Transforming Bangladesh’s Leather Sector for Sustainable Growth and Global Competitiveness
Citation: Raihan, S. and Roy, S. (2025). Transforming Bangladesh’s Leather Sector for Sustainable Growth and Global Competitiveness. SANEM & Australian High Commission Policy Paper Series. SANEM Publications, Dhaka, Bangladesh.
This paper examines the paradox of Bangladesh’s leather industry: a sector rich in history, raw materials, and export potential, yet constrained by deep environmental, social, governance, and structural deficits. Tracing its evolution from the early tanneries of Narayanganj and Hazaribagh to the relocation to Savar, the paper shows how a strategy that was meant to usher in eco-friendly industrialisation has instead reproduced old problems in a new location. Despite generating around US$1 billion in exports and nearly 200,000 jobs, the industry remains locked into low-value crust leather exports, weak value addition, and heavy dependence on a few external markets.
Using a mixed-methods approach that combines secondary data, policy and regulatory review, and key informant interviews with policymakers, tannery owners, workers’ representatives, and environmental specialists, the paper provides a diagnostic of the sector across the value chain. It documents severe failures in effluent treatment at the Savar CETP, widespread workplace health hazards, fragmented and weak enforcement of environmental and labour regulations, and major barriers to meeting international compliance benchmarks such as LWG and ZDHC. These weaknesses, together with technological gaps, skills shortages, and underdeveloped backward linkages, prevent Bangladesh from accessing premium markets and fully exploiting its raw material advantage, especially in the context of LDC graduation and tightening global sustainability norms.
On this basis, the paper proposes a strategic policy framework built around three pillars: (i) environmental sustainability and compliance, centred on rehabilitating CETP performance and enforcing “polluter pays”; (ii) strengthened governance and institutional capacity, including a dedicated Leather Sector Development Authority and a comprehensive long-term leather policy; and (iii) enhanced competitiveness and market positioning through a shift to branded finished goods, support for international certification, skills and R&D investments, and a “Bangladesh Leather” brand. A phased implementation roadmap and KPIs are set out to align environmental stewardship, export diversification, and long-term economic resilience.
