Local textile millers have threatened to shut spinning units from February 1 for an indefinite period if the government does not withdraw the duty-free import facility for yarn by the end of this month.
While speaking at a press conference at the Bangladesh Textile Mills Association (BTMA) office in Dhaka yesterday, BTMA leaders said the government would bear responsibility for any labour unrest that might follow factory closures.
Spinners also warned that shutting production units could make it impossible to repay bank loans and other financial obligations.
They said domestic mills are sitting on unsold stock worth Tk 12,500 crore as cheap Indian yarn floods the local market.
The statement came amid opposition from apparel manufacturers and exporters to the commerce ministry’s recommendation to end duty-free benefits under the bonded warehouse facility for certain yarn imports.
BTMA leaders say that local mills are capable of producing sufficient yarn to meet domestic demand. But the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) say domestic yarn prices for 10 to 30 count cotton are higher than imports.
At the press conference, BTMA President Showkat Aziz Russell described the situation as a “national crisis” and an “emergency” for the local spinning sector.
He said that many mills are operating at just 60 percent capacity due to a gas shortage, yet the government continues to collect tax and value-added tax (VAT) without reducing gas prices.
He also pointed to past disruptions, noting that when India halted cotton exports, local millers faced trouble. Over-reliance on a single source, he said, could pose a serious threat to Bangladesh in the future.
The BTMA president said after the country graduates from the least developed club in November this year, a minimum of 40 percent local value addition will be required to enjoy trade benefits in foreign markets. But the government has made no preparations.
Russell also complained that the government is not allowing discussions on the sector’s challenges. He also called around 16 percent interest on bank loans “misguided”.
Former BTMA director Razeeb Haider said the sector’s problems are not the result of recent events but of long-term disadvantages created by the Indian government’s subsidies for its textile and garment industry. “Now Bangladesh risks losing its competitiveness against Indian yarn,” he said.
He said that 35 crore kilogrammes of cotton yarn were imported in fiscal year 2022-23, rising to 69.81 crore kilogrammes in fiscal year 2024-25, at costs of Tk 14,400 crore and Tk 26,400 crore, respectively. Nearly 78 percent of these imports in 2024-25 came from India, showing heavy dependence on a single source.
“Are we securing local competitiveness in the yarn business?” Haider asked. “The local spinning mills are capable of supplying all required cotton yarn.”
According to the spinners, they are not calling for a blanket suspension of yarn imports but only for 10 to 30-count yarn. Other counts, from 1 to 9 and 31 to 100, remain open to import.
Russell praised the government for stopping yarn imports through land ports in early 2025, saying imports via sea now show the true picture of the market. India’s dynamic textile policy, backed by heavy subsidies, threatens the local $23 billion primary textile sector.
BTMA Director Badsha Mia said local mills face pressure from the cheaper, subsidised Indian yarn. “Because of lost competitiveness, 50 to 60 mills have already closed over recent years as they could not survive the unfair competition,” he said.
“The local primary textile sector is under even greater pressure as international clothing brands increasingly select foreign fabrics,” Mia said.
As a result, Bangladesh exports $42 billion in garments but imports $32 billion in raw materials, leaving a retention value of just $10 billion, excluding environmental and water costs, he added.
“Initially, the bonded warehouse facility was necessary for the garment sector,” he said, “but the local backward linkage industry has now matured and can support domestic needs.”
