H and M, Zara face major disruptions as Bangladesh garment factories shut down amid political crisis

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has announced a complete shutdown of all garment manufacturing facilities, causing significant disruption to the country's vital garment industry, as reported by the BBC. This decision follows the sudden resignation and departure of Prime Minister Sheikh Hasina.

Impact on global apparel brands
The closure of garment factories in Bangladesh, a key hub for global apparel production, will severely impact major brands like H&M and Zara. H&M sources garments from over 1,000 factories in Bangladesh, while Zara relies heavily on manufacturing clusters within the country.

H&M's response
Amid the ongoing political turmoil, H&M has stated that it is closely monitoring the situation in Dhaka and will not seek discounts from suppliers for any delays caused by the current circumstances. A company spokesperson said, "According to the latest information, most factories are gradually reopening, and safety remains our priority. We have assured our suppliers that we will not request discounts due to delays under the current situation. We continue to assess the situation daily."

Broader industry impact
The Confederation of Indian Textile Industry (CITI) has warned that numerous global brands relying on Bangladeshi suppliers will face disruptions. Delays and decreased product availability could lead to significant impacts on inventory levels and sales in the global retail market. Inditex, the parent company of Zara and Bershka, has substantial manufacturing operations in Bangladesh, with 150 suppliers and 273 sewing factories, employing nearly a million workers.

Economic significance
The ready-made garment industry is crucial to Bangladesh's economy, accounting for approximately 83% of the country's total earnings. In 2023, Bangladesh exported $38.4 billion worth of garments, ranking third globally in apparel exports after China and the European Union, according to the World Trade Organization (WTO).


Political unrest and uncertainty
The political crisis in Bangladesh has created significant uncertainty. Reports of looting in Dhaka and other major cities have emerged, with images of protesters looting Prime Minister Sheikh Hasina's official residence going viral on social media. The country is currently in a transitional phase, awaiting the formation of an interim government.

The shutdown of Bangladesh's garment factories amid the political crisis poses a substantial challenge for the global apparel industry. With major brands heavily reliant on Bangladeshi production, the disruptions could lead to far-reaching consequences across the global retail market. As the situation evolves, stakeholders continue to monitor developments closely, hoping for a resolution that will restore stability and normalcy to this critical industry.