Bangladesh’s largest garment exporters have stepped up their opposition to a government yarn import policy taken recently to withdraw duty-free bonded warehouse facilities for yarn imports, warning that the move could cripple the country’s crucial ready-made garment (RMG) industry.
Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on Monday demanded the immediate withdrawal of the proposal, describing it as “suicidal” and one-sided. They told a joint press conference in Dhaka that restricting bonded yarn imports — particularly medium counts of 10–30 range used widely by knitters and garment makers — would sharply raise raw material costs and hurt Bangladesh’s export competitiveness.
Under a long-standing incentive scheme dating back to the 1980s, exporters have been allowed to import yarn duty-free under a bonded facility to keep production costs low. But the Commerce Ministry has formally recommended to the National Board of Revenue (NBR) to suspend this benefit for selected yarn counts in a bid to protect domestic spinning mills from cheap imported fibre and strengthen backward linkages ahead of Bangladesh’s graduation from least developed country status.
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BGMEA Acting President Selim Rahman said garment exporters were not adequately consulted before the move was advanced, accusing the tariff commission and commerce ministry of ignoring their concerns. He argued the decision could violate World Trade Organization safeguard rules by imposing barriers without transparent injury findings.
Industry representatives warned that yarn costs could surge significantly if bonded imports are curtailed, forcing buyers to absorb or pass on higher prices at a time when global demand for apparel is weak. They said international brands have already expressed concern, raising fears that orders could shift to competing hubs such as Vietnam and India.
The garment sector, which accounts for more than 80 per cent of Bangladesh’s export earnings, has been under pressure from rising input costs, energy supply constraints and weakening global demand. Exporters stressed that the policy change would exacerbate these challenges and could trigger stricter actions by industry groups if the plan goes ahead.
Proponents of the withdrawal argue that cheap imported yarn — largely sourced from India — has eroded the viability of local spinning mills, leading to factory closures and underutilized capacity. Commerce officials have said the government wants to boost local value addition and prepare the textile supply chain for post-graduation trade rules.
As of now, the NBR has yet to implement the directive, and a final decision is expected after further review. Exporters are urging policymakers to consider alternative support measures, such as direct incentives for local producers and steps to lower energy and financing costs, instead of curbing bonded imports.
