Bangladesh's textile industry is teetering on the brink of a nationwide shutdown by February 1st! Local millers are issuing a stark warning: if the government doesn't revoke the duty-free import privilege for yarn by the end of January, spinning operations across the country will grind to a halt. This isn't just a minor hiccup; it's a potential crisis that could impact millions.
This dramatic ultimatum arises from intense pressure on the interim government to suspend the zero-duty benefits on imported yarn, particularly under the bonded warehouse system. The situation escalated dramatically when the Ministry of Commerce officially recommended to the National Board of Revenue that this facility be withdrawn. Domestic millers are passionately arguing that these duty-free imports have completely shattered the level playing field, inflicting severe damage on local spinning units.
For a considerable period, Bangladesh's vital garment manufacturers and exporters have relied heavily on imported cotton yarn, primarily from India, and polyester yarn from China. This reliance was driven by the allure of competitive pricing and consistent quality. However, local millers contend that this dependency has plunged the domestic textile industry into a deep financial quagmire.
And this is the part most people miss: the crisis has been significantly exacerbated by the ongoing gas crisis. Over the last three to four months, the textile sector has reportedly incurred staggering losses of nearly $2 billion due to gas shortages, erratic supply, and soaring energy prices. Despite numerous pleas, mills have yet to receive any subsidized gas rates. The combination of higher prices and disrupted supply has led to a drastic reduction in production capacity, with many units operating at nearly 50 percent less than their potential.
The Bangladesh Textile Mills Association (BTMA) paints a grim picture, stating that cheap Indian yarn has flooded the domestic market, leaving unsold stocks valued at over Tk 12,000 crore. Tragically, more than 50 textile mills have already ceased operations, leading to thousands of workers losing their livelihoods. Millers are also finding it increasingly difficult to service their loans as financial pressures mount.
But here's where it gets controversial: the key demands from the textile millers are quite specific. They are calling for the immediate withdrawal of the duty-free import facility for yarn, especially for 10 to 30 count cotton yarn. Furthermore, they are pushing for a subsidized and uninterrupted gas supply, a reduction in VAT collection during this critical period, lower interest rates on bank loans, and a broader dialogue with the government to stabilize the sector. Do you think these demands are reasonable, or do they prioritize local interests too much?
Government figures reveal a startling dependency: in 2025 alone, Bangladesh imported approximately 70 crore kilograms of yarn, costing around $2 billion. A staggering 78 percent of these imports originated from India. This highlights the significant economic ties and potential vulnerabilities.
The BTMA has issued a dire warning: a shutdown of spinning units from February 1 could affect nearly one million workers nationwide and potentially trigger social unrest. These serious concerns have been communicated to the interim government. Despite the escalating crisis, there has been no announcement of VAT relief, further burdening mills already grappling with unsold inventory and declining output.
This standoff has starkly exposed a deep chasm between textile millers and garment exporters. While millers firmly believe that domestic production is more than adequate to meet national demand, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) presents a contrasting view.
Garment exporters in Bangladesh argue that locally produced yarn, particularly the 10 to 30 count cotton yarn, is considerably more expensive than its Indian counterpart. They also assert that international apparel brands often favor foreign yarn and fabrics, especially from India, due to perceived superior quality and consistency. The exporters have cautioned that halting duty-free yarn imports would significantly erode Bangladesh's competitiveness in the global apparel market.
Amit Soti, an Indian yarn exporter, shared his perspective with India Today: “Bangladesh garment exporters receive duty-free benefits on raw material imports under bonded facilities. Suspending bonded imports of yarn will increase costs for manufacturers, as locally produced yarn is more expensive and lower in quality compared to Indian yarn. This will ultimately hurt Bangladesh’s export industry.” This raises a crucial question: is protecting local millers inadvertently harming the export sector that drives so much of Bangladesh's economy?
As pressure mounts from both sides, Bangladesh's vital textile and apparel sector—a major employer and a significant source of foreign exchange—finds itself at a critical juncture. Without a carefully balanced policy, the conflict between millers seeking protection and exporters demanding competitiveness risks plunging the industry into prolonged economic and social instability. What do you believe is the best path forward for Bangladesh's textile industry? Should the government prioritize local production, or global competitiveness? Share your thoughts below!
