Govt moves to halt yarn imports through land ports
Apparel exporters have expressed concerns that restricting yarn imports through land ports could negatively impact small and medium-sized factories
Highlights:
- Textile millers request restrictions to protect local mills
- Claim land ports lack proper inspection system
- Urge shift to seaports for better oversight
- Apparel exporters warn of impact on small factories
- Industry leaders call for anti-dumping duties on yarn
The government has initiated steps to ban the import of yarn through land ports to prevent misuse of the facility, as these ports lack the capacity to properly identify different categories of yarn, according to sources at the Ministry of Commerce.
Ministry officials stated that the decision follows a request from textile millers, who have long argued that yarn imports through land ports undermine local industry.
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Instead, they proposed that yarn, a key raw material for the ready-made garment (RMG) industry, should be imported only through seaports.
Apparel exporters have expressed concerns that restricting yarn imports through land ports could negatively impact small and medium-sized factories that rely on them for easier and more cost-effective access to raw materials.
"The sudden ban will put additional pressure on small factories, particularly those in border areas, which depend on land ports for quick and flexible imports. This could lead to financial distress," said a senior official from the Bangladesh Garment Manufacturers and Exporters Association.
BTMA's rationale for the ban
The Bangladesh Textile Mills Association (BTMA), representing spinning and textile mill owners, made the request for the ban in a letter to Finance Adviser Salehuddin Ahmed.
The letter, signed by BTMA President Showkat Aziz Russell, was forwarded to the National Board of Revenue in late January for regulatory consideration.
Showkat noted that a previous policy revision had allowed yarn imports through land ports but these ports lack the necessary infrastructure to scrutinise raw materials.
Additionally, the policy permitted partial shipments, which, according to industry observations, has led to widespread misuse, adversely affecting local mills.
"We have seen growth in apparel exports in the new fiscal year, yet local mills are struggling due to multiple challenges, including low orders," he said.
He also pointed out that while Bangladesh's textile industry faces difficulties, India's textile exports to Bangladesh have grown significantly, which he argued is detrimental to the country's interests.
"It is absurd that policies are being implemented against local industries and job creation. We believe the interim government will revise this decision to protect domestic industries," he added.
In its letter, BTMA warned that allowing continued yarn imports through land ports would cause irreparable damage to the country's textile sector, increasing reliance on imported yarn and leading to higher import costs and unemployment.
Concerns from apparel sector
Meanwhile, industry leaders warn that the move could disrupt the supply chain, increase production costs, and affect Bangladesh's competitiveness in the global apparel market.
Larger factories can source materials through seaports or local suppliers, but smaller manufacturers often lack these alternatives.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem stated that textile millers have large stockpiles due to the previous government's decision to reduce cash incentives on local yarn.
He added that apparel exporters are unwilling to accept such low incentives and that local textile millers are not competitive in pricing compared to their counterparts in other countries.
Citing research data, he noted that the price of 30 single yarn in Bangladesh is $3.40 per kg, whereas it is $2.90 per kg in India and $2.96 per kg in Vietnam.
Hatem also raised concerns about the volume of yarn imports through land ports and the percentage they constitute of total imported yarn.
He warned that a ban on yarn imports via land ports would negatively impact small and medium-sized factories, as well as fast fashion apparel manufacturers since seaports require a longer lead time.
BKMEA Executive President Fazlee Shamim Ehsan told TBS, "While we understand the government's concerns, a complete ban may not be the best approach. Instead, improving monitoring and customs procedures at land ports would be a more effective solution."
Exporters and industry leaders have urged the government to reconsider the decision, suggesting phased implementation or exemptions for smaller factories to mitigate the impact.
Challenges facing textile sector
The textile sector is already facing difficulties due to rising gas and electricity prices, the dollar crisis, soaring interest rates, reduced export incentives tied to LDC graduation conditions, and the depreciation of the taka.
Meanwhile, yarn and fabrics entering the local market at dumping prices from India through various land ports have created new challenges for domestic textile mills.
The BTMA letter highlighted the risks of yarn imports, noting that land ports such as Benapole, Bhomra, Sona Masjid, and Banglabandha lack proper infrastructure, yarn count measuring equipment, skilled manpower, and effective oversight.
As a result, import and export trade is not being efficiently managed.
Additionally, textile mills face unfair competition due to the marketing of unauthorised yarn, often imported through land ports with false customs declarations.
This practice not only harms local industries but also results in significant revenue losses for the government.
The letter further stated that the policy permitting partial shipments has been widely misused, allowing multiple imports under the same letter of credit beyond approved limits.
BTMA suggested that shifting yarn imports to seaports would help protect the domestic textile sector and preserve valuable foreign exchange.
Seaports, they argued, have superior infrastructure, including high-quality scanners and yarn count measuring machines, and typically process imports within 13 to 15 days.
During a meeting at the Ministry of Commerce yesterday (24 March), its secretary, Mahbubur Rahman, requested BTMA to provide supporting documents regarding allegations of dumping practices by Indian exporters.
He noted that India has imposed anti-dumping duties on several goods from different countries, including Bangladesh, and assured that if the claim is substantiated, the government will take necessary action.
BKMEA Executive President Fazlee Shamim Ehsan echoed the proposal for imposing anti-dumping duties, advocating for stronger regulatory measures to ensure fair trade practices.
