Md Shahidul Islam, former vice president of BGMEA and managing director of Rupa Group, warned that the proposed tariff policy on 10 to 30-count yarn would seriously harm Bangladesh's knitwear exports.
He stressed that the industry had grown over four decades because governments provided critical facilities, including back-to-back letters of credit, bond facilities, and strong incentives for using locally produced cotton yarn.
Exports rose from $23 thousand to $45 billion on such support, he said adding, many of these facilities now have been curtailed. Bangladesh still imports more than it exports and he insisted that restricting business in this way undermines the economy.
Shahidul Islam explained new recommendation, intended to protect local spinners now sitting on unsold stock worth Tk120 billion was misguided. Local mills claim they need such protection, but exporters cannot survive when forced to purchase local yarn at prices 30 to 40 cents higher per kilogram than imported alternatives.
He emphasized the difference in price has become a serious burden. Once, exporters willingly paid 10 to 15 cents more for local yarn because it remained tolerable, but the current gap makes them uncompetitive globally. While spinners call for business to buy from them, he said adding that they fail to operate efficiently in the open market.
He said, "We import from India, Turkey, China, Indonesia and Vietnam cheaper and readily available, yet local mills insist on an artificial captive market." He condemned the policy as turning exporters into hostages rather than supporting the industry.
The business leader highlighted that local spinners cannot compete internationally partly due to gas and power shortages. Gas prices for spinners have jumped from Tk 3 per cubic meter when the industry was grooming to Tk40 now and many mills are running at only 60 per cent capacity.
Incentives for using local yarn have dropped from 25 per cent to just 1.2 per cent, he said. After COVID-19, when RMG orders surged, yarn prices increased dramatically, forcing exporters to pay higher costs for fabrics and yarns.
This, coupled with the curtailment of incentives and facilities, has put the knitwear sector under significant strain. Reducing bond facilities or removing duty benefits now would worsen the situation and risk further loss of orders.
Shahidul Islam underscored that the industry operates in an open, competitive world. Other countries provide support to improve efficiency rather than restrict business, but Bangladesh is moving in the opposite direction.
He stated that it is illogical to force exporters to buy local yarn when it is costlier and supply is inconsistent. The solution, he said, lies in modernisation, diversification, and efficiency of the system. Local mills need to upgrade their operations, expand capacity, and produce a wider range of yarns to meet global buyer demand.
He recommends enforcement of government support measures, including a 5 per cent cash incentive for using local yarn, corporate tax rebates for export-oriented yarn producers, low-interest loans to reduce production costs, and ensuring adequate gas and power supply.
These steps, he argued, are essential to protect the $25 billion invested in the primary textile sector and maintain competitiveness as Bangladesh approaches post-LDC graduation. He warned that curtailing business, as the current policy suggests, would harm not only exporters but also the broader economy and thousands of workers dependent on the knitwear industry.
Md Shahidul Islam concluded that protecting local mills should not come at the cost of restricting exporters. Efficient, competitive, and modern mills, coupled with sensible government support, are the only way to sustain growth. Anything less, he stressed, risks reducing Bangladesh's ability to meet global market demands and jeopardizes the achievements of decades of export growth.
