Adapting to Shifting Apparel Industry Trends

The international garment sector is currently undergoing a transformation driven by evolving apparel industry trends. Factors such as new regional economic agreements, changes in tariff regulations, and the widespread adoption of diversification strategies are prompting brands to look beyond traditional hubs. Consequently, there is an increasing necessity for a global sourcing strategy that prioritizes agility and multi-country operations. This strategic partnership is designed to address these needs by offering a more resilient and scalable platform for retailers worldwide.

PDS Limited currently manages a Gross Merchandise Value exceeding USD 2.2 billion. The company offers comprehensive supply chain solutions that encompass design-led sourcing, product development, and brand management. By integrating these services with large-scale production, the company aims to provide a seamless experience for global fashion brands.

Leadership Perspectives on the Manufacturing Ecosystem

Pallak Seth, Executive Vice Chairman of PDS Limited, emphasized that manufacturing should be viewed as a strategic capability rather than just a matter of volume. He noted that the collaboration with Busana Apparel Group aligns two complementary platforms to build a more effective manufacturing ecosystem. According to Seth, this expansion allows the organization to offer customers improved flexibility, innovation, and speed within a volatile market environment.

Sanjay Jain, Group CEO of PDS Limited, highlighted the evolution of their manufacturing arm. He stated that what began as a support function for their sourcing operations has grown into a primary business unit. This growth has been fueled by consistent investments in technology and operational excellence. Jain remarked that the new alliance with Busana Apparel Group is a vital step in strengthening their ability to provide speed-to-market and reliability for global retailers.

Operational Excellence and Global Reach

Busana Apparel Group maintains a strong reputation, generating annual revenues in excess of USD 500 million. While headquartered in Indonesia, the group has established a presence in several other nations, including India, Bangladesh, Nicaragua, Honduras, and Italy. This wide geographic reach is a cornerstone of their global sourcing strategy.

Maniwanen Marimutu, Chairman of Busana Apparel Group, stated that the future of the industry belongs to entities that can combine manufacturing excellence with a broad global reach. He expressed that the partnership with PDS Limited creates an end-to-end platform capable of meeting the sophisticated requirements of modern brands. Sunil Shewakramani, CEO of Busana Apparel Group, added that the partnership positions both companies to deliver better scale and innovation across multiple sourcing destinations, supporting the next generation of global apparel manufacturing.

Core Objectives of the Collaboration

The two organizations intend to jointly pursue opportunities with international brands that are looking to diversify their production footprints. By combining their expertise in design and technical innovation, the partnership aims to deliver several key advantages:

The collaboration focuses on providing a diversified manufacturing base and a larger production scale. It also aims to facilitate faster speed-to-market through an integrated network while enhancing supply chain solutions through risk diversification and world-class innovation. This strategic partnership ensures that both entities remain at the forefront of the industry by leveraging their collective strengths in manufacturing and customer engagement.

Addressing Disparities in Government Contracts

According to a recently released position paper, UK textile manufacturing firms are often sidelined during the bidding process for government contracts. This occurs even when these companies provide high-quality products that remain competitive on an international scale. The UKFT highlighted a notable discrepancy: while domestic manufacturers successfully supply technical and defense textiles to various NATO partners, they frequently encounter obstacles when attempting to secure similar agreements within their home market.

Proposed Strategic Recommendations

To rectify these issues, the UKFT has outlined several critical recommendations aimed at the Treasury and procurement officials. These include:

1. Reforming Treasury value-for-money guidance to account for long-term economic value.
2. Establishing greater recognition for strategic manufacturing sectors.
3. Improving transparency throughout the public procurement lifecycle.
4. Strengthening the engagement between government departments and industrial partners.
5. Increasing the weighting of domestic manufacturing capability during the contract award process.

Broader Implications for the UK Fashion Industry

While the immediate focus of the report centers on defense-related textiles, the UKFT noted that the barriers identified are prevalent across the wider UK fashion industry and general manufacturing sectors. By addressing these systemic hurdles, the organization believes the government can better support supply chain resilience and foster an environment conducive to long-term investment and innovation. The association is currently collaborating with partners, including the CBI, to advocate for a more supportive regulatory landscape.

A Call for Urgent Policy Change

Adam Mansell, Chief Executive Officer of UKFT, emphasized the necessity of these changes for the future of the sector. He stated that the campaign to alter public procurement rules is a vital step in educating the government on the advantages of purchasing British-made goods. Mansell indicated that the association intends to brief the new Prime Minister on the urgent need for reform to bolster the UK fashion industry and the wider economy.

The UKFT remains committed to working alongside ministers and Parliament to ensure that future UK textile manufacturing policy delivers genuine value for taxpayers and provides a stable foundation for British manufacturing. The organization continues to push for government contracts that prioritize the long-term health of the United Kingdom’s industrial base.

The evolution of Cambodia apparel exports has been marked by a steady increase in volume and value. While basic knitwear remains a staple, the integration of advanced production techniques has allowed factories to handle more sophisticated orders. This transition is a critical element of the broader garment industry growth observed across the region, as international buyers seek suppliers capable of delivering diverse product categories under one roof.

Strategic Framework for Industrial Advancement

To support this transition, the government has implemented the Cambodia Garment, Footwear and Travel Goods Sector Development Strategy 2022-2027. This textile sector strategy provides a roadmap for upgrading the industrial base, focusing on human resource development and the improvement of working conditions. By aligning local capabilities with international standards, the strategy aims to attract higher levels of foreign direct investment into specialized manufacturing segments.

A central pillar of this textile sector strategy is the promotion of sustainable manufacturing practices. Global brands are increasingly demanding transparency and environmental responsibility from their partners. Consequently, factories in Cambodia are adopting energy-efficient technologies and waste reduction protocols to meet these rigorous compliance requirements. The adoption of sustainable manufacturing is no longer optional but a necessity for maintaining long-term partnerships with major Western retailers.

Trade Agreements and Market Expansion

The success of Cambodia garment diversification is also tied to the country’s participation in various regional trade pacts. Agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Cambodia-China Free Trade Agreement (CCFTA) have opened new avenues for trade. These frameworks facilitate easier access to raw materials and provide preferential tariffs for Cambodia apparel exports, making the nation’s goods more competitive against other manufacturing hubs.

Despite the positive trajectory of garment industry growth, the sector faces ongoing challenges, including fluctuating energy costs and logistical bottlenecks. However, the continued emphasis on product diversification and the modernization of infrastructure are expected to mitigate these risks. By focusing on high-margin products and operational efficiency, the industry is positioning itself to remain a vital contributor to the national economy. The ongoing Cambodia garment diversification efforts reflect a maturing market that is adapting to the complexities of modern global trade.

The Bangladesh garment factory safety action affects HB Fashions, HKTG Garments, and Chumki Apparels, all of which operate from a six-storey commercial building located on Colonel Jones Road in Chattogram.

According to official sources, the production halt is a precautionary measure introduced after technical inspections identified potential structural weaknesses that require further evaluation and corrective work before manufacturing can safely resume.

The decision followed a meeting of the Regional Crisis Prevention Committee held on 2 July at the Chattogram Circuit House. During the meeting, the RMG Sustainability Council (RSC) presented findings from its engineering assessment, warning that continued factory operations inside the building could pose risks to both workers and property.

Based on its evaluation, the RSC recommended a series of immediate safety measures. These include vacating structurally vulnerable sections of the building, reducing excessive structural loads, installing temporary support systems, and suspending manufacturing activities until repair work is completed and a fresh technical inspection confirms the building is safe for occupancy.

HB Fashions occupies the entire six-storey premises, while HKTG Garments and Chumki Apparels operate from the ground, first and second floors.

Reports indicate that Chumki Apparels has remained closed for nearly seven years because of financial challenges. The remaining two factories together employ approximately 1,300 workers, many of whom have been affected by the temporary suspension.

Before issuing the formal closure order, Bangladesh’s Department of Inspection for Factories and Establishments (DIFE) had already instructed the factories to suspend production until the building’s structural integrity could be verified.

Chattogram Deputy Commissioner Mohammad Zahidul Islam Miah stressed that protecting workers must remain the highest priority, noting that Bangladesh cannot risk repeating industrial disasters such as the Rana Plaza tragedy. He said production would only be allowed to restart after the building had been repaired and officially certified as safe.

DIFE Deputy Inspector General Mohammad Mahbubul Hasan also supported the decision, stating that the suspension was necessary to ensure worker safety.

Meanwhile, HKTG Garments Managing Director Enamul Aziz Chowdhury expressed concern over the immediate shutdown, citing uncertainty for around 300 to 350 employees. He said approximately 70% to 80% of the renovation work had already been completed and that production had already been shifted away from areas identified as unsafe.

Mohammad Ali Shaheen, Advocacy Head at IPSA, urged authorities to balance worker protection with employment security by ensuring manufacturing activities could continue wherever safe working conditions are available.

Chumki Apparels Managing Director Abu Haider Chowdhury stated that renovation work is progressing according to the committee’s recommendations and confirmed the factory plans to resume operations once all required repairs have been completed and safety approval is obtained.

The Bangladesh garment factory safety action highlights the country’s continued efforts to strengthen industrial safety standards while protecting workers and avoiding structural failures within one of its most important export industries.

Strengthening the Better Work Jordan Initiative

Through this ILO partnership, both entities aim to improve the monitoring of factory conditions and the enforcement of national regulations. The Jordan ministry is set to take a more prominent role in overseeing these processes, which include rigorous inspections and technical support for manufacturing facilities. By prioritizing labor standards, the agreement seeks to maintain the competitive edge of the national export sector while safeguarding the rights of all employees involved in production.

The Jordan decent work program remains a cornerstone of the country’s economic strategy, particularly in its efforts to provide equitable opportunities for both local and migrant workers. The ILO partnership provides the necessary technical expertise to help factories achieve better workplace compliance, which in turn leads to improved productivity and a more resilient garment industry. This transition phase is critical for embedding these practices within the local institutional framework.

Focus on Compliance and Gender Equality

A significant portion of the agreement addresses the need for gender equality and the prevention of workplace harassment. The Jordan ministry and its international partners are committed to creating a safe and inclusive environment that adheres to global labor standards. This includes specialized training programs and the implementation of transparent reporting mechanisms to ensure that workplace compliance is handled with the highest level of integrity.

The collaboration also aligns with the broader Decent Work Country Programme, which serves as a roadmap for sustainable economic growth and social justice. By focusing on the garment industry, Jordan continues to demonstrate its commitment to international labor conventions and the well-being of its industrial workforce.

While initial assessments attributed earlier losses to logistics and weather-related issues, current figures for April and May suggest deeper structural textile industry challenges. Industry experts point to a critical garment manufacturing labor deficit as the primary driver behind the reduced output. Redouane Lachgar, an industrial strategy consultant, noted that approximately 16,000 machine operator positions remain unfilled across the country. This Morocco textile export decline is largely a result of this labor gap, which directly hinders the ability of factories to meet delivery schedules and fulfill international orders.

Economic Impact of the Labor Shortage

The garment production shortfall resulting from these vacancies has substantial financial implications. According to estimates provided by Lachgar, the lack of 16,000 operators—calculated against a standard 191-hour monthly work schedule and an average production rate of three items per hour—could result in a loss of 46 million garments over a five-month period. If this trend persists, the annualized loss in unrealized production is projected to reach approximately 5.5 billion dirhams.

The Morocco leather exports sector and the broader garment industry are currently caught in a structural bind. The root of the labor crisis lies in the disparity between urban living costs and industry wages. In major manufacturing hubs such as Tangier and Casablanca, monthly salaries are often capped at 3,600 dirhams. For workers relocating from other regions, the costs of housing, transportation, and daily essentials frequently exhaust their entire earnings, removing the financial incentive for employment in these urban centers.

Maintaining Global Competitiveness

The Morocco textile export decline poses a threat to the nation’s standing as a premier nearshoring destination for European clients. The industry’s primary advantage has traditionally been its speed and flexibility. However, when manufacturers lack the necessary garment manufacturing labor to handle peak demand, international buyers may seek faster alternatives in competing markets.

Addressing these textile industry challenges is becoming increasingly urgent. Employers face the difficult task of remaining price-competitive for global buyers while dealing with a workforce that cannot sustain itself on current wage levels. As Morocco textile exports and Morocco leather exports continue to struggle, the garment production shortfall remains a mechanical constraint that requires immediate attention to prevent the decline from becoming a permanent fixture of the economic landscape.

The sector accounts for more than 80 percent of national export earnings and provides employment to over four million people, the majority of them women. Long seen as a driver of growth, poverty reduction, and women’s empowerment, the industry is now under severe strain, raising questions about sustainability and broader economic effects.

Weaker Orders as Global Demand Cools

A slowdown across key markets including the United States, the European Union, and Canada has curbed apparel spending amid high inflation. Retailers have trimmed new orders, and many Bangladeshi suppliers report smaller purchase volumes than in prior years. Buyers are also seeking lower prices, faster turnarounds, and higher compliance standards, which manufacturers say are difficult to meet while remaining profitable.

Although export figures have occasionally shown signs of recovery, order volumes remain uneven. Small and medium-sized factories are finding it especially hard to compete with larger players that have stronger finances and long-standing relationships with global brands.

Costs Climb, Margins Shrink

Input costs have risen sharply. Imported raw materials such as cotton, dyes, chemicals, and accessories have grown more expensive due to global inflation and currency movements. Energy costs have also increased. Electricity shortages, higher fuel prices, and elevated transportation expenses have forced many facilities to run costly backup generators, further tightening margins.

Depreciation of the local currency has made imports pricier. While a weaker currency can support exports, manufacturers say the benefit has been offset by higher input costs. Factory owners also report that international buyers have been slow to revise purchasing prices, leaving producers to absorb much of the increase.

Wages, Living Costs, and Labor Unrest

A recent rise in the minimum wage has been welcomed by labor advocates as a step toward better living standards. Factory owners, however, say the adjustment adds to operating costs at a difficult time. Many workers argue that inflation in essentials food, rent, transport, and healthcare continues to erode purchasing power.

As a result, demands for improved pay, safer conditions, and timely payments have intensified. Labor demonstrations and temporary factory closures have disrupted production schedules. Employers cite financial pressures from declining orders and higher costs. Striking a balance between worker welfare and business sustainability remains one of the sector’s most complex challenges, with Bangladesh RMG labor unrest drawing heightened attention.

Layoffs and Factory Closures

Financial strain has led to workforce reductions across numerous facilities. Some manufacturers have implemented temporary measures, while others have shuttered production units. Smaller factories, often operating with limited reserves, have been particularly vulnerable. Without sufficient working capital or affordable credit, extended periods of weak demand have proven difficult to withstand.

The effects reach far beyond factory floors. Thousands of workers have lost primary sources of income, and entire communities feel the impact. Because women make up most of the workforce, the consequences of layoffs have been especially acute for households reliant on their earnings. The rise in layoffs has deepened financial uncertainty for many families.

Supply Chain Strains and Delivery Risks

Ongoing global supply chain disruptions continue to unsettle production planning. Delays in receiving imported raw materials have forced shipment postponements and renegotiation of delivery dates. In some trade routes, transportation costs remain above pre-pandemic levels. Port congestion, logistical inefficiencies, and geopolitical uncertainties complicate international shipments.

Manufacturers face the dual challenge of meeting strict deadlines while managing late arrivals and higher freight. Failure to deliver on time can trigger penalties or jeopardize future contracts. These supply chain headwinds add further pressure to already thin margins.

Intensifying Regional Competition

Bangladesh remains among the world’s top apparel exporters, yet competition has grown from Vietnam, India, Cambodia, Indonesia, and Turkey. Rival producers have invested in automation, technology, and end-to-end supply chain modernization, while moving into higher-value categories.

Bangladesh’s traditional advantages an abundant workforce and competitive costs have narrowed amid rising wages and expenses. Industry voices emphasize the need to progress beyond basic production into product diversification, innovation, branding, and advanced textile capabilities to maintain competitiveness.

Progress in Sustainability and Green Manufacturing

Despite the challenges, Bangladesh has made notable gains in sustainability. The country is home to many of the highest-rated green garment factories globally. These facilities employ energy-efficient technologies, water recycling, and environmentally responsible processes, which are increasingly favored by international buyers focused on strong environmental and social compliance.

Such investment enhances reputation and can improve long-term competitiveness by reducing operating costs and attracting premium orders. However, building and upgrading green facilities demands significant capital, which is difficult for smaller manufacturers facing reduced revenues.

Policy Support and Industry Priorities

Authorities have introduced support measures during difficult periods, including stimulus packages, export incentives, low-interest financing, and policy steps aimed at competitiveness. Business groups have called for simpler export procedures, improved access to credit, more reliable energy supplies, and stronger trade agreements.

Industry leaders also point to infrastructure upgrades ports, transport networks and vocational training to bolster productivity and reduce costs. Many economists note that coordinated action among government agencies, factory owners, labor organizations, and international buyers is important for long-term resilience.

Digital Tools and Automation

Technological change is reshaping production. Factories are gradually adopting automated cutting, digital design tools, artificial intelligence, robotics, and real-time monitoring systems. These tools help improve efficiency, reduce waste, and raise quality.

At the same time, increased automation can limit demand for lower-skilled roles. Retraining and upskilling are therefore essential so workers can adapt to more technology-driven processes. Investment in education, technical competencies, and digital literacy is seen as key to preparing the workforce for evolving manufacturing needs.

The Human Cost

Behind every closure is a personal story of hardship. Workers who lose jobs often struggle to cover basic expenses. Limited qualifications or specialized experience can make it difficult to find new employment. Some people migrate in search of work, while others return to rural communities where opportunities are scarce. The wave of layoffs has added to these pressures, and Bangladesh RMG labor unrest continues to reflect the strain felt across the sector.

Proposed changes to key inputs

In the national budget speech, the finance minister proposed a 5.0 per cent import duty on polyester staple fibre and an increase in the import duty on PVC resin and PET resin to 10 per cent from the existing 5.0 per cent, citing the need to protect domestic industry. These inputs are widely used in MMF garments production, and manufacturers said the timing is sensitive as demand patterns evolve.

Industry response and export focus

According to industry insiders, the proposal comes as Bangladesh steps up its focus on MMF-based production to align with changing global apparel demand, including Western markets where consumers are moving away from cotton garments. With apparel exports under pressure from weaker global demand and intensifying competition, expanding MMF garments production has been described by stakeholders as essential for sustaining export growth and competitiveness across the Bangladesh textile industry.

Export mix and market trends

Bangladesh remains heavily reliant on cotton-based apparel, which accounts for more than 70 per cent of total garment exports. Globally, around 70 per cent of apparel demand is for MMF-based products, underscoring a mismatch between the country’s export profile and international market trends. Industry data show Bangladesh’s cotton apparel exports rose from about US$3 billion in 2001 to roughly US$33 billion in 2021. Over the same period, exports of MMF apparel increased by about US$8 billion, reflecting steady progress in non-cotton categories within the Bangladesh textile industry.

Competitive landscape and projections

Industry insiders noted that despite Bangladesh’s strong standing in cotton apparel, there is considerable room for growth in MMF and blended garments, where the country’s global market share is estimated at only 5–6 per cent compared with China’s 36 per cent. Studies also indicate that competitors such as Vietnam have built a strong foothold in MMF and blended apparel, particularly in the United States and Japan. According to industry estimates, Bangladesh could generate between US$19 billion and US$20 billion in MMF garment exports over the next five to ten years if constraints are addressed and the sector receives adequate policy support.

Manufacturers added that the proposed rise in duties on PET resin and PVC resin, combined with the new 5.0 per cent levy on polyester staple fibre, may raise costs for MMF garments producers. Stakeholders emphasized that the Bangladesh MMF import duty plan will be closely watched as the sector works to align with global demand and sustain competitiveness.

Employer promises, escalation, and resolution

Initial efforts to secure payment resulted in an employer promise to address the wage arrears, but WRC states that commitment was not honoured. After the closure became public, the WRC engaged SAE-A Global Trading, a Seoul-based apparel producer that had supplied Target from KOA Modas, to assume responsibility for the outstanding payments. Following extended discussions involving factory unions, SAE-A agreed to cover 95% of the total owed to workers; WRC said the remaining 5% may be recovered through the sale of KOA Modas’s remaining inventory and equipment.

The WRC characterized SAE-A’s action as the largest single-factory back pay settlement for garment workers ever recorded in Central America. WRC noted: “SAE-A has joined other leading apparel companies like American Eagle Outfitters, Gildan, and PVH, that have responded to violations documented by the WRC in their supply chains by using their own resources to pay workers money they were legally owed.”

Ongoing concerns

While the settlement addresses immediate back pay and severance violations, the WRC highlighted continuing concerns about social security contributions that were allegedly withheld from employees’ pay. The WRC warned that such withheld social security contributions could jeopardise pensions for many now-retired staff. The organisation added: “Sabrina Chang, the owner of KOA Modas, had a track record that long preceded the factory’s closure of stealing not only its workers’ wages, but also the social security contributions it deducted from their paychecks.”

Context and implications

KOA Modas continued to supply Target up until the factory closure, and SAE-A had acted as Target’s direct supplier for products manufactured at KOA. The case underscores issues raised by the WRC regarding employer accountability in the apparel supply chain, the impact of factory closure on workers, and the need to secure wage arrears and severance for affected employees.

In the proposed budget for the 2026-27 fiscal year, the government suggested eliminating the 30 percent value-addition rule to streamline business operations. However, Showkat Aziz Russell, president of the association, argued that this measure could jeopardize approximately $23 billion in existing investments within the industry. He noted that maintaining the Textile Value-Addition Rule is essential for preserving national competitiveness as the country prepares for LDC graduation.

Economic Pressures and Industry Challenges

The primary textile sector is currently facing significant operational hurdles. According to data provided by the association, 114 out of 234 spinning mills owned by its members have ceased operations since 2019. The facilities that remain active are reportedly running at only 60 to 70 percent of their total capacity. These difficulties are attributed to inconsistent gas supplies and the increasing presence of Indian yarn imports in the local market.

Reports indicate that Indian yarn imports saw a 22.07 percent year-on-year increase, reaching a value of $1.79 billion in the 2024-25 fiscal year. This follows a previous year where imports stood at $1.48 billion. Russell highlighted that regional competitors benefit from substantial government backing, including capital investment subsidies and interest assistance, allowing them to offer lower prices that pressure local textile millers.

Strategic Importance of Local Production

Industry experts emphasize that relying on foreign supply chains poses a risk of disruption. There have been instances where exporters from neighboring regions prioritized other international markets without notice, leading to local shortages and price spikes. As the nation approaches LDC graduation, meeting double-transformation requirements will become vital to retaining trade benefits. This transition necessitates a robust domestic capacity for producing garment raw materials to ensure long-term stability.

Proposed Fiscal Adjustments for Growth

To bolster the industry, textile millers have proposed a reduction in the corporate tax rate. Currently set at 27.5 percent, the association is seeking a decrease to 12 percent, maintained until 2030. This adjustment is intended to attract foreign direct investment and address what the association describes as a discriminatory tax structure. Currently, export-oriented garment factories benefit from rates between 10 and 12 percent, while the primary textile sector faces higher obligations following the expiration of a previous tax benefit in mid-2025.

The association maintains that the Textile Value-Addition Rule must remain in place to safeguard the massive investments made in the country and to ensure that the domestic industry remains a cornerstone of the national economy during its upcoming developmental transitions.