Two major garment exporters’ organisations today (19 January) called on the government to withdraw the move to scrap the duty-free import facility for yarn, warning that the decision would intensify pressure on an already strained export sector.
At a joint press conference organised by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) at the Pan Pacific Sonargaon Hotel in Dhaka, BGMEA Acting President Salim Rahman described the situation as an “extreme existential crisis” for the industry.
He said the garment sector, which accounts for the bulk of Bangladesh’s export earnings, is already facing “triple challenges from global recession, geopolitical instability and domestic energy constraints.”
“However, it is a matter of great regret that while these challenges are cornering our industry, a suicidal decision like the imposition of duty on yarn imports has come before us,” he said.
Salim stated that garment exporters are the primary buyers of yarn produced by local spinning mills, yet their concerns were not reflected in the government’s approach.
He alleged that the Trade and Tariff Commission made a “unilateral decision” while discussions with exporters were still underway.
“It is surprising that the interests of the garment industry have been completely ignored in making such a sensitive and far-reaching decision,” he said.
He further claimed that the process violated Clause 344 of the World Trade Organisation’s Safeguard Agreement.
“According to international policies, before imposing any such protective duty on imports, the issue of ‘serious injury’ to the local industry must be indisputably proven through a transparent and impartial investigation. But this was not done here,” Rahman said.
Terming the move “disastrous” for both the sector and the wider economy, he said the knitwear segment alone accounts for 55% of total garment export earnings, or $27 billion, and provides employment to millions.
“The envy-inducing growth of this sector since the eighties is primarily based on the opportunity to import duty-free raw materials under the bond facility,” he said.
Rahman argued that the increase in yarn imports in recent years reflects market demand linked to export growth. He noted that yarn import prices in a neighbouring country had fallen from Tk428.37 per kg in FY2022-23 to Tk389.18 in FY2024-25, indicating that buyers were sourcing more competitively.
“Yet, it is extremely unfortunate that this normal picture of yarn import has been presented negatively to justify the withdrawal of bond facilities,” he said, adding that such misinterpretation puts $27 billion in knitwear exports at risk.
The press conference followed a significant policy shift in which the commerce ministry formally requested the National Board of Revenue on 12 January to suspend duty-free yarn imports under the bonded warehouse facility.
The change, aimed at protecting the domestic spinning industry, could raise import taxes to about 37%.
While the NBR had not implemented the directive as of 18 January, the proposal has triggered strong resistance from garment manufacturers and widened the divide between textile millers and exporters.
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