Bangladesh’s commerce ministry has suspended a week-old decision to strip cotton yarn of 10 to 30 count of its duty-free bonded import status, bowing to pressure from garment exporters who said the policy was imposed without consultation.
The ministry notified the National Board of Revenue (NBR) on September 13 that the move, which would have required importers to post bank guarantees instead of using the bonded warehouse facility, had been put on hold pending further review, according to a letter to the NBR chairman. Read Here
The NBR had ordered the withdrawal on September 7 in a gazette notification, arguing that cheap yarn imports, including volumes entering through informal channels from neighbouring countries, were undercutting local spinning mills. The change would have forced knitwear and garment manufacturers to import the yarn category against bank guarantees rather than under the zero-duty bond system exporters have long relied on.
Md Kamal Hosain, spokesperson for the commerce ministry, confirmed the reversal in a circular shared with reporters. The rollback follows objections from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), whose members said the original order threatened raw material access for export-oriented factories.
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BKMEA President Mohammad Hatem said the earlier decision had been taken unilaterally, without input from exporters, and welcomed the suspension. He said future policy on yarn imports should be decided jointly by the Bangladesh Textile Mills Association (BTMA), BGMEA and BKMEA to balance the interests of spinners and exporters alike.
The 10-30 count segment accounts for nearly 80% of Bangladesh’s annual yarn consumption, concentrated mainly in knitwear fabric production, industry sources say. Local spinners currently meet more than 90% of that demand for the export-oriented knitwear sector, though millers argue duty-free imports still erode their market share.
The dispute underscores tensions within Bangladesh’s $25 billion textile industry, which spans spinning, weaving, dyeing, finishing and printing, as policymakers try to balance protection for domestic mills against exporters’ need for competitively priced raw materials ahead of peak shipment season. No timeline was given for a final decision on the bonded facility’s future.