Bangladesh’s ready-made garment industry is facing mounting pressure as the global energy crisis drives up production costs, disrupts factory operations and threatens the country’s competitiveness in international markets. Persistent gas shortages, frequent power cuts and rising diesel prices have created serious challenges for manufacturers struggling to maintain production schedules and meet overseas delivery commitments.

Exporters fear that prolonged disruptions could prompt international buyers to shift orders to competing manufacturing destinations, including Vietnam, Cambodia and Pakistan, potentially undermining Bangladesh’s position as one of the world’s leading garment exporters.

A report published by New York-based TIME magazine on Tuesday (20 October) highlighted the growing difficulties confronting Bangladesh’s garment sector, which remains a cornerstone of the national economy.

According to the report, the conflicts involving Ukraine and Iran have exposed vulnerabilities in global energy supply chains, with countries heavily dependent on imported fuel facing particularly severe consequences.

Since Russia’s invasion of Ukraine, industrial gas prices in Bangladesh have increased by approximately 150 per cent, while diesel prices have risen by nearly 70 per cent. The situation has deteriorated further following the outbreak of war involving Iran, with spot-market prices for liquefied natural gas (LNG) almost tripling.

These developments have placed considerable financial strain on Bangladesh’s manufacturing sector, where reliable access to electricity and gas is essential for maintaining uninterrupted production.

The report identified longstanding weaknesses in energy infrastructure and insufficient investment in domestic gas exploration as additional factors contributing to the crisis.

Bangladesh depends on imports from the Middle East for nearly half of its energy requirements, leaving the country particularly vulnerable to regional instability and disruptions along major international shipping routes.

Tensions surrounding the Strait of Hormuz, a strategically important passage for global energy shipments, have complicated the situation. An additional setback came when a fire affected one of Bangladesh’s two floating LNG terminals.

Together, these disruptions contributed to an 83 per cent decline in LNG imports during July and August, according to TIME.

The resulting shortages have affected electricity generation and distribution across the country, including major industrial centres where garment factories operate.

Bangladesh’s electricity shortfall has exceeded 3,000 megawatts, prompting the government to introduce restrictions on power consumption in various sectors.

While urban industrial areas have experienced repeated interruptions, some rural communities have reportedly endured electricity outages lasting as long as 16 hours a day.

For garment manufacturers, such disruptions can have immediate consequences. Production lines depend on a consistent electricity supply, while several stages of textile processing, including dyeing, washing and finishing, require substantial energy inputs.

When grid electricity becomes unavailable, factories frequently turn to diesel-powered generators to maintain operations. However, the sharp increase in diesel prices has made this alternative significantly more expensive.

Manufacturers are consequently facing a difficult combination of higher operating expenses and uncertainty over energy availability.

The challenges are particularly evident at Ha-Meem Group, one of Bangladesh’s major garment manufacturers and exporters.

Tanul Chakraborty, the company’s head of power, energy and environmental sustainability, told TIME that Bangladesh’s electricity supply frequently experiences interruptions.

He explained that gas remains the most dependable energy source for industrial operations, followed by diesel, while electricity supplied through the national grid ranks third in terms of reliability.

Ha-Meem Group employs approximately 90,000 workers and produces around 9.3 million garments every month.

Its international customers include prominent American clothing retailers such as Gap, American Eagle and JCPenney.

Maintaining productivity despite the energy crisis has become a central priority for the company, as manufacturers face considerable pressure to deliver products within agreed deadlines.

Any prolonged disruption could affect relationships with international buyers, particularly when competing countries can offer more predictable production schedules or lower manufacturing costs.

The challenge is compounded by the competitive nature of the global garment market, where pricing, quality, reliability and delivery times influence purchasing decisions.

Bangladeshi exporters must therefore absorb rising energy expenses while attempting to preserve the cost advantages that have historically helped attract international orders.

Industry observers warn that manufacturers could face increasing pressure on profit margins if production expenses continue rising without corresponding adjustments in the prices paid by overseas buyers.

Smaller factories may be especially exposed because they generally have fewer financial resources to invest in alternative energy arrangements or withstand extended periods of disruption.

Larger manufacturers may have greater capacity to operate backup generators and manage fuel purchases, but prolonged energy shortages can still affect their overall efficiency and operating costs.

The implications extend far beyond individual businesses.

Bangladesh’s ready-made garment industry accounts for more than 80 per cent of the country’s export earnings and directly employs approximately four million people.

The sector also supports numerous associated industries, including textile manufacturing, packaging, transportation and the supply of garment accessories.

A sustained slowdown in garment production could therefore affect employment, household incomes and economic activity across a much wider network of businesses.

Workers and their families could become increasingly vulnerable if factories experience reduced production, financial difficulties or uncertainty over future orders.

The wider economic situation has also raised concerns about food security.

According to international food security observers cited in the report, approximately 18.1 million people in Bangladesh could face food insecurity in the near future.

Although food insecurity is influenced by several economic and social factors, rising energy costs can contribute to broader financial pressures by increasing transportation and production expenses.

For a country where export earnings and industrial employment play important roles in supporting household livelihoods, continued instability in the energy sector presents a significant economic challenge.

Against this backdrop, the government has introduced a new energy roadmap aimed at strengthening domestic production capacity and improving the reliability of electricity supplies.

The plan, unveiled in September, includes proposals to add 12,940 megawatts of electricity generation capacity through solar and coal-based projects.

It also outlines measures to modernise the electricity distribution network and expand domestic gas exploration to reduce pressure on imported energy supplies.

A major component involves drilling 300 exploration wells to increase access to domestic gas resources.

According to the report, 31 of these wells have already been drilled.

The proposed expansion reflects the government’s attempt to address longstanding structural weaknesses in the energy sector while responding to the immediate pressures created by international developments.

However, major energy projects generally require substantial investment, technical preparation and implementation time before their benefits can be fully realised.

As a result, improvements in generation capacity and domestic fuel availability may not provide immediate relief to factories currently struggling with shortages.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), expressed optimism about the government’s proposed measures.

He indicated that the industry welcomed the new energy plan and hoped that Bangladesh’s electricity shortages could be resolved within the next three to four years.

Such an improvement would be particularly important for garment exporters, whose ability to secure and retain international orders depends heavily on stable production conditions.

Yet the immediate outlook remains uncertain.

Continued conflict in the Middle East could lead to further disruptions in energy shipments, higher fuel import bills and increased transportation costs.

Any additional increase in global energy prices would place further pressure on Bangladesh’s manufacturers, particularly those already operating with limited financial flexibility.

Higher freight expenses could also affect the overall cost of delivering finished garments to international markets, adding another layer of uncertainty for exporters.

Fazlee Shamim Ehsan, managing director of Fatullah Apparels, acknowledged the difficulties confronting the government.

He said the current circumstances had made managing the energy situation particularly challenging and suggested that conditions would have been considerably better without the conflict in the Middle East.

His assessment reflects the broader concerns of manufacturers who recognise that Bangladesh’s energy difficulties are being intensified by geopolitical developments beyond the country’s direct control.

Nevertheless, the crisis has also highlighted the importance of strengthening domestic energy security and reducing exposure to international supply disruptions.

For Bangladesh’s garment industry, maintaining reliable electricity and gas supplies is no longer simply an operational concern. It is increasingly linked to the country’s ability to remain competitive in a rapidly changing global manufacturing environment.

International buyers have several alternative sourcing destinations, and persistent uncertainty over production schedules could weaken Bangladesh’s attractiveness as a dependable supplier.

The industry must therefore balance immediate efforts to keep factories running with the longer-term need for more reliable and affordable energy.

The government’s proposed investments in electricity generation, distribution infrastructure and gas exploration may help address some of these challenges, provided the projects are implemented effectively.

For now, manufacturers remain under pressure to protect existing orders, control rising costs and maintain delivery commitments despite continuing disruptions.

With millions of jobs and a substantial share of national export earnings dependent on garment manufacturing, the consequences of prolonged energy instability could extend across Bangladesh’s wider economy.

The coming years will be crucial in determining whether the country can strengthen its energy infrastructure quickly enough to safeguard industrial production and preserve its position in the fiercely competitive international apparel market.