Following news reports published in several national dailies on 17 October 2026 regarding the withdrawal of bonded warehouse facilities for imports of 10–30 count cotton yarn, the Bangladesh Textile Mills Association (BTMA) wishes to clarify that any policy assessment on this issue should give equal importance to the USD 32 billion investment, production capacity and employment in the primary textile industry, particularly the spinning sector, as well as the availability of raw materials and international competitiveness of the export-oriented apparel industry.
The withdrawal of bonded warehouse facilities does not mean a ban on yarn imports, nor does it introduce any new customs duty. Following the decision of an inter-ministerial committee, the relevant order issued by the National Board of Revenue (NBR) allows imports against bank guarantees equivalent to the applicable duties and taxes, without imposing any new duties or taxes.
As banks generally issue guarantees against non-funded exposure, this arrangement is not expected to create a working capital constraint for importers. The objective is not to disrupt legitimate import and export activities, but to prevent misuse of facilities, safeguard government revenue and ensure a level playing field between domestically produced and imported yarn.
Protecting Domestic Investment, Production and Employment
The country’s spinning industry represents substantial domestic investment, extensive production infrastructure and significant employment opportunities. If the industry’s production and financial capacity can be restored, closed and partially closed spinning and weaving mills may be able to resume operations. This would help protect existing jobs while creating opportunities for additional employment.
The normalisation of industrial operations would also contribute positively to loan recovery by banks and financial institutions and help reduce the pressure of non-performing loans. Therefore, this issue concerns not only the interests of a particular industrial sector but also investment protection, financial sector stability and the broader national economic interest.
Bank Guarantees, Revenue Protection and Accountability
A bank guarantee-based import system provides scope to verify whether imported yarn has been used for its authorised purpose and to ensure accountability on the part of the relevant importers.
If the required documents, including proof of export, are not submitted within the prescribed timeframe, the guarantee may be encashed in accordance with applicable regulations. This would help reduce the risk of imported goods being sold in the domestic market without authorisation and strengthen government revenue protection.
Similarly, releasing guarantees only after verifying the completion of exports and the repatriation of export proceeds into the country, in accordance with applicable regulations, would further strengthen transparency and accountability. Through appropriate digital monitoring and risk-based audits, misuse can be prevented while keeping legitimate export activities uninterrupted.
Yarn Prices and Order Relocation: The Need for Comprehensive Comparative Analysis
Claims regarding increases in domestic yarn prices or the relocation of apparel orders to competing countries, including India and Egypt, must be verified using reliable and comparable data. To determine the actual procurement costs of comparable domestic and imported yarn, it is necessary to consider not only product quality and specifications but also transportation costs, applicable duties and taxes, bank charges, financing costs and other associated expenses.
International buyers do not make sourcing decisions solely on yarn prices. Productivity, quality, technology, the capabilities of garment factories, supply reliability and timely delivery are also important factors. Therefore, without verifiable evidence, it would not be appropriate to identify a single policy decision as the sole reason for the relocation of apparel orders.
Protecting investment and capacity in the domestic primary textile industry, particularly the spinning sector, while ensuring the timely supply of raw materials at competitive prices to the export-oriented apparel industry are not conflicting objectives. A balanced policy framework, transparent implementation and effective monitoring can support the sustainable development of both sectors.
BTMA’s Appeal for Kind Consideration by the Hon’ble Prime Minister and Relevant Government Authorities
Considering the country’s industrialisation, employment, revenue protection and competitiveness following LDC graduation, BTMA respectfully places the following proposals before the Hon’ble Prime Minister and the relevant government authorities for their kind consideration:
- Continuation of the Current Import System: Maintain the decision to withdraw the existing bonded warehouse facilities for cotton yarn of 10–30 English count (Ne), equivalent to approximately 16.93–50.80 metric count (Nm), while continuing the bank guarantee-based import facility for genuine exporters.
- A Practical Policy Framework for Local Value Addition: Reinstate the requirement of 30% local value addition for raw material imports by non-bonded industries under the bank guarantee-based system. In preparation for LDC graduation, develop a policy framework that progressively targets a minimum of 40–60% local value addition in the post-graduation period, taking into account WTO provisions, Rules of Origin and the Two-Stage Transformation requirements applicable to relevant products.
Proper review and implementation of these proposals could help preserve investment and production capacity in the domestic spinning industry, create employment, improve bank loan recovery and establish a favourable environment for export growth.
BTMA calls for the development of a transparent, balanced and long-term policy framework through constructive dialogue with all relevant stakeholders. At the same time, the association seeks the government’s cooperation in reviewing these proposals in the national economic interest, making appropriate policy decisions and issuing necessary instructions to the relevant authorities.
The domestic spinning and ready-made garment industries are complementary to each other. Coordinated initiatives to strengthen the capabilities and competitiveness of both sectors can provide a solid foundation for Bangladesh’s long-term industrial development, employment generation and export growth.