Bangladesh’s garment exports continue to grow despite one crisis after another. The sector is ahead of other industries not only in business growth but also in terms of government support.
However, Bangladesh lags behind competing countries in the minimum wages paid to garment workers. Struggling to meet rising living costs amid persistent high inflation, workers have taken to the streets demanding higher wages.
According to data updated last March by Sweden-based H&M Group, one of Bangladesh’s leading buyers of readymade garments, garment workers in all seven countries—China, Cambodia, Indonesia, Vietnam, Pakistan, India and Turkey—receive higher minimum wages than workers in Bangladesh. The minimum wages in four other sectors in Bangladesh—tanneries, shipbreaking, sawmills and construction—are also higher than those in the garment industry.
In the face of workers’ protests, the Ministry of Labour formed a new wage board last Sunday. Protests have nevertheless continued in various industrial areas. Labour leaders say the unrest could have been avoided if the wage board had been formed earlier and the process of setting new wages had begun in time.
Factory owners, on the other hand, argue that workers’ wages are relatively low because of their lower productivity, the low prices of garments and narrow profit margins in garment manufacturing.
The current minimum wage for garment workers is Tk 12,500. The new wage structure came into effect on 1 December 2023. Previously, wage boards were formed every five years. The current BNP government has amended the labour law, reducing the interval for wage revisions to three years. Accordingly, the new wage structure must come into effect from December this year.
Asked for comment, Taslima Akhter, president of Garment Workers’ Solidarity, told Prothom Alo that rising prices of essential goods had made workers’ lives unbearable. They were being forced to cut food expenses.
Not only that, borrowing to meet household costs has also become more common. Workers had taken to the streets because they had reached the end of their tether, she said.
Garment exports on the rise
Bangladesh’s garment exports have grown despite at least seven major challenges over the past decade and a half. The fire at Tazreen Fashions in 2012 and the Rana Plaza collapse the following year caused a temporary downturn in garment exports. However, buyers’ confidence returned as work was undertaken to improve working conditions in garment factories. Exports also increased.
The garment industry subsequently faced a difficult period during the Covid-19 pandemic, but business recovered again. Over the past five years, the sector has sustained its exports despite the Russia-Ukraine war, political changes in the country, US reciprocal tariffs and the ongoing Middle East crisis.
Garment exports nearly doubled between 2011 and 2025. Last year, Bangladesh exported garments worth USD 38.82 billion, up 0.88 per cent from the previous year.
According to World Trade Organization (WTO) data published last July, China had the largest share of the global garment export market last year, at 27.5 per cent. Bangladesh ranked second, with a 6.76 per cent share. Vietnam accounted for 6.53 per cent, India 3 per cent and Turkey 2.3 per cent.
Tk 60 billion in tax concessions
For more than three decades, entrepreneurs in the garment industry have enjoyed various tax benefits. Citing the need to maintain their competitiveness in the global market, factory owners continue to receive tax concessions worth several billions of taka every year.
According to the latest report of the National Board of Revenue (NBR), the garment and textile sectors received corporate tax concessions worth Tk 58.29 billion in fiscal year 2022–23. This is because the garment sector has the lowest corporate tax rate among businesses, at just 12 per cent.
For environmentally friendly factories, the rate is only 10 per cent. Companies in other sectors, however, have to pay corporate tax ranging from 20 to 45 per cent.
Besides income tax concessions, the garment industry also receives cash incentives for exports to various markets. Factory owners also enjoy bonded warehouse facilities.
Under this arrangement, garment manufacturers do not have to pay customs duties or taxes on raw materials such as yarn, fabric and other goods imported from abroad. Only a handful of other sectors, including the leather industry, enjoy bonded warehouse facilities. Other sectors do not receive these benefits.
Wages lower than in competing countries
When the minimum wage of Tk 12,500 came into effect in the garment industry in December 2023, the exchange rate was Tk 110.50 to the US dollar. At that rate, the minimum wage was equivalent to USD 113. Over the past three years, the price of the dollar has risen to Tk 124. This means the minimum wage is now equivalent to USD 101.
According to H&M Group’s data from last March, however, the minimum wage for garment workers in Bangladesh is USD 102. In neighbouring India, it is USD 124. The figures for other countries are USD 294 in China, USD 208 in Cambodia, USD 172 in Indonesia, USD 163 in Vietnam and USD 135 in Pakistan.
Asked why wages are lower, Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Prothom Alo, "Unlike competing countries, Bangladesh has the position of helper in the garment industry. Even people with no work experience can be recruited to this position at Tk 12,500."
"Machine operators earn Tk 18,000 a month without overtime. Experienced workers earn as much as Tk 25,000. Besides, our workers are less productive than those in other countries. The comparatively low wages are also due to the fact that we produce low-priced garments and earn less from cutting and making (CM)," he added.
Cost of living has increased
Although wages in the garment industry were raised three years ago, workers have not benefited because of high inflation. Inflation rose to nearly 9.75 per cent in fiscal year 2023–24. After the government changed in August following the uprising led by students and the public, workers launched a movement demanding higher wages. In response to the movement, workers received a nine per cent annual increment in January last year, instead of five per cent.
Inflation stood at ten per cent in fiscal year 2024–25. It declined somewhat to 8.68 per cent in the outgoing fiscal year. Until last September, wage growth had remained below inflation for 56 consecutive months. After the ongoing Middle East crisis intensified, fuel price increases pushed up the prices of essential goods once again.
A survey by the Bangladesh Bureau of Statistics (BBS), published last month, found that average monthly household expenditure was highest in city corporation areas, at Tk 46,778. The figure was Tk 37,344 for urban households and Tk 32,532 for rural households. At the national level, half of household expenditure goes towards food and the other half towards non-food items.
Asked for comment, Khondaker Golam Moazzem, president of the research organisation Knowledge Hub Institute Trust, told Prothom Alo, "Eleven factors are considered when setting the minimum wage, including the cost of living, inflation, wages in competing countries and productivity."
"Taking these factors into account, we said three years ago that the minimum wage needed to be Tk 17,500 to meet workers’ living costs. Given the high inflation now, there is scope for a substantial increase in wages,” he added.
Khondaker Golam Moazzem also believes that, alongside food and medical allowances, education, transport and recreation allowances should be introduced.