In a development that could significantly reshape the global apparel trade, the European Union is introducing a Digital Product Passport (DPP) for garments — a move with profound implications for Bangladesh’s $39 billion ready-made garment (RMG) export sector. With over 50% of Bangladesh’s apparel exports destined for Europe, the stakes are high: non-compliance may mean losing access to its largest and most lucrative market.

What Is the Digital Product Passport (DPP)?

The DPP is a key component of the Ecodesign for Sustainable Products Regulation (ESPR), which entered into force in July 2024. Under this regulation, all textiles imported into the EU will need to carry a digital identifier with commonly a QR code or NFC tag, linking to a secure online record. The passport will store verified data on everything from material origin and carbon footprint to recyclability and end-of-life management. 

Textiles are among the first high-impact sectors targeted: the delegated acts that define the technical details are expected by the end of 2026 or early 2027, and enforcement for textile DPPs will begin in earnest between 2027 and 2030.

Why This Matters for Bangladesh

For Bangladesh, the DPP is not just a regulatory headache; it’s a strategic inflection point. According to BGMEA data, about $39.35 billion worth of RMG was exported in FY25, with more than half headed to the EU. 

Recognizing this urgency, BGMEA has moved proactively. In May 2025, it signed an MoU with DigiProd Pass Ltd. and Digital Architect Ltd. to experiment with a blockchain-enabled DPP system. Over the 24-month pilot, selected factories will share data on raw materials, energy and water use, labor conditions, and lifecycle environmental impact. 

This pilot is not just about meeting regulations — it offers long-term advantages. Blockchain-backed traceability can bolster trust, optimize reporting, and potentially streamline audits for sustainability certifications. It's also reduced fast fashion trends.

Risks and Challenges

1. Market Access Threats
Factories that fail to adopt DPPs risk being locked out of the EU market. Without full supply-chain transparency, orders could be rejected or blocked at EU customs — a risk that is existential for many producers.

2. Digital and Financial Barriers, Especially for SMEs
Smaller factories may struggle with the technical and financial burden of collecting, digitizing, and verifying sustainability and social data. Implementing blockchain-based systems, conducting life cycle assessments (LCAs), and training staff will be a steep climb for many.

3. Regulatory Ambiguity
While the ESPR framework is established, many details remain in flux. The exact data fields, security standards, interoperability requirements, and governance structures will be spelled out in the upcoming delegated acts. For example, the roles of customs authorities, recyclers, brands, and consumers in accessing different parts of the passport are still being defined.

4. Data Quality and Trust
Ensuring the integrity of data—especially when it is sourced across multiple tiers of the supply chain—is a major challenge. To be credible, the DPP must rely on trusted, verifiable data sources and robust mechanisms to prevent tampering.

Strategic Opportunities for Bangladesh

Despite the challenges, this transition also offers Bangladesh’s RMG sector several strategic openings:

• First-mover Advantage: Factories that adopt DPP early, especially via BGMEA’s pilot, can position themselves as sustainability leaders — attracting eco-conscious European buyers and building trust.

• Value Addition through Transparency: Beyond compliance, the DPP provides a storytelling platform. Brands can showcase verified environmental and social metrics, appealing to increasingly conscious consumers.

• Efficiency Gains: Blockchain-based traceability can reduce administrative burden by automating reporting, reducing audit friction, and improving data accuracy.

• Circular Economy Integration: With DPPs, companies can more easily integrate recycling, resale, or upcycling models. The passport can guide end-of-life decisions and reusing/recycling systems.

• Risk Mitigation: By participating in pilots now, Bangladeshi stakeholders can shape the system to reflect local reality and manage risk when the regulation becomes non-negotiable.

What Must Stakeholders Do Now

1. Scale Up the Pilot: BGMEA, together with DigiProd Pass and Digital Architect, should expand the pilot to include more factories (especially SMEs) and data types (e.g., social compliance, emissions).

2. Build Data Infrastructure: Factories should invest in systems to collect, standardize, and verify lifecycle metrics. This includes LCA capabilities, energy/water usage tracking, and chemical management.

3. Train Workforce: Workers and management need capacity-building, particularly around how to record emissions, document labor conditions, and use blockchain or digital tools.

4. Engage Buyers Early: Garment makers should actively engage European buyers to co-create DPP use cases and align on the data that matters most.

5. Advocacy & Policy Support: Industry associations (like BGMEA) and the government should advocate for supportive financing, technical assistance, and phased implementation to ensure small factories are not left behind.

6. Prepare for Long-Term Value: Treat DPP not just as a compliance cost, but as an asset that can unlock circular value, sustainability storytelling, and market differentiation.

However, the EU’s Digital Product Passport regime is not a distant threat; it’s a fast-approaching reality with deep implications for Bangladesh’s garment industry. For a country so dependent on European demand, the DPP offers both risk and opportunity. The BGMEA-led pilot shows foresight and urgency, but success will depend on widening participation, strengthening data infrastructure, and treating transparency as a competitive asset — not just a regulatory burden.

By acting decisively today, Bangladesh’s RMG sector can transform this regulatory mandate into a strategic lever for sustainability, resiliency, and future growth.