Bangladesh’s textile (garment) industry is facing a serious crisis. Textile mill owners have warned the government that they will shut down mills nationwide from February 1 if duty-free imports of yarn are not halted by the end of January.
According to media reports, Bangladesh’s Ministry of Commerce has recommended to the National Board of Revenue that the duty-free facility currently provided for imported yarn be withdrawn. Mill owners claim that the domestic market has been flooded with cheap yarn imported from India, causing severe losses to local industries. They argue that fair competition has been undermined and warn that the closure of mills could result in the loss of jobs for one million workers.
One Million Jobs at Risk
The Bangladesh Textile Mills Association (BTMA) has cautioned the government, stating, “If mills are closed from February 1, the livelihoods of nearly one million workers will be affected.”
There are growing concerns that this situation could also lead to increased social unrest. Despite this, the government has not yet announced any relief measures regarding value-added tax (VAT).
Over 50 Mills Closed, Yarn Worth BDT 15 Billion Stockpiled
Bangladesh’s ready-made garment manufacturers have been importing cotton yarn from India and polyester yarn from China for years. However, over the past three to four months, additional challenges have emerged due to gas shortages, irregular supply, and rising energy prices.
According to BTMA, large-scale imports of cheap Indian yarn have resulted in approximately BDT 15 billion worth of domestically produced yarn remaining unsold and stockpiled. More than 50 textile mills have already shut down, and thousands of workers have lost their jobs. Many industrialists are struggling to repay bank loans.
78 Percent of Yarn Imported from India
Government data show that in 2025, Bangladesh imported around 700 million kilograms of yarn worth approximately USD 2 billion, with 78 percent imported from India.
Spinning mill owners have demanded an end to duty-free imports of cotton yarn ranging from 10 to 30 counts. They have also called for cheap and uninterrupted gas supply, VAT relief during the crisis, reduced bank interest rates, and the establishment of direct dialogue with the government.
On the other hand, garment importers argue that Indian yarn offers better quality and a more reliable supply. They warn that halting duty-free imports would increase production costs and weaken Bangladesh’s competitiveness in the global market.
