Bangladesh’s National Board of Revenue (NBR) is reviewing a proposal from the Ministry of Commerce to withdraw the bonded warehouse facility that allows the import of yarn in the 10 to 30 count range, a move aimed at shielding local spinning mills and strengthening domestic value addition.
In a letter sent to the revenue authority last week, the Ministry of Commerce recommended cancelling the opportunity to import medium and coarse yarn under the duty-free bonded scheme, which currently enables export-oriented manufacturers to bring in raw materials without paying upfront taxes. The yarn category in question is widely used in the knitwear segment and represents a sizable portion of Bangladesh’s yarn imports.
The proposal follows sustained lobbying by the Bangladesh Textile Mills Association (BTMA), which has argued that duty-free access to imported yarn has eroded the competitiveness of local spinners. Industry representatives say an influx of lower-priced yarn, mainly from regional suppliers, has led to reduced capacity utilisation and financial stress across domestic mills.
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According to industry estimates shared with policymakers, imports of 10–30 count yarn under bonded facilities have expanded in recent years, weakening backward linkages that underpin Bangladesh’s $45-billion garment export industry. Supporters of the proposed change say continued dependence on imported yarn discourages fresh investment in spinning and undermines efforts to increase local sourcing.
The recommendation comes as Bangladesh prepares for graduation from least-developed country status, a transition expected to reduce trade privileges in key export markets. Officials say enhancing local value addition will be critical to maintaining competitiveness once preferential market access begins to taper off, making the role of domestic textile production more strategic.
Garment exporters, however, have cautioned that removing the bonded import facility could raise costs and strain supply chains, particularly for small and mid-sized factories that rely on imported yarn to meet tight delivery schedules. They have urged the NBR to consider phased or partial measures to avoid disruption.
The NBR is expected to consult stakeholders before reaching a final decision, with any policy change likely to have broad implications for the textile and apparel supply chain as Bangladesh recalibrates its trade and industrial policies.
