BTMA Seeks PM’s Intervention to Shield $32b Spinning Industry

Bangladesh’s $32 billion primary textile industry is seeking urgent government intervention to stem mounting pressure on domestic spinning mills, protect jobs and prevent further erosion of industrial capacity without undermining the competitiveness of garment exporters.

In a statement issued on Sunday, the Bangladesh Textile Mills Association (BTMA) urged the Prime Minister to maintain the withdrawal of bonded warehouse facilities for imports of cotton yarn in the 10�"30 English count range, continue the bank guarantee-based import system and restore the requirement for 30 per cent local value addition.

The association said the primary textile sector, particularly spinning, represents around $32 billion in investment, extensive manufacturing infrastructure and a substantial workforce. 

Reviving the sector’s production and financial capacity would help reopen closed and partially closed spinning and weaving mills, safeguard existing jobs, create new employment and improve loan recovery by banks and financial institutions, easing the burden of non-performing loans.

The BTMA argued that withdrawing bonded warehouse facilities for imported cotton yarn in the 10�"30 English count range, equivalent to approximately 16.93�"50.80 metric count, did not amount to imposing new duties or banning imports. 

Under an order issued by the National Board of Revenue (NBR), imports could continue against bank guarantees covering applicable duties and taxes, it said.

Such guarantees are generally issued under non-funded exposure facilities and would not necessarily put additional pressure on importers’ working capital, the association said noting that the mechanism could curb misuse of bonded facilities, protect government revenue and ensure fairer competition between locally produced and imported yarn.

The BTMA proposed encashing guarantees under the applicable rules if importers failed to provide timely evidence that the yarn had been used for authorised purposes. 

Guarantees could be released after verification of exports and repatriation of export proceeds. Digital monitoring and risk-based audits would strengthen oversight without disrupting legitimate export operations, it added.

The association also called for a phased increase in local value addition from 30 per cent to 40�"60 per cent for non-bonded industries importing raw materials against bank guarantees. 

It urged the government to frame the policy in line with World Trade Organization rules, rules of origin and, where applicable, double-transformation requirements as Bangladesh prepares to graduate from the least developed country (LDC) category.

The BTMA maintained that stronger domestic textile production and competitively priced raw materials for apparel exporters were compatible goals, provided the government adopted a balanced policy backed by transparent implementation and effective monitoring.

It has asked the Prime Minister to direct the relevant authorities to consider its proposals in light of industrialisation, employment, revenue protection and export competitiveness in the post-LDC graduation period.

Describing the spinning and ready-made garment industries as complementary pillars of Bangladesh’s textile supply chain, the association said a coordinated, long-term strategy was essential to protect investment, restore industrial capacity, improve bank loan recovery and sustain export growth.