Burma (Myanmar) Apparel Manufacturing

Before the Covid-19 pandemic, Burma was an appealing location for garment factories and value-added product manufacturing sites due to low labor costs, Special Economic Zone (SEZ) benefits, and tax incentives for foreign investors. Given 40 million people with smartphones and Facebook as the primary e-commerce platform, many manufacturers and importers focused on e-commerce as a primary promotional avenue. Following the coup, State Administration Counsel (SAC) regulations decreased internet access, particularly in remote areas, and e-commerce growth slowed. Burma’s consumer products industry, notably the garment industry, has been one of the hardest hit.

More than 100 foreign brands are sourced from Burma, including apparel, sportswear, footwear, handbags, and luggage. Two-thirds of garment manufacturers are foreign-owned, with China, Hong Kong, and Taiwan leading, followed by Japan, Korea, Thailand, and Europe. The industry is mostly Cut-Make-Pack (CMP) production system-based. CMP exports are exempt from customs duties and a 5% commercial tax.

Burma has become less appealing to western countries for apparel manufacturing due to security concerns, cash flow shortages, and logistical challenges. Prior to Covid-19 and the coup, the clothing industry accounted for 28 percent of total Burmese exports. It employed 700,000 people and was Burma’s fastest-growing sector. According to the International Labor Organization, 220,000 garment workers, primarily women, were laid off in 2021. As many western brands exited the Burmese market, local partners sought new business partners in Asia.

Before doing business in Burma, visit www.trade.gov/burma for the latest updates on sanctions, export controls and the investment climate for Burma.

For assistance with Burma Consumer Goods Sector, U.S. exporters can contact the U.S. Commercial Service Department @ office.burma@trade.gov