After more than five months of deliberations, the Bangladesh Tariff Commission (BTC) has yet to finalise its position on the contentious issue of yarn imports, although officials indicated that a report is expected within days.
Industry sources said the commission is likely to recommend excluding 10–30 count yarn from duty-free imports under the bonded warehouse facility, a proposal being closely monitored by both domestic spinners and apparel exporters. The prolonged review reflects sharp divisions within the textile and garment value chain, with spinners seeking greater protection from imports and exporters warning that restrictive measures could undermine Bangladesh’s competitiveness in global apparel markets.
Officials attributed the delay to fundamental differences between the two sides. Local spinners have been pressing for the imposition of a 20% safeguard duty on yarn imports to shield domestic spinning mills. Apparel exporters, however, have cautioned that such measures would raise input costs and could prompt international buyers to divert orders to competing sourcing destinations.
Exporters have also pointed out that several global buyers nominate Indian spinners as yarn suppliers due to lower production costs, raising concerns that curbs on imports could disrupt established supply chains. A senior official of the Bangladesh Textile Mills Association (BTMA) was quoted as saying that excluding a limited number of yarn categories from duty-free imports would provide little meaningful relief to local spinners.
According to sources at the BTC, six stakeholder meetings have been held since September last year, involving spinners and apparel exporters. Four meetings were chaired by former BTC chairman Dr Moinul Khan, while the issue is now under the review of acting chairman Md Abdul Gafur. A commission official, speaking on condition of anonymity, said the recommendations are expected to be submitted by Tuesday, 13th January, after balancing the interests of both sectors.
A senior executive of a leading textile group said the spinning sector is under severe pressure as orders continue to decline. The executive attributed the slowdown to consecutive months of negative growth in apparel exports and noted that demand typically falls by 25–30% during election periods. The executive also highlighted that Indian spinners are selling yarn below production costs due to government subsidies, while recent gas price hikes in Bangladesh have further eroded the competitiveness of local mills, prompting calls for targeted energy subsidies.
Meanwhile, apparel exporters have proposed restoring the earlier 4% cash incentive for the use of locally produced yarn, which has since been reduced to 1.5%, as an alternative means of supporting domestic spinners. The Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Fazlee Shamim Ehsan, was quoted as saying that safeguard duties or exclusions from bonded facilities would increase production costs and weaken apparel exports by forcing manufacturers to purchase higher-priced local yarn.
Ehsan also noted that excluding yarn from bonded warehouse facilities would negatively affect exports, adding that Bangladesh’s duty drawback mechanism remains complex and costly due to multiple ancillary charges. He highlighted a production cost gap of 30–50 cents between Indian and Bangladeshi yarn and urged policymakers to consider incentive-based support measures rather than tariff barriers.
