It was an ultimatum that sent ripples through Bangladesh’s garment industry: If the interim government failed to safeguard domestic yarn production by suspending duty-free yarn exports under the bonded warehouse facility, the Bangladesh Textile Mills Association warned, all mills would be indefinitely closed starting February. “We do not have the capacity to repay bank loans,” BTMA president Showkat Aziz Russell said at a press conference in Dhaka last week. “Even if we sell off all our assets, it will n ...

Core Insights - The UK's reforms to the Developing Countries Trading Scheme (DCTS) allow Sri Lankan fashion manufacturers to source up to 100% of materials globally while maintaining zero tariffs on exports to the UK [1][2] - The changes are a response to requests from various stakeholders, including the Sri Lankan government and the Joint Apparel Association Forum, aimed at enhancing trade opportunities [2][4] Group 1: Trade Benefits - Sri Lanka's garment sector, which constitutes over 60% of its exports to the UK, is expected to benefit significantly from these reforms, potentially boosting exports valued at approximately $675 million [3][4] - The liberalized rules include the establishment of an Asia Regional Cumulation Group of 18 countries, allowing Sri Lankan manufacturers to source materials from regional partners while retaining preferential tariff benefits [2][4] Group 2: Economic Impact - The reforms are anticipated to enhance the UK-Sri Lanka trade relationship, with expectations of increased exports not only in the garment sector but also across other sectors eligible for zero tariffs under the DCTS [4] - Sri Lanka's global apparel exports rose by 5.42% year-over-year in the first 11 months of 2025, reaching $4.57 billion, indicating a positive trend in the industry [4]

Industry Risk & Safety - Bangladesh garment factory fire results in at least 16 fatalities [1]

Labor Market & Gender Equality - South Asia's labor markets generally exhibit woefully low female participation rates [1] - Garment factories in South Asia stand out as exceptions to the low female participation rate in the region's labor markets [1] Industry & Trade - The future of South Asia's garment factories hinges on exporting clothes [1] - The export market is facing uncertainty due to potential tariffs imposed by a specific country [1]