Bangladesh's Garment Industry Confronts Power Shortages and Rising Energy Costs

Bangladesh’s garment industry, identified as the country’s main economic sector, is currently experiencing severe power shortages accompanied by sharply increasing energy expenses. Frequent blackouts have disrupted factory schedules, while the cost of gas and petrochemicals essential for spinning, knitting and dyeing processes has risen markedly. These twin pressures have placed considerable financial strain on manufacturers and have begun to affect their ability to maintain production levels.

The country’s energy supply is heavily dependent on imports, with roughly 95 % of Bangladesh’s oil and gas sourced from Gulf producers. The recent war launched by the United States and Israel against Iran, although now concluded, has left Bangladesh desperately short of power. These disruptions have heightened the vulnerability of energy-intensive industries. The reliance on imported fuel makes the sector especially sensitive to external supply shocks.

On 6 June, Al-Muslim Group, a large clothing exporter operating knitwear and denim factories in Dhaka, terminated the employment of nearly 1,900 workers. The layoff follows the broader context of power unreliability and rising input costs that have strained garment manufacturers. The scale of the layoff underscores how energy-related pressures are translating into direct workforce reductions within the sector.

The power deficit in Bangladesh follows the conclusion of the conflict launched by the United States and Israel against Iran. Although the war may be over, the country remains desperately short of power. Because roughly 95 % of Bangladesh’s oil and gas is imported from Gulf producers, the disruption caused by the conflict has left the garment sector without sufficient energy to sustain normal operations.

• Approximately 95 % of Bangladesh’s oil and gas imports originate from Gulf suppliers.

• Spinning, knitting and dyeing mills consume large volumes of gas and petrochemicals.

• Al-Muslim Group’s dismissal of nearly 1,900 employees represents a substantial labor reduction for a single exporter.

Power interruptions directly affect the operation of textile machinery, leading to downtime and reduced output. Rising energy prices increase the cost of producing finished garments, compressing profit margins for exporters. The workforce reduction at Al-Muslim Group signals a broader risk of capacity contraction across the sector if energy constraints persist.

Because the garment industry is Bangladesh’s main source of export earnings, sustained energy shortages and rising costs mean that a crisis may loom. The combination of blackouts and cost pressures could erode the sector’s competitiveness and trigger further job losses. The situation therefore highlights the strategic importance of securing stable, affordable energy supplies to safeguard production and employment.