Landed cost per piece is the FOB price plus freight, insurance, import duty, import tax and clearance. Bangladeshi apparel enters the EU, UK, Japan, Canada and Australia at low or zero duty under least-developed-country schemes, while the United States charges normal duty, so your destination changes the answer more than your factory does.
What is landed cost, and what does it include?
Landed cost is what one finished garment costs once it is sitting in your warehouse. Factories quote FOB, which stops at the ship’s rail in Chattogram, so everything after that point is yours to add. The usual lines are:
- FOB price per piece, including factory packing.
- Main freight: sea (FCL or LCL) or air, from Chattogram or Dhaka to your port or airport.
- Insurance: marine cargo cover, normally a small fraction of one percent of cargo value.
- Import duty on the customs value, set by the garment’s HS code and your trade preference.
- Import VAT or consumption tax, which most businesses reclaim but must finance.
- Clearance and delivery: customs broker, port handling, inland haulage.
- Quality, testing and sourcing costs: third-party inspection, lab tests, sample couriers and any buying-house service fee (Giga Sourcing’s starts from 5% of FOB value).
The landed-cost calculator lays these lines out for your product and destination. A buyer who compares only FOB prices across countries misses the largest swing factor, which is duty.
What drives the FOB price of a garment?
Fabric dominates. On a basic cotton T-shirt it is roughly 45% of the factory price in our illustrative model (see the line-by-line T-shirt breakdown). After fabric, five levers move the price most:
- Fabric weight and quality. Heavier fabric uses more yarn; combed ring-spun yarn costs more than open-end. See product and fabric.
- Quantity. Longer runs mean fewer line changeovers and full dye lots. Per-piece prices commonly fall by around a third between 500 and 10,000 pieces (illustrative).
- Decoration. Embroidery, appliqué and complex prints add cost per piece and per placement.
- Wash and finishing. Garment dye, enzyme or stone wash adds both cost and lead time.
- Trims and packaging. Custom labels, hangtags, polybags and cartons are separate lines.
How is import duty calculated on clothing?
Duty is a percentage of the customs value, applied to the rate for the garment’s HS code. The customs value is not the same everywhere. The EU, UK and Japan assess duty on a CIF basis (goods plus freight and insurance to the border). The United States assesses on the transaction value excluding international freight and insurance. For the same invoice, that difference changes the duty base.
Garments classify mostly in HS chapter 61 (knitted or crocheted) and chapter 62 (not knitted). The rate then depends on your market and on whether the goods qualify for a preference, which requires meeting the destination’s rules of origin and carrying the right proof of origin (a REX statement for the EU, a certificate of origin for several other markets).
| Destination | Scheme | Duty on typical cotton knit apparel | Notes |
|---|---|---|---|
| European Union | Everything But Arms (EBA) | 0% | Proof of origin by REX statement. China pays the standard 12% on most knitted apparel. |
| United Kingdom | Developing Countries Trading Scheme (DCTS), comprehensive preferences | 0% | Origin rules apply. |
| Japan | LDC special preferential tariff | 0% | Certificate of origin required. Consumption tax of 10% is charged separately. |
| Canada | Least Developed Country Tariff | 0% | Origin rules apply. |
| Australia | LDC preferential rate | 0% | Origin rules apply. |
| United States | No preference for Bangladesh | Normal (MFN) rate, for example 16.5% on cotton knit T-shirts, plus any additional measures in force | Additional US tariff measures have changed several times since 2025. Check the HTS and current CBP notices on the entry date. |
What does a worked landed-cost example look like?
The example below follows 1,000 basic 180 GSM cotton T-shirts shipped to Germany. Every number is illustrative: it shows how the lines combine, and it is not a quote or a published price band.
| Line | Bangladesh | China |
|---|---|---|
| FOB price | $2.90–3.60 | $3.60–4.40 |
| Sea freight and insurance | $0.14–0.22 | $0.10–0.16 |
| EU duty on CIF value | 0% (EBA) | 12% |
| Landed cost before VAT and clearance | $3.04–3.82 | $4.14–5.10 |
The result is a landed saving of roughly 15–30% for Bangladesh in this scenario, almost entirely explained by duty and a lower FOB price. Run your own product through the calculator; in a market without a preference, such as the United States, the gap narrows.
What happens to duty when Bangladesh graduates from LDC status?
Bangladesh is scheduled to leave the UN list of least developed countries on 24 November 2026, and has asked for a three-year deferral that was still awaiting a decision in October 2026. The preference schemes above are tied to LDC status, but the major ones provide transition periods. The EU, for example, continues EBA for three years after graduation. After that, Bangladesh would need to qualify for another arrangement, such as the EU’s GSP+ scheme, or face standard duty. Read Bangladesh EBA and LDC graduation explained before committing to long-dated programmes.
How do Incoterms change who pays for what?
The same factory can quote FOB, CIF or DDP, and the numbers are not comparable. Under FOB you book and pay main freight and import clearance. Under CIF the seller pays freight and insurance to your port. Under DDP the seller delivers cleared and duty-paid. Convert every quote to one basis before comparing. Incoterms for apparel buyers covers the practical differences.
Go deeper in this pillar
KEY NUMBERS
- EU duty on Bangladeshi knitted apparelSource: Regulation (EU) No 978/2012; EU TARIC · as of Oct 1, 2026
- 0% (EBA)
- EU duty on Chinese knitted T-shirtsSource: EU TARIC, CN 6109 10 00 · as of Oct 1, 2026
- 12%
- US normal duty on cotton knit T-shirtsSource: US HTS 6109.10.00, plus any additional measures · as of Oct 1, 2026
- 16.5%
- Illustrative landed saving, cotton basics to the EUSource: Giga Sourcing illustrative model · as of Oct 1, 2026
- 15–30%
- Scheduled LDC graduation dateSource: UN Committee for Development Policy; deferral request pending · as of Oct 19, 2026
- 24 Nov 2026
KEY NUMBERS · SOURCES LISTED BELOW · CITE THIS
Frequently asked questions
Is the FOB price the price I will pay?
No. FOB stops when goods are on the vessel in Chattogram. Freight, insurance, duty, taxes, clearance and inland delivery come on top. Duty alone ranges from 0% to more than 16% depending on destination.
Do I pay duty on clothing from Bangladesh?
Not into the EU, UK, Japan, Canada or Australia when origin rules are met and proof of origin is supplied. Into the United States you pay the normal duty for the garment’s HS code plus any additional measures in force.
Is import VAT part of landed cost?
It is a cash-flow cost rather than a final cost for most VAT-registered importers, because they reclaim it. Include it in cash planning, and exclude it when comparing sourcing countries.
Will duty rise when Bangladesh leaves LDC status?
Not immediately. Major schemes provide transition periods, for example three years of EBA in the EU. Any change after that depends on what arrangement Bangladesh qualifies for.
How accurate are the figures in this guide?
Duty rates are checked against official tariff sources and dated. Cost ranges are indicative planning figures and illustrations, not quotes. Published price bands will appear in the pricing guide once three written factory quotes support each band.
Sources
- Regulation (EU) No 978/2012 (Generalised Scheme of Preferences) · Oct 25, 2012
- EU TARIC customs tariff database · Oct 1, 2026
- US International Trade Commission, Harmonized Tariff Schedule · Oct 1, 2026
- UN Committee for Development Policy: LDC graduation · Oct 19, 2026
- Giga Sourcing illustrative cost model · Oct 1, 2026