Textile millers in the country are grappling with significant challenges due to illegal trading of bonded yarns and other forms of smuggling across the country's borders. Insiders in the textile sector said illegal import of fabrics from neighboring countries, combined with the misuse of duty-free bonded warehouse yarns, is costing the industry a lot.
Trading in particular of smuggled fabrics in some bordering areas cost nearly Tk 8.5 billion each per month. This surge in smuggling not only harms legitimate businesses but also results in an estimated Tk4.25 billion loss in customs duties and value-added taxes.
Industry experts warn that the current wave of smuggling undermines the government's revenue collection efforts and exerts immense pressure on authorized businesses. The economic strain from these illegal activities slows down the textile industry, which plays a crucial role in job creation and foreign exchange earnings for Bangladesh.
Additionally, ongoing issues such as gas and power shortages have significantly hampered production capacities, further complicating the landscape.
A former office bearer of BTMA has pointed out that authorities could alleviate some financial burdens on manufacturers by lowering gas prices to Tk 16 per cubic meter. Addressing the gas transmission system loss, which currently stands at 10 to 12 percent, is also critical for improving overall efficiency in the industry. Some stakeholders suggest military involvement may be necessary to combat systemic inefficiencies and bolster border security.
According to reports, smugglers at Shimanta Haat employ specially designed trucks with concealed compartments to transport illegal goods across the border. To tackle these issues effectively, insiders propose the establishment of designated unloading zones for immediate inspections of incoming goods. If inspectors identify smuggled items, they could impose instant duties and VAT, which would help mitigate financial losses from smuggling.
Insiders have highlighted the problematic practice of "luggage parties," where approximately 150 individuals cross the border daily, each carrying clothing valued between Tk 2-3 lakh. It is recommended that immigration authorities closely scrutinize the travel motives of these frequent crossers to deter smuggling activities. Enhanced vigilance at border checkpoints could significantly reduce the flow of illicit goods into the country.
"The use of casual travelers as conduits for smuggled goods has been a persistent challenge," warned a local textile industry expert. He stressed that without proactive measures, local businesses face collapse. The exploitation of porous borders complicates matters further, emphasizing the need for strengthened surveillance and an increase in checkpoints to identify and prevent smuggling attempts.
Industry stakeholders agree the government, law enforcement agencies, and business representatives must collaborate to develop comprehensive strategies aimed at safeguarding this vital sector. Ongoing discussions regarding the effectiveness of the Shimanta Haat model have revealed that many consider it unsuitable for Bangladesh's economic context and advocating for its discontinuation to protect the textile industry.
