It’s now more than four months since the country has witnessed the required raise in minimum wage for garment workers by 56.25 per cent, the first hike since 2019. The wage is now Taka 12,500 (US $ 113) and this hike is supposed to be a cost disadvantage for Bangladesh. Experts believe that it increased the minimum CM cost of apparel by 7 per cent – 10 per cent based on the type of products. So far, H&M, Gap, G-Star and a few other top brands and retailers have given their consent to this increase in price.
Apparel Resources’ industry-based survey has revealed eye-opening findings as to how the wage hike has created a lot of challenges for RMG exporters. The industry unanimously agreed that increased wage has a direct impact on product price and more than one-third of the apparel exporters think that the wage has increased the price of their products by more than 7 per cent.
72 per cent of companies claimed that this hike has significantly impacted their margins. The challenge is also mounting as only 9 per cent of the factories shared that all of their buyers are paying increased prices, while according to 68 per cent of factories, less than 30 per cent of their buyers are paying increased prices. All this has created a working capital challenge also for the factories as 55 per cent of them are facing a capital crunch regularly while 27 per cent of factories face it on and off.
In some cases, order fulfilment doesn’t seem viable due to price pressure. In fact 46 per cent of respondents have refused orders since the wage hike took place.
Though the wage hike was in discussion for a long time, 36 per cent of exporters shared that there is not much scope to overcome this issue. 64 per cent of companies increased their efforts, before the wage hike announcement, with greater focus on automation and efficiency. After the wage hike, to mitigate its impact, nearly all the factories are on their toes and taking the best possible action as more than half of the respondents shared that they are now focusing on process improvement, automation and increased efforts for process improvement and production.
The only ‘silver lining’ in the case of a wage hike and that too for not the entire industry is that 40 per cent of the RMG exporters believe that it has a positive impact on work as workers are happy and there is some improvement in their productivity.
Bharat Tex Special Report 2026 
