Why a T-shirt from Bangladesh costs about $2 at the factory

A factory in Bangladesh can sell you a plain cotton T-shirt for about $2. All prices here are in US dollars. In 2025 the EU paid Bangladesh an average of $2.06 per cotton T-shirt. The average from all supplier countries was $2.67. Three things explain the gap: scale, wages and duty. But $2 is only where your costs start.

What does “$2” actually mean?

Factory prices are usually quoted FOB (Free On Board). FOB means the price covers making the goods and loading them onto the ship in Bangladesh. After that, freight, insurance, import duty and delivery are the buyer’s cost.

The $2.06 is an average EU import price across all shipments, not a quote. The same Financial Express report says standard cotton T-shirts trade at about $2–3 a piece, and that higher-paying brands rarely pay more than about $18 per kilo, roughly $3 a piece. Directory listings show plain cotton T-shirts mostly at $1.00–2.35 FOB. These are asking prices on a website, not checked quotes. A heavier fabric, a print or a small run will cost more per piece.

Reason 1: scale

Bangladesh makes basic knitwear in very large volumes. Knitwear exports alone earned $21.15 billion in FY2024-25, the year from July 2024 to June 2025. In 2025 Bangladesh also supplied 61% of the EU’s cotton T-shirt imports. Long runs of the same simple product keep the cost per piece low. For the wider picture, see why so much clothing is made in Bangladesh.

The trade-off: the system is built for volume. The minimum order quantity (MOQ) is the smallest order a factory will accept. One factory owner says most Bangladeshi firms typically require at least 500 pieces for a startup (2021). Because much of the fabric is bought in, the real minimum is often set by the fabric mill, not the sewing floor.

Reason 2: wages

The garment minimum wage is Tk 12,500 a month, set in December 2023, with yearly increments on top. At Bangladesh Bank’s rate of Tk 123.16 per US dollar on 11 October 2026, Tk 12,500 is about $101. Some guides, such as SourceReady, say $113 a month because they use an older exchange rate. For comparison, the 2026 legal minimum is about $140–200 in Vietnam and about $280–405 in China, depending on the area.

The trade-off: wages and other costs are rising. Unions have asked for a new wage board and a minimum of Tk 23,000–30,000; when last checked on 13 October 2026, the Tk 12,500 base rate was still in force. Diesel rose 17.4% in September 2026, and Chattogram port charges rose by an average of 41% from October 2025. Exporters say they cannot pass these costs on to buyers. In our reading, that squeeze raises the risk that a factory quietly cuts quality or moves work elsewhere.

Reason 3: zero duty in four big markets

Bangladesh is on the UN list of Least Developed Countries (LDCs), and many rich countries let LDC goods in duty-free. LDC graduation means leaving that list. The special access then usually continues for a transition period before it changes. Bangladesh is scheduled to graduate on 24 November 2026 and has asked to delay this to 2029. As of 14 October 2026, no UN decision had been published. Our guide to import duty by market sets out each market’s timeline.

Cotton T-shirt from Bangladesh	Normal duty	Bangladesh pays	How long
UK	12%	0%	Unchanged for three years after graduation; the UK says garments stay duty-free after that
EU	12%	0%	To at least the end of 2029
Canada	18%	0%	Three more years, stated as “intent” only
Australia	Not in our sources	0%	Assurances given, no end date found
US	16.5%	About 26.5%	Extra 10% since 24 July 2026, no fixed end date

The US figure includes a 10% duty under Section 301, a US trade law that lets the government add tariffs. This one covers 60 economies that, in the US view, have not banned imports made with forced labour. A promised US zero-duty quota for clothing made with US cotton had not been set up as of 25 September 2026.

The trade-off: this edge has a clock, and it needs paperwork. Zero duty applies only when the factory supplies the correct proof of origin. If Canada’s transition ends without a new scheme, Bangladeshi clothing could face about 17% average duty there (a 2022 law-firm estimate). Rivals are also gaining ground: India’s trade deal with the UK took effect on 15 July 2026.

Why is $2 not your final cost?

What you should compare is the landed cost: the full cost of getting goods to your warehouse, including the factory price, freight, insurance, import duty and fees. On top of the FOB price, budget for:

1. Samples. Usually $20–50, often refunded with the bulk order.
2. Freight. Sea is cheaper but slow; air is fast but costly. Ask a freight forwarder to quote for your actual cartons.
3. Inspection. One inspection firm, V-Trust, publishes a rate of $268–298 per inspector-day in Bangladesh. One inspection of about $300 is 10% of a $3,000 order. See how an AQL inspection works.
4. Duty and fees. Zero in the UK, EU, Canada and Australia with proof of origin; about 26.5% in the US, plus customs broker fees.

For a worked example, see what 300 hoodies from Bangladesh really cost to make and land.

What this means for your order

Ask each supplier for an FOB quote for your exact fabric, weight, print and quantity, then work out the landed cost for your market before you compare. Treat $2 as a benchmark for a basic shirt made in volume, not a price you should expect on a small first run. Loom & Harvest does factory checks, sample coordination and inspections for fixed fees; you can send us your product and quantity.