The mixed performance comes as the FY2026-27 budget renews the government’s emphasis on export diversification through measures to improve industrial competitiveness, facilitate trade and provide dedicated financing for expanding exports ahead of Bangladesh’s graduation from least developed country (LDC) status
Representational image/ TBS Collage
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Representational image/ TBS Collage
Highlights:
- China and Middle East exports grew, offsetting declines elsewhere
- India remained largest non-traditional market despite export decline
- Australia, Turkey, and Russia exports showed significant shipment decreases
- Garment exports to non-traditional markets dropped nearly six percent
- China showed stronger product diversification beyond traditional garment exports
- Trade agreements and diversification needed before LDC graduation pressures
Bangladesh’s efforts to diversify exports beyond its traditional Western markets are yielding mixed results, with robust growth in China and several Middle Eastern destinations offset by weakening shipments to major non-traditional markets such as India, Australia, Turkey and Russia, according to the latest Export Promotion Bureau (EPB) data.
Country-wise export data for the July-May period of FY2025-26 show exports to China, Saudi Arabia, the United Arab Emirates, Malaysia and Brazil continued to expand, while several established non-traditional destinations registered declines despite years of efforts to broaden Bangladesh’s export footprint beyond the European Union, the United States, the United Kingdom and Canada.
The mixed performance comes as the FY2026-27 budget renews the government’s emphasis on export diversification through measures to improve industrial competitiveness, facilitate trade and provide dedicated financing for expanding exports ahead of Bangladesh’s graduation from least developed country (LDC) status.
Infograph: TBS
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Infograph: TBS
China emerged as one of the strongest-performing non-traditional markets during the period. Exports rose 15.76% year-on-year to $742.5 million, driven by woven garments, knitwear, jute and jute products, leather goods and footwear. Saudi Arabia, the UAE, Malaysia and Brazil also recorded positive growth, signaling rising demand across parts of the Middle East, Asia and Latin America.
The broader picture, however, remained uneven.
India retained its position as Bangladesh’s largest non-traditional export destination, with shipments worth $1.61 billion during July-May. However, exports to the neighbouring country declined 3.44% from a year earlier despite growing bilateral trade. Exports to Australia fell 8.62% to $774.04 million, while shipments to Turkey dropped 11.63% to $534.57 million. Exports to Russia also contracted amid continuing geopolitical uncertainty.
The country-level trend was also reflected in Bangladesh’s largest export sector. EPB data compiled by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) show garment exports to non-traditional markets declined 5.95% year-on-year to $5.68 billion during the July-May period.
By comparison, apparel exports to the European Union – Bangladesh’s largest regional market – fell 4.88% to $17.36 billion, while shipments to the US, the country’s largest single export destination, edged down only 0.04% to $7.03 billion. Exports to Canada rose 2.27 % to $1.23 billion, while those to the UK slipped 0.5 % to $4.02 billion. Overall, Bangladesh’s ready-made garment exports declined 3.41 % to $35.31 billion during the period.
The data also indicate that Bangladesh’s export basket in many non-traditional markets remains heavily concentrated in traditional labour-intensive products. India mainly imports garments, jute goods, leather products, cotton products and plastics, while exports to Australia are dominated by apparel and home textiles. Turkey continues to source mostly knitwear, woven garments and jute products.
China stands out as an exception. Alongside garments, Bangladesh has steadily expanded exports of leather goods, footwear and jute products, suggesting greater scope for product diversification in one of Asia’s largest consumer markets.
Mahmud Hasan Khan, president of BGMEA, said non-traditional markets have become increasingly important as Bangladesh prepares for LDC graduation, but exporters continue to face challenges because buyers in many non-traditional markets do not offer export credit facilities.
He said government agencies are working to strengthen Bangladesh’s presence in markets such as Japan and South Korea but warned that market diversification must now move faster than before.
“If we fail to conclude enough trade agreements and strengthen export earnings from non-traditional markets before LDC graduation, the country’s export sector could come under severe pressure,” Mahmud said, adding that sustained government support, improved market access and stronger trade diplomacy would be essential to reduce dependence on traditional destinations.
Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said expanding into new markets requires far more than fiscal incentives.
He pointed to Japan as an example where exporters, industry associations and government agencies spent years building commercial relationships before achieving significant export growth. Similar long-term engagement, he said, is now needed in markets such as India, Australia, China and Russia.
Fazlul also stressed the importance of stronger government-to-government negotiations to address tariff and non-tariff barriers, particularly high import duties in Turkey and longstanding market access challenges in India, arguing that sustained diplomatic engagement is just as important as export incentives.
Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, said Bangladesh’s exporters are facing growing competition as regional rivals such as India and Vietnam move aggressively to secure free trade agreements and deepen their presence in global markets.
He said Bangladesh can no longer rely solely on traditional apparel exports or a handful of established destinations. Sustaining export growth after LDC graduation will require a broader export basket, stronger trade agreements, improvements in productivity and logistics, and a more competitive exchange rate.
The latest EPB data suggest Bangladesh’s export diversification strategy is beginning to deliver results in selected markets, particularly China and parts of the Middle East. However, the uneven performance across many other non-traditional destinations shows the country’s transition beyond its traditional export markets remains incomplete, underscoring the need for deeper product diversification, stronger trade diplomacy and wider market access as Bangladesh prepares for the post-LDC trading regime.