Dark Clouds Loom Over Business and Investment Outlook

Bangla Press Desk:  An ominous warning has emerged for business and investment in the country amid an ongoing energy crisis. Shortages of gas, electricity and fuel have now reached a severe level in the industrial sector. In particular, the ready-made garments (RMG) industry—the main source of export earnings—and its associated industries have fallen into deep distress.

Production has been seriously disrupted due to the lack of uninterrupted energy and electricity, causing foreign buyers to lose confidence. Faced with multiple challenges, they are increasingly turning away from Bangladesh and shifting towards competing countries. According to data from the Export Promotion Bureau (EPB), garment exports have declined for eight consecutive months, with further decreases feared in the coming days. If the war persists, there is a risk that small and medium-sized factories may disappear altogether.In industries where production is calculated on an hourly basis, factories are experiencing daily load shedding of between three and seven hours. This has driven up business costs, which in turn has led to a reduction in purchase orders. Industrialists warn that unless the government takes special measures to tackle the challenges in fuel imports arising from the global conflict, the national economy could face a major collapse. Small and medium enterprises, in particular, are on the brink of extinction. They stress that urgent steps must be taken to preserve employment and sustain exports. They have also called on the government to send a strong message by ensuring uninterrupted energy supply in industrial zones to restore buyers’ confidence and maintain production.

Fazlee Shamim Ehsan, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said industrial owners are now at a loss due to the energy crisis. The shortage of diesel has made it nearly impossible to keep production running. He noted that a “wrong message” is being conveyed to buyers—that future shipments from Bangladesh may not be delivered on time due to the energy shortage—resulting in a decline in orders. He urged the government to reassure buyers by guaranteeing uninterrupted energy supply to industries. Otherwise, if the war drags on, the global economy may collapse, leading not only to food shortages but also to severe social instability. In protest, he has personally decided not to undertake work from American buyers at his factory.

Inamul Haq Khan, Senior Vice-President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said factories in Savar, Ashulia and Konabari are experiencing daily power cuts of three to seven hours. “Our production is calculated hourly; even a one-hour delay causes significant losses. In such a situation, keeping factories shut for hours results in major setbacks,” he said.

Factories are having to rely on generators to remain operational, significantly increasing production costs. Although the government has introduced fuel cards, diesel remains insufficient at filling stations. Some supply is available, but it falls short of demand, and in many cases fuel must be procured at higher prices, further raising costs. As a result, orders are being diverted to other countries.Md Shahriar, President of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), said production costs have increased by 35 percent over the past 15 days due to the energy crisis, while production capacity has declined by 30 percent. He warned that no export is possible without accessories, and if the situation continues, labour unrest may arise ahead of the upcoming Eid-ul-Azha. Prolonged disruption could force many factories, both large and small, to shut down, putting entrepreneurs at risk of becoming bank defaulters.

Anwar-ul Alam Chowdhury Parvez, President of the Bangladesh Chamber of Industries (BCI), said many foreign buyers have suspended orders over fears that Bangladesh could run out of fuel within the next two to three months. These orders are being redirected to countries such as India. This trend threatens to push the country’s economy—and its primary source of foreign currency earnings, the RMG sector—into a deep crisis. Owing to instability in the global market and domestic constraints, including the power shortage, many potential orders for July and August have already stalled.