The Bangladesh Textile Mills Association (BTMA) has raised an alarm over the worsening crisis in the country’s primary textile sector, warning that continued inaction could soon force many mills to shut down. In a statement issued Sunday, BTMA President Showkat Aziz Russell highlighted a series of compounding challenges, including energy price hikes, foreign exchange shortages, and damaging import policies, that are crippling domestic producers.
Russell pointed to a sharp rise in input costs, with gas prices more than doubling and electricity tariffs increasing, while the depreciation of the taka has worsened the dollar crisis, raising import costs and drying up working capital. At the same time, bank interest rates have surged from 9% to 15–16%, while cash incentives for exports have been drastically reduced, dealing further blows to textile competitiveness.
“To make matters worse,” he said, “duty-free yarn imports from neighboring and other countries are flooding the market, putting domestic mills under unsustainable pressure. If this continues, we risk factory closures on a large scale.”
The BTMA, which represents 1,858 member mills including spinning, weaving, dyeing, printing, and finishing operations, said the sector currently accounts for $23 billion in private investment—the highest in any single industry. The broader textile and garment sector totals $75 billion in investment, and Russell believes this figure could support $100 billion in export earnings by 2030, provided the government intervenes with strong policy support.
Despite government promises—such as the July 7 commitment to withdraw the 2% Advance Income Tax (AIT) on cotton and fiber imports—no concrete action has yet been taken. “Producers in neighboring countries are already benefiting from our delays,” Russell said, adding that no other country imposes such taxes on raw material imports for intermediary industries.
He also criticized the imposition of a Tk 5 per kg specific tax on yarn made from cotton blends and artificial fibers. “This will drive up the cost of domestically produced fabrics,” he warned, “and discourage lower- and middle-income consumers from buying local. If not withdrawn immediately, this tax will accelerate the collapse of local mills, triggering a chain crisis across banks, insurance companies, and other financial institutions.”
The BTMA further reported that production costs in Bangladeshi factories have increased by 15–20%, driven by fuel shortages, higher wages, and global supply disruptions. The spinning sector is especially hard-hit, operating at nearly half its production capacity due to insufficient gas and electricity supply.
Russell’s statement is a stark warning that without urgent and coordinated government support, one of Bangladesh’s most vital industries may face a wave of bankruptcies—jeopardizing not only exports and jobs but also the country’s broader financial stability.
Bd-pratidin English/ Jisan
