How Bangladesh’s Garment Suppliers Are Being ‘Squeezed Dry’

How Bangladesh’s Garment Suppliers Are Being ‘Squeezed Dry’ Sourcing Journal · Munir Uz Zaman/AFP via Getty Images Jasmin Malik Chua Sat, May 23, 2026 at 12:00 AM GMT+7 10 min read Faisal Samad knows exactly why global fashion brands keep coming back to Bangladesh. As a member of the Bangladesh Garment Manufacturers & Exporters Association’s board of directors, he sees the appeal up close: its massive scale, a growing network of LEED-certified “green” factories and a reputation as a relatively safe bet after rigorous safety reforms in the wake of the Rana Plaza collapse. On the Line: REI Union Boycotts Anniversary Sale Is Fashion's 'Resilient' Future Leaving Workers Behind? AAFA, FLA Urge Continuation of Better Work Pakistan But the real draw, Samad said, is even simpler. Bangladesh is cheap—and that, he argues, has long come at suppliers’ expense. “Despite Bangladesh evolving over the past 40 years, the buyers’ approach is still all about margins,” he said. “And I think that narrative needs to change.” Samad, who is also managing director of Surma Garments, a knitwear manufacturer outside Dhaka, wasn’t surprised by a new report from Public Eye, a Swiss watchdog group, and the Clean Clothes Campaign, a coalition of trade unions and civil society groups. Using long-term global trade data alongside company-specific figures from retail giants such as Bestseller, Uniqlo buyer Fast Retailing, H&M Group, Primark and Zara owner Inditex, the two organizations found that while nominal prices have edged up in Bangladesh, brands are paying 30 percent less in real terms for a cotton T-shirt than they did 25 years ago—even after adjusting for European inflation. It’s a figure that’s hard to ignore: More than 61 percent of cotton T-shirts imported into the EU are made in Bangladesh for roughly $2 to $3 apiece, though some sell for less than $1. In 2025, the average EU import price stood at only $16 per kilogram, while sourcing prices from Bangladesh, the main supplier to the bloc, were roughly $13 per kilogram. Since a simple T-shirt on the high street can cost between $12 and $20, a single T-shirt sold at retail can bring in enough revenue for a major brand to buy nearly a kilogram of them at factory-floor prices. David Hachfeld, a researcher at Public Eye and one of the report’s co-authors, said that this “sustained erosion” of sourcing value hurts supplier stability, lowers wages and casts serious doubt on the industry’s ethical and sustainability promises. “A transition towards a just and sustainable fashion system based on $2 shirts and other dirt-cheap clothing is impossible,” he said. “Just imagine how much work and material is involved, how fast the production must be and how squeezed prices are.” He said brands often set a retail price first and work backward from there, pushing suppliers to meet a sourcing cost that has little to do with what it actually costs to make the product. Mostafiz Uddin, managing director of Denim Expert, a jean manufacturer in Chittagong, knows this pattern all too well. “What is particularly concerning is that even when input costs rise—whether due to raw materials or significant wage adjustments in producing countries like Bangladesh—these increases are not sustainably reflected in export prices,” he said. “At the factory level, suppliers continue to operate in an intensely competitive environment shaped by constant benchmarking against the lowest-cost sourcing options globally. In such a system, the negotiation power of suppliers remains heavily skewed.” For Md. Rafiqul Islam Rana, an assistant professor of retailing at the University of South Carolina who studies the gap between brand commitments and factory floor realities, the report indicates a deeper problem in apparel sourcing. Brands, he said, cannot continue to demand higher wages, improved safety, stronger compliance and better environmental performance from suppliers while holding prices down. “When sourcing prices do not rise with inflation, wage increases and production costs, the pressure moves down the supply chain,” Rana said. “Suppliers are then pushed to protect thin margins, and workers often feel the impact through low wages, excessive overtime, unstable jobs and limited bargaining power.” He added that while the industry has made progress in visible areas such as fire safety and child labor prevention, wages, worker voice and job security remain harder to improve because they challenge the low-cost business model itself. “My main point is that sustainability will remain incomplete unless brands connect their ethical commitments to fairer purchasing practices,” Rana said. The findings of this report reflect a reality Bangladesh’s garment workers have been living with for decades, said Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, a workers’ rights group. “The global fashion industry built its business model on relentless pricing pressure, and workers are p

How Bangladesh’s Garment Suppliers Are Being ‘Squeezed Dry’

Key takeaways

Also covered by

How Bangladesh’s Garment Suppliers Are Being ‘Squeezed Dry’

Key takeaways

Also covered by

More in business