Bangladesh's Textile Industry at a Crossroads: A Looming Shutdown?
The textile sector in Bangladesh is facing an unprecedented crisis, with a potential shutdown looming on the horizon. Domestic textile millers are issuing dire warnings, stating that spinning units across the country may cease operations as early as February 1st if the government fails to address their concerns.
But here's where it gets controversial... The interim government is under immense pressure to revoke the duty-free import facility for yarn, particularly under the bonded warehouse system. This move has sparked a heated debate, pitting textile millers against garment exporters.
For years, Bangladesh's garment industry has relied heavily on imported cotton yarn from India and polyester yarn from China. While this strategy offered competitive pricing and consistent quality, it has now backfired, pushing the domestic textile industry into a financial quagmire. The ongoing gas crisis has exacerbated the situation, with the textile sector incurring losses of nearly $2 billion over the past few months due to gas shortages and rising energy prices.
The Bangladesh Textile Mills Association (BTMA) paints a grim picture, stating that cheap Indian yarn has flooded the domestic market, leaving over Tk 12,000 crore worth of unsold stocks. More than 50 textile mills have already shut down, leaving thousands of workers without jobs. Millers are also struggling to repay loans as financial pressures mount.
The key demands of textile millers include the immediate withdrawal of duty-free import facilities for yarn, particularly 10 to 30 count cotton yarn, along with subsidized and uninterrupted gas supply, reduced VAT collection during the crisis, lower interest rates on bank loans, and a broader dialogue with the government to stabilize the sector.
Government data reveals that Bangladesh imported nearly 70 crore kilograms of yarn in 2025, with India supplying a significant 78% of these imports. The BTMA warns that a shutdown of spinning units could affect nearly one million workers nationwide and potentially trigger social unrest.
And this is the part most people miss... The standoff has exposed a deep divide between textile millers and garment exporters. While millers argue that domestic production can meet national demand, the Bangladesh Garment Manufacturers and Exporters Association disagrees. Garment exporters claim that locally produced yarn is more expensive and of lower quality compared to imported Indian yarn, which is preferred by international apparel brands for its superior quality and consistency.
Amit Soti, an Indian yarn exporter, sheds light on the situation, stating, "Bangladesh garment exporters enjoy duty-free benefits on raw material imports under bonded facilities. Suspending bonded imports of yarn will increase costs for manufacturers, ultimately hurting Bangladesh's export industry."
As the pressure mounts, Bangladesh's textile and apparel sector, a major employer and foreign exchange earner, finds itself at a critical juncture. Without a balanced policy decision, the conflict between millers seeking protection and exporters demanding competitiveness risks pushing the industry into prolonged economic and social instability.
What are your thoughts on this complex issue? Should the government prioritize protection for domestic industries or focus on maintaining competitiveness in the global market? We'd love to hear your opinions in the comments below!
