A potential bilateral trade deal is reshaping the global textile landscape. Bangladesh and Türkiye have agreed to strengthen economic cooperation and are exploring a Free Trade Agreement (FTA) or Preferential Trade Agreement (PTA). This means two nations with complementary strengths in textiles and apparel may soon eliminate tariff barriers, creating a tightly integrated industrial chain.
Background
Bangladesh is the world's second-largest garment exporter, with exports exceeding $47 billion in FY2022-23, mostly from ready-made garments. Its textile sector heavily relies on imported raw materials, particularly synthetic fibers and cotton yarn, of which Türkiye is a major supplier. Türkiye's textile industry is valued at around $30 billion, with strengths in technical textiles, synthetic fibers, and high-end fabrics, and it enjoys zero-tariff access to the EU through its customs union. Bilateral trade currently stands at about $1 billion, and the proposed FTA/PTA aims to raise this to over $2 billion. For Bangladesh, lower tariffs on Turkish inputs would ease manufacturing cost pressures; for Türkiye, it means a stable, low-cost garment production base to enhance competitiveness in Western markets.
Industry Impact
The implications go far beyond trade figures. From a global supply chain perspective, deeper Bangladesh-Türkiye ties will foster a vertical integration chain: Turkish synthetic fibers, yarns, and dyeing technologies can feed Bangladesh's garment factories, while Bangladesh's low labor costs (average monthly wage of $95) and massive scale offer Türkiye's brands and retailers a highly cost-effective sourcing destination. For Chinese textile companies, this presents both challenges and opportunities. The challenge is potential order diversion, especially in mid-to-low-end garments. However, Chinese firms can set up factories in Bangladesh to leverage the FTA, export products to Türkiye at lower tariffs, and then use Türkiye's EU customs union to access European markets—effectively creating a detour around trade barriers. The deal will also boost technical cooperation and standards mutual recognition, combining Türkiye's R&D in high-performance fabrics with Bangladesh's mass production experience, thereby raising the value-add of the entire South Asia-Central Europe textile belt.