At least 402 garment factories closed between July 2023 and June this year, Commerce Minister Khandakar Abdul Muktadir told parliament yesterday.

Of the factories, 282 were members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), while 120 were members of the Bangladesh Knitwear Manufacturers and Exporters Association.

The minister disclosed the figures while responding to a question from lawmaker Ruhul Amin during the question-and-answer session at the Jatiya Sangsad, citing a June 22 report by the BGMEA.

The closures resulted from a combination of global and domestic factors, including the Covid-19 pandemic, the Ukraine war, Israel’s attack on Palestine and the related conflict in the Middle East, the US-Israel war on Iran, the global recession, political instability in Bangladesh, and a liquidity crisis in the banking sector caused by money laundering.

The other factors included India and Vietnam’s free trade agreements with Europe and the reluctance of foreign buyers to place export orders with small and medium-sized factories to facilitate their own monitoring.

The government has taken various measures to support and develop the garment sector such as alternative cash assistance of 1.50 percent instead of customs bonds and duty drawbacks for export-oriented domestic textile industries and an additional 0.50 percent special support for textile exporters in the Eurozone on top of the existing 1.50 percent.

An additional 3 percent benefit has also been provided to all small and medium-sized industries in the export-oriented garment sector.

The government has also provided 0.30 percent special cash assistance to the garment sector.

Bangladesh would soon graduate from the least-developed country (LDC) category, due to which it would lose preferential market access under various trading schemes of developed countries, potentially affecting exports worth $17.5 billion.

To address the challenge, Bangladesh has already concluded an Economic Partnership Agreement (EPA) with Japan, while discussions on reaching a Comprehensive Economic Partnership Agreement (CEPA) with South Korea are underway, Muktadir said.

Initiatives have also been taken to conclude EPA, CEPA, and free trade agreements with other export-potential markets, including the EU, the Regional Comprehensive Economic Partnership (RCEP), the UAE, Singapore, Indonesia, and China.

The government has also taken various steps to diversify export markets, the minister said.