As Managing Director of KDS Group, Salim Rahman has been steering the diversified and sustainability-driven conglomerate across multiple sectors including readymade garment (RMG), accessories, steel, logistics, textiles, banking, and real estate since 1997. Building upon the visionary legacy of his father, renowned industrialist Khalilur Rahman, Salim has transformed the conglomerate into global brand over the years. He currently serves as the First Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). In an interview with the Daily Sun’s Nur Uddin Alamgir, Salim discusses the current state of the RMG industry, impacts of the US reciprocal tariff hike, as well as challenges, potentials and strategies needed to achieve the $100 billion export target in the years ahead.

daily sun : How is Bangladesh’s garment industry faring after the US imposed reciprocal tariff hike?

Salim Rahman: Business in the RMG sector is a long-term process. Any policy or tariff change typically takes one or two seasons to show its full impact. If a decision is made after orders have already been placed, it won’t affect business immediately.

Overall, the business climate is not very good. The new tariff is like adding salt to a wound. The real effect of the tariff hike is needed to be seen. Negotiations are going on, and the competitor countries like Vietnam, Cambodia and India are still at the table. Despite the challenges, Bangladesh remains a reliable sourcing destination for certain nations.

daily sun : What steps should Bangladesh prioritise at this point?

Salim Rahman: We must continue negotiations. The effort made by our negotiation team to reduce the tariff from 35% to 20% was highly commendable.

If we suddenly learn that India’s tariff has been cut by 10% or Vietnam’s and Cambodia’s by another 5%, the scenario will be changed overnight. Right now, we are in a manageable position, but we may not be tomorrow.

Although there is no clear way out, we must keep negotiating and find ways to “keep our noses above water?” The situation remains unpredictable.

daily sun : What challenges lie ahead?

Salim Rahman: Europe and the US are our major export markets. When the USA imposed tariff, Bangladesh initially stood in a relatively good position compared to competitors. But, now those competitors including China are seeking alternative markets in Europe and others, increasing pressure on our pricing.

The tariff hike has also created complications in the US market. Since the stakeholders, especially long-term buyers who cannot increase their retail price, are asking for sharing the additional cost. This means that although export volume might rise, pricing falls into challenge as someone has to absorb the 20% hike.

daily sun : How would you define Bangladesh’s global standing in the RMG industry?

Salim Rahman: No business can ever claim it’s in a good position because business is ever changeable. It depends on how well-prepared we are and how effectively we market our product, logistic, environment, people and even country.

It’s about marketing and building a narrative. You must give your buyers confidence that you and your country are reliable and responsible partners.

Costs also have narrative that includes the product, port efficiency and nation’s image.

However, Bangladesh has been a reliable sourcing destination for buyers for over 40 years and that trust remains intact.

daily sun : What are the major barriers to investment and industrial growth in Bangladesh?

Salim Rahman: We can definitely reach $100 billion in export. We have the aspirations and capacity. But, the reality is harsh – a vessel takes seven days to berth from the outer anchorage of Chattogram Port. If exports rise to $100 billion, will it take 70 days then? Have we developed new port or enhanced efficiency? Why is Chattogram airport still underutilised?

Infrastructure bottlenecks, lack of investor confidence, energy insecurity are the biggest challenges to industrial expansion in the country.

Doing business in Bangladesh is still too difficult. Some entrepreneurs face hardship not because of their own faults but due to systematic problems.

daily sun : Why is Chattogram lagging behind?

Salim Rahman: Lack of gas supply for 12 years has severely hindered Chattogram’s growth. It is not just industries – human capital has also shifted elsewhere.

Once, Chattogram contributed around 40% of country’s garment export. Now, the quantity has plummeted to mere 7%. We are setting up many EPZs, but without ensuring basic utilities and facilities.

Policy support must be complemented by infrastructure development, especially at ports and airports. Build it and the investors will come. I have been hearing about the Bay Terminal for 20 years, but it was needed the day before yesterday.

Many factories are shutting down due to lack of energy and cost of doing business. Without energy security, a country cannot move forward.

daily sun : What policy supports are required?

Salim Rahman: Ease of doing business in Bangladesh remains poor and stagnant. It must improve.

The FOC (free of cost) facilities are crucial for the RMG sector and expansion of the forward linkage industries. The policy is also essential for SMEs.

daily sun : What is the way forward to address the challenges? 

Salim Rahman: Build infrastructure, investors and buyers will come. Our young entrepreneurs are highly dynamic. Don’t ask a fund manager how port is doing – ask a port user doing. Address the crisis.

Conduct gap analyses, explore new products, and work for extension of products shelf-life while value addition is must to survive.

daily sun : What affect will the port and off-dock tariff increase have on the industry?

Salim Rahman: We are not against the tariff hike, but there must be stakeholder consultation. What additional benefits are we getting in exchange of these higher tariffs? We are already paying more for the existing services.

Compared to other countries, I find service quality poor here. Yet, we have no alternative even if tariffs rise by 100%. Authorities are making profit but remain unaccountable.

In a kitchen market, we get what you pay for – but what’s the justification for these tariff increases? They talk about mordernisation, but what has actually been done over the years?

Mordernisation and efficiency are not destinations – they are ongoing journeys. If authorities proposed a clear roadmap, such as a 5% annual tariff increase against specific service standard, we could plan accordingly and integrate the cost into our business models.

daily sun : How would you justify the move to bring in foreign operators for port terminals?

Salim Rahman: When handing over a terminal, negotiation must focus on improvement and investment. If the operator is only taking over management without commitment of efficiency gain or investment, I am not agreed to pay. Again, efficiency is what matters. Give the operations to whoever can truly enhance efficiency.

daily sun : How do you assess the recent unrest and fire incidents in garment factories?

Salim Rahman: Adams Cap was not a BGMEA member, it was located in CEPZ under BEPZA jurisdiction. We conduct sudden audits for our members.

Fire incidents often occur due to short-circuits or gas leakage. There were about 7,000 such cases last year. It is high time to mordenise and strengthen capabilities.

Fire accident will take place, we must invest in prevention and technology. Poor materials and substandard installations cause the accident mostly. Standarisations and certified installers are crucial, and compliance must be strictly enforced.

Law and order is another concern. Take the example of Pacific Jeans, which is well known worldwide. They have no issue regarding compliance. Why did it have to keep shut for seven days? Why are high-standard factories getting affected, even destroyed? You must ask question – what’s going on?

daily sun : What should relationship between worker and owners be like?

Salim Rahman: There is no issue in the compliant factories – the relationships are good. Recently, problems have arisen in places where compliance is already strong. People need to know what is actually happening there.