing roughly 85% of total export earnings. The industry faced a myriad of challenges in the initial days of the new administration.

Fast forward to today, and the RMG sector, having weathered the storm, is firmly back on track, now showing a robust growth trajectory.

The headwinds

One of the major challenges at the beginning of the interim government was the deterioration of law and order, coupled with widespread workers’ unrest.

Over the past year, a total of 103 RMG factories have closed down, driven by a range of factors including a decline in orders and the political transition.

Md Towhidur Rahman, chairman of the Bangladesh Garment Workers Unity Council (BGWUC), told Daily Sun that approximately one lakh workers have lost their jobs in the past year.

“At the beginning of the new government, there was unrest across the industry due to a lack of trust. Following the mass uprising, many factories were shut and several owners left the country. Naturally, workers were anxious about their salaries and dues,” he said.

Inamul Haq Khan, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), identified the law demonstrations by the National Board of Revenue (NBR), technical issues at ports, and flash floods as key disruptions.

“There were serious safety concerns in the early days as law and order collapsed, and floods and labour unrest compounded the crisis. We struggled to unload shipments properly. Fortunately, the situation has gradually stabilised,” he noted.

What was done right

BGWUC Chairman Md Towhidur Rahman said around 40,000 workers from Beximco alone became unemployed.

However, the interim government disbursed over Tk500 crore to affected workers, enabling many to become self-employed.

“The government amended the labour law and aligned it with ILO standards. Workers’ salaries also increased. Overall, the government performed well over the past year. We urge the next elected government to continue these reforms and take effective steps to attract more investment and create new jobs,” he said.

Business confidence grows as election nears 

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Daily Sun that the banking sector and inflation indicators showed notable improvement over the past year under the interim government.

“However, a lack of investment-friendly initiatives, partly due to contractionary policies and the inexperience of the new government, initially led to low confidence,” he noted.

Shamim, who is also managing director of Fatullah Apparels Ltd, added that with the national election scheduled for February next year, business confidence is expected to strengthen further.

BGMEA Senior Vice President Inamul Haq Khan said that RMG exports grew by around 8% year-on-year, with notable gains in the US market.

“We are now in a stronger position compared to global competitors, especially India. We’re hopeful that our exports will continue to grow and that overall export earnings will surpass US$50 billion by the end of 2025,” he said.

Mohammad Masud Kabir, managing director of Motex Fashion Ltd, described the past year under the interim government as a mix of highs and lows. “Our exports increased, thanks to positive marketing and a strengthened national image,” he said.

He praised the BGMEA’s more proactive role under the interim administration and noted the organisation’s new leadership, elected through a fair and transparent process. “With continued efforts, the industry can resolve internal issues and drive further growth,” he added.

Masud Kabir projected that exports would exceed $50 billion by 2025, rise to $75 billion by 2028, and reach $100 billion by 2030, provided there is adequate government support.

“With the US imposing a 50% reciprocal tariff on Indian goods and just 20% on Bangladeshi exports, we expect to attract more buyers. If we maintain quality and service, the opportunity is ours to seize,” he said, pointing to the country’s pool of skilled garment workers.

However, he also highlighted several ongoing challenges: high interest rates, poor transport infrastructure, port inefficiencies, and persistent gas and electricity shortages.

According to the Export Promotion Bureau (EPB), Bangladesh’s total exports reached $48.28 billion in FY2024-25 — an 8.58% rise from $44 billion in the previous fiscal year. The RMG sector led the way, growing by 8.84% to $39.35 billion.