BGMEA, BKMEA call for withdrawal of decision to impose duty on yarn imports from India

The Ministry of Commerce has recommended withdrawing the bonded warehouse facility to curb yarn imports from India. However, leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have called for the decision to be withdrawn, warning that it would push the readymade garment industry into crisis.

They made these remarks at a joint press conference held on Monday at the Sonargaon Hotel in Dhaka. The press conference was still ongoing at the time of filing this report.

In a written statement, BGMEA Acting President Salim Rahman said that although garment exporters are the sole buyers of yarn produced by Bangladesh’s spinning mills, the interests of the garment industry were completely ignored while taking such a sensitive and far-reaching decision. He alleged that during discussions with the Tariff Commission, BGMEA’s views were sidelined and the commission took a one-sided decision.

Salim Rahman further said that this one-sided move directly violates Articles 3 and 4 of the World Trade Organisation’s Safeguards Agreement. Under international rules, before imposing such protective duties on imports, a transparent and impartial investigation must conclusively prove that the domestic industry is suffering serious injury. That was not done in this case, he said, adding that the attempt to impose such a decision unilaterally is not only undesirable but also deeply questionable in principle.

The government’s decision to withdraw the bonded facility is aimed at protecting domestic spinning mills. On this issue, Salim Rahman said, “We believe that at this moment spinning mills do not need artificial ‘protection’ through tariffs. What they need is capacity enhancement and modernisation to improve productivity. To protect the textile sector, the government can provide direct incentives or ensure uninterrupted energy supply.”

He warned that imposing duties on yarn imports would have a negative impact on exports. Garment exports declined by 2.63 per cent during July–December of the 2025–26 fiscal year compared with the same period of the previous year, while exports fell by 14.23 per cent in December alone.

 If exporters are forced to buy yarn at higher prices, buyers will reduce orders, which would also harm indirect exporters, he said.

From the joint press conference, BGMEA and BKMEA demanded the immediate withdrawal of the decision to impose duties on yarn imports. They also put forward the following demands:

1.     Instead of imposing import duties to protect the textile sector, the government could provide direct cash assistance or special incentives.

2.     Measures should be taken to reduce production costs of spinning mills by ensuring uninterrupted gas and electricity supply, rationalising energy prices, offering corporate tax rebates to export-oriented yarn producers, and ensuring easy access to low-interest loans.

Those present at the press conference included BGMEA Senior Vice President Inamul Haque Khan, Vice President Shihab Uddouza Chowdhury, BKMEA President Mohammad Hatem, Executive President Fazle Shamim Ehsan, among others.

The reality is that to encourage and keep the export-oriented garment sector competitive, the government has been providing duty-free bonded facilities for yarn imports since the 1980s. Owners of domestic textile mills want this facility to be withdrawn, arguing that neighbouring countries are exporting yarn to Bangladesh at lower prices, putting local mills at risk of extinction.

The government's Bangladesh Trade and Tariff Commission (BTTC) agrees with the mill owners’ demands. Accordingly, the Ministry of Commerce has decided to withdraw the bonded facility for cotton yarn imports from India.