Bangladesh's garment factories are running at 30-40% lower capacity. It's not a labor shortage. It's not a demand problem. It's gas—or the lack of it.
The country's domestic natural gas supply, which once powered 80% of commercial energy needs, now provides less than 40%. The manufacturing sector that employs millions and generates $41 billion in annual exports is suffocating.
"We can't run machines without power," says Rubana Huq, former president of the Bangladesh Garment Manufacturers and Exporters Association. "10% of factories have shut down. The rest are struggling. This isn't a business crisis—it's an existential threat to our economy."
A billion people aren't a statistic—they're a billion stories. In Bangladesh's case, 170 million stories, and 4 million of them work in the ready-made garment industry. When factories can't operate at full capacity, workers' hours get cut. Wages fall. Families that depend on factory income—sending children to school, paying medical bills, building small savings—are the first to feel the squeeze.
Bangladesh's energy crisis has deep roots. The country neglected gas exploration for years. Renewable energy penetration remains below 2%. Now, as domestic gas fields deplete, Bangladesh is forced to import liquefied natural gas and fuel oils at escalating prices.
The numbers are staggering: Bangladesh's energy import dependency surged from 20% in 2015 to over 56% by 2024, according to analysis by The Business Standard. Projections suggest it could exceed 90% by 2030.
The financial burden is crushing. The energy sector consumes an estimated $20 billion annually in foreign currency—nearly all of Bangladesh's monthly remittance earnings of approximately $2 billion. When accounting for capacity charges, IOC payments, infrastructure investments, and loan repayments, total costs could exceed $24 billion yearly.
Bangladesh exported $41 billion while importing $63 billion in fiscal year 2023-24, creating a $22 billion trade deficit. Without remittances from Bangladeshis working abroad and foreign aid totaling around $8 billion, the country would struggle to meet basic economic obligations.
Now add an energy import bill that eats nearly all foreign currency earnings, and the economic arithmetic becomes terrifying.
The garment sector—which accounts for 85% of Bangladesh's total exports—faces the worst impact. These factories operate on razor-thin margins in a globally competitive market. When energy costs rise or availability drops, manufacturers can't simply pass costs to international buyers. Brands like H&M, Zara, and Walmart have multiple sourcing options.
"Our competitors in Vietnam, India, and Cambodia don't face these energy problems," says factory owner Mostafa Kamal in Dhaka. "Orders are already shifting away. If this continues, Bangladesh will lose the one industry that lifted millions out of poverty."
The crisis affects more than garments. Steel mills, textile processors, food manufacturers—the entire industrial base depends on reliable energy. When gas supplies are irregular, factories can't plan production. Quality suffers. Delivery schedules slip. International buyers lose confidence.
Dhaka's industrial zones tell the story visually: Factories that once ran three shifts now operate one. Massive compounds that employed thousands have skeleton crews. The economic engine that transformed Bangladesh from aid-dependent basket case to lower-middle-income country in one generation is sputtering.
The interim government, which took power after mass protests toppled Sheikh Hasina in August 2024, faces limited options. It can subsidize energy imports, draining foreign reserves. It can raise electricity tariffs, triggering inflation and political backlash. Or it can ration supply, hurting industry and economic growth.
All options are bad. That's what happens when energy policy fails for decades.
Bangladesh ignored warnings about declining gas reserves. It failed to diversify energy sources meaningfully. Solar and wind power—abundant in a tropical country—remain virtually untapped. Gas exploration licensing became mired in bureaucracy and alleged corruption.
Now the bill comes due, and it's workers like Sharmin Akter who pay. She worked in a Gazipur garment factory before it cut shifts due to power shortages. Her hours dropped from 6 days to 3 days per week. Her monthly income fell from Tk 15,000 to Tk 8,000.
"I can't feed my children properly on this salary," Akter told a labor rights organization. "The factory says there's no electricity. What am I supposed to do?"
The energy crisis connects to every other challenge Bangladesh faces. Foreign reserves under pressure? Energy imports drain them. Inflation hurting the poor? Energy costs drive it up. Youth unemployment rising? Factories can't expand without power.
Bangladesh needs immediate fixes—secure more LNG contracts, maximize existing power generation, manage demand. But it also needs long-term transformation: massive renewable energy investment, serious gas exploration, energy efficiency improvements across the economy.
The country that surprised the world with its economic rise over the past two decades now faces a test. Can it solve an energy crisis that threatens to unwind that progress?
For 4 million garment workers and millions more in other industries, the answer determines whether Bangladesh continues its development trajectory or slides backward.
The factories are still standing. The workers are still ready. But without gas to run the machines, Bangladesh's industrial miracle faces an uncertain future.
