Textile millers urge anti-dumping duty on Indian yarn imports

Textile millers have accused their Indian counterparts of dumping yarn and fabric in the Bangladeshi market as part of a "conspiracy" to destroy the local industry, urging the government to initiate anti-dumping measures to protect the sector.

"We are convinced that this is a deliberate conspiracy aimed at destroying our textile and garment industries, just as our jute industry was destroyed," alleged Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA).

At a press conference at Gulshan Club yesterday, he said, "The Indian government, through subsidies and various support schemes, is behind this plot."

The business leader said that Indian mills have become a threat to Bangladesh's industry by selling yarn and fabric at prices lower than production costs, which are being smuggled through illegal channels and land ports.

This practice is known as dumping where a product is sold abroad that is lower than the price at which it is sold domestically.

"We have already appealed to the government to stop the import of yarn through land ports and to impose anti-dumping duties on Indian yarn," he said.

"We request [the government] that imports through land ports be halted until the capacity of our land ports is improved to prevent false declarations of yarn."

He also urged the interim government to investigate the dumping by Indian mills.

Russell said that during the period of the BNP government in 2001-2006, the import of yarn through land ports was stopped, but after the Awami League came to power, it was resumed.

Indian yarn exports to Bangladesh surge

According to National Board of Revenue data, in 2024, Bangladesh's cotton yarn imports surged by over 39%, reaching a record expenditure of $2.28 billion. Additionally, fabric imports by knitwear factories rose by 38%, costing the country another $2.59 billion.

The BTMA president claimed that the industry has the capacity to supply nearly 100% of the demand for export-oriented knit garments. However, due to certain buyers' nominations, a portion of the demand must still be met through imports, he added.

BTMA data show that two years ago, local mills supplied around 85% of the yarn for knitwear exports.

They point to the fact that due to rising imports, local mills' sales have decreased significantly, leading to an increase in yarn stockpiles at local mills valued at Tk8,000 crore – Tk10,000 crore.

Saleudh Zaman Khan, vice president of BTMA, said cotton yarn production costs in both countries are comparable, at around $3 per kilogram. However, Indian millers are exporting at lower prices than their local market selling prices, which he described as a form of dumping in Bangladesh.

Explaining further, he said, "While we sell yarn at $3 per kilogram, Indian exporters are selling the same yarn at $2.90. Due to open costing methods, apparel exporters are unable to benefit from this, except by receiving orders at lower prices."

He said Bangladesh's garment factories are not benefiting from the lower yarn prices, as the advantage ultimately goes to buyers.

Khan said the Indian government provides additional financial and policy benefits to its textile exporters, both at the central and state levels, giving them a competitive edge.

"Textile exporters in India benefit from a negotiable instrument offering 3.88% of the export value or ₹11 per kilogram, whichever is lower. This scheme is known as the Remission of Duties or Taxes on Exported Products (RoDTEP)," he explained.

In addition to this, exporters receive a 2% duty drawback on textile product exports. Combined, these incentives amount to about 6% of their total export value.

According to the Indian Trade Portal, the RoDTEP scheme is designed to help exporters recover the taxes and duties paid on exported goods. It has been in effect since January 2021. Furthermore, various states in India offer additional benefits to their textile entrepreneurs.

Call to reduce gas prices to Tk20 per unit

Saleudh Zaman Khan also demanded that the price of gas be reduced to below Tk20 per unit, saying due to the ongoing gas crisis, mills are only operating at 50%-60% capacity.

Engineer Rajib Haider Munna, a director of BTMA, questioned, "For whose benefit is LNG import being encouraged when there are gas reserves underground?"

He further said textile and garment industries cannot survive by relying on LNG imports. He warned that factory closures might be imminent, saying, "It will be impossible to run factories with gas at Tk70. Therefore, on the day of the hearing at the Bangladesh Energy Regulatory Commission (Berc), we will hand over the keys to our factories."

BTMA Vice President Md Abul Kalam demanded that interest rates be brought down to single digits to encourage investment and called for them to be fixed at single digits for the next three years.

Additional challenges confronting textile industry

Textile mills association leaders claimed that the industry is facing mounting challenges due to high production costs, despite a $22 billion investment in the textile sector.

Textile mill owners said production costs have increased by 30% over the last two years due to higher gas prices, rising wages and inadequate gas supply. Despite expanding their capabilities, mills are finding it hard to reduce costs.

Moreover, government incentives for using local yarn have been significantly reduced, they said. Cash incentives have dropped from 4% to 1%, while special incentives have fallen from 1% to 0.3%.

These incentives take up to a year to be processed, and after a 10% tax deduction, additional costs are incurred. As a result, garment exporters are less inclined to use local yarn, according to millers.

Local spinning mills are also unable to lower prices due to a sharp 179% rise in gas prices, the implementation of new wage structures and increased bank loan costs coupled with stringent conditions.