Over 400 garment factories closed in three years: Minister

File Photo: Collected

More than 400 garment factories shut down in Bangladesh over the three years from July 2023 to June 2026, Commerce Minister Khandakar Abdul Muktadir said on Thursday.

Of them, 282 were members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and 123 were members of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), he said.

The minister disclosed the information while replying to a question from MP Md Ruhul Amin during the question-answer session at the Jatiya Sangsad. Speaker Hafiz Uddin Ahmad presided over the session.

Muktadir said the process of collecting the names of the closed factories was under way.

He cited several reasons for the closures, including the COVID-19 pandemic, the Russia-Ukraine war, the Israel-Palestine war in the Middle East, the global economic slowdown, political instability in the country, a liquidity crisis in the banking sector caused by money laundering, free trade agreements between India and Vietnam and European countries, and reluctance among foreign buyers to place export orders with small and medium-sized factories.

Elaborating on the steps taken by the government to develop the garment sector, the minister said that a 1.50% alternative cash incentive is being provided instead of bonded warehouse and duty drawback facilities to the export-oriented domestic textile sector to help Bangladesh retain its share of the global apparel market.

An additional 0.50% special incentive, on top of the existing 1.50%, is being provided to textile exporters in the eurozone, he said.

Besides, the minister said an additional 3% incentive is being provided to small and medium-sized enterprises (SMEs) involved in the export-oriented garment sector (knit, woven and sweater), along with a special 0.30% cash incentive for the garment sector.