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[🇧🇩] Textile & RMG Industry of Bangladesh
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Bangladesh’s apparel export to US rose to $7.34b in a decade: US Report

UNB
Published :
Jun 30, 2025 19:00
Updated :
Jun 30, 2025 19:01

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Bangladesh’s apparel export to the USA market increased to US$ 7.34 billion from $5.4 billion in a decade, according to the US Government Office of Textiles and Apparel (OTEXA).

The report revealed, apparel imports from Bangladesh to the USA in 2015 were valued at US $5.40 billion, rising to US $7.34 billion by 2024, reflecting a notable 35.94 percent growth over the same period.

While experiencing a positive trajectory until 2019, the emergence of COVID led to an 11.76 percent decline in 2020 ($5.92 billion was in 2019 and $5.22 billion was in 2020).

Since 2020, Bangladesh has shown impressive growth at 40.45 percent, surpassing the USA’s growth rate of 23.72 percent, according to the report.

The OTEXA stated that in 2015, apparel imports to the USA totalled US $85.16 billion, decreasing to US $79.26 billion by 2024, marking a 6.94 percent decline over the decade.

The trend was consistently positive until 2019, but with the onset of COVID, a significant 23.47 percent drop was observed in 2020 ($83.70 billion was in 2019 and $64.06 billion was in 2020).

Despite the USA showing signs of recovery post-COVID, the economic downturn was substantial, failing to meet the import of 2015 even in 2024.

During US recessions, consumer spending reductions notably impact clothing expenditures, reflecting broader economic shifts impacting the apparel market.

With the USA retail sector heavily reliant on imports (comprising 95 percent of the industry), challenges such as high tariffs (averaging 18.5 percent pre-Trump era), escalating freight costs, and short apparel market lifespans have hindered integration into supply chains.​
 

Reforms, diversification could supercharge RMG exports

FE REPORT
Published :
Jul 02, 2025 00:21
Updated :
Jul 02, 2025 00:21

Bangladesh's readymade garment (RMG) sector could be on the cusp of a transformative leap, with the potential to earn up to US$94 billion in annual export earnings by 2029, if the country expands into non-traditional markets and embraces manmade fibre (MMF) production.

This ambitious amount is expected to be achieved at an average annual growth rate of 15 per cent, which would require coordinated reforms across trade, industry, and finance, according to a new diagnostic report jointly released by the World Bank, IFC, and MIGA.

Beyond export earnings, the report outlines how strategic reforms and sectoral investments could create over 664,000 new formal jobs in the domestic paint and textile dye industry, and formalise hundreds of thousands more through the digitalisation of financial services.

Additionally, unlocking housing sector potential could draw US$2.0 billion in private investment into construction and allied industries, providing another major boost to employment and economic resilience, according to findings presented at a high-profile event on Tuesday.

The adoption of reforms in digital financial services (DFS) could create up to 460,000 new jobs, including the formalisation of around 360,000 informal positions, the report said.

The analysis was shared at a dissemination event for the 'Country Private Sector Diagnostic (CPSD) for Bangladesh' report, jointly conducted by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).

The event was held at a hotel in Dhaka, with stakeholders from the government and private sector in attendance.

Suhail Kassim, Senior Operations Officer at the World Bank, delivered the sectoral insights virtually.

IFC Country Manager Martin Holtmann, World Bank's new Country Director for Bangladesh and Bhutan Jean Pesme, senior private sector specialist Hosna Ferdous Sumi, and IFC operations officer Miah Rahmat Ali and operations analyst Noor Ahmed Naveed, among others, spoke at the event.

The CPSD identified four key sectors with high growth potential where targeted private investment could stimulate significant economic development are greening the RMG sector, housing for middle-income groups, domestic production of paint and textile dyes, and expansion of digital financial services (DFS).

The report also included an overview of the country's business climate, foreign direct investment (FDI) trends, cross-cutting challenges, and institutional bottlenecks that continue to hinder private sector development.

Electricity shortages topped the list of business obstacles, followed by limited access to finance, corruption, informality, and high tax rates.

Syed Nasim Manzur, President of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), said the most pressing concerns for investors today are policy inconsistency, regulatory overreach, and systemic corruption.

Speaking on the challenges facing the RMG sector, Mr Kassim noted high import duties on non-cotton raw materials such as MMF, a lack of regulation on fabric waste and groundwater use, and low levels of investment in modern technologies.

These, he said, are key constraints to achieving greener and more sustainable production.

He also stressed the need for labour law reforms to ensure continued access to the EU market following Bangladesh's graduation from Least Developed Country (LDC) status, in line with upcoming European green product standards such as the Ecodesign for Sustainable Products Regulation.

To remove market distortions, the report recommended ending the cash incentives for exports of PET (polyethylene terephthalate) bottles and flakes, aligning duties on solar inverters and panels to create a level playing field, and introducing water efficiency certification for RMG firms.

In the paint and dye sector, the CPSD highlighted inconsistent customs classifications on imported inputs and the high cost of inventory holding as major barriers to domestic production.

It recommended digitising customs procedures, revising bonded warehouse policies to permit third-party operations, and improving logistics to reduce trade costs.

For the housing sector, high urban development costs and cumbersome land registration and clearance processes were seen as key hurdles.

The report called for improving access to municipal services, digitalising land records, and expanding access to housing finance to attract long-term investment in affordable housing for the middle class.

In digital financial services, the CPSD suggested policy actions to promote wholesale transactions via mobile financial services and encourage the use of structured finance by removing taxes on assets moved between originators and financing vehicles.

These steps could deepen financial inclusion and make DFS a stronger engine for job creation. The report, while optimistic about Bangladesh's growth potential, underscores the need for regulatory clarity, digital transformation, and an inclusive investment climate to fully unlock the capacity of the private sector.​
 

‘Expansion into non-traditional markets, adoption of MMF to boost annual export by 15pc’
Says report prepared by World Bank, IFC, MIGA about Bangladesh


FE ONLINE REPORT
Published :
Jul 01, 2025 19:27
Updated :
Jul 01, 2025 19:30

Expansion into non-traditional markets and the adoption of MMF (manmade fibre) could lead to an average annual export growth of 15 per cent, potentially increasing the country’s readymade garment foreign currency earnings to US$94 billion by 2029.

Besides, expansion in domestic pain and dye production could lead to the creation of over 0.664 million formal jobs within the sector, while up to 0.46 million new jobs with formalising up to 0.36 million informal jobs could be possible if required reforms are made for digital financial services.

Reforms in regulatory, supply-side and demand-side constraints that are hampering private investments in housing could create investment potential of about US$2.0 billion in construction and allied industries.

The statistics were disclosed on Tuesday at a dissemination event on the ‘Bangladesh: Country Private Sector Diagnostic (CPSD) for Bangladesh’ report jointly by the World Bank, IFC and MIGA held in a city hotel.

Suhail Kassim, senior operations officer at the World Bank, shared the sectoral overview at the event virtually while

IFC country manager Martin Holtmann, World Bank’s new country division director for Bangladesh and Bhutan Jean Pesme and senior private sector specialist Hosna Ferdous Sumi and IFC operations officer Miah Rahmat Ali and operations analyst Noor Ahmed Naveed, among others, spoke there.

The CPSD contains a thorough analysis by the WBG, which pinpointed four specific sectors-- greening the Ready-Made Garments (RMG) sector, housing for the middle-income segment, paints and textile dyes and digital financial services that have high growth potential and where private investment can stimulate economic growth and development.

It also included an overview of the country context, including a discussion on Foreign Direct Investment (FDI) trends, business environment, cross-cutting constraints to private investment, and the strength of institutional underpinnings for private sector development.​
 

RMG, textile leaders urge gas policy reforms to boost output

FE REPORT
Published :
Jul 03, 2025 09:05
Updated :
Jul 03, 2025 09:05

Leaders from Bangladesh's leading ready-made garment (RMG) and textile industry associations have urged the government to exempt industrial and captive gas-run facilities from seeking re-approval from Titas Gas Transmission and Distribution Company Ltd during internal rearrangements-provided their hourly load, monthly load, and outlet pressure remain unchanged.

"Removing the requirement for prior approvals will help the industry adopt more energy-efficient and high-performance machinery. We believe this will significantly boost energy efficiency, enhance production, and contribute to valuable foreign exchange earnings," they added.

The leaders recently made this appeal in a joint letter to Muhammad Fouzul Kabir Khan, Adviser to the Ministry of Power, Energy and Mineral Resources.

The industry leaders warned that procedural delays and restrictions in the current gas connection approval process are hurting production and costing the country valuable export earnings.

The appeal-endorsed by Hossain Mehmood, President, Bangladesh Terry Towel & Linen Manufacturers & Exporters Association (BTTLMEA), Fazlee Shamim Ehsan, Executive President, Bangladesh Knitwear Manufacturers & Exporters Association (BGMEA), Anwar-ul-Alam Chowdhury (Parvez), President, Bangladesh Chamber of Industries (BCI), Taskeen Ahmed, President, Dhaka Chamber of Commerce & Industry (DCCI), Mahmud Hasan Khan, President, Bangladesh Garments Manufacturers & Exporters Association (BGMEA) and Showkat Aziz Russell, President, Bangladesh Textile Mills Association (BTMA)-highlights that RMG and textile mills are unable to operate at full capacity due to inadequate gas supply, resulting in up to 40 per cent lower production.

They stated that most factories are established with BIDA's approval and built with significant investment in infrastructure, imported machinery, and utilities, often backed by bank financing. But despite this, companies are unable to fully utilise their installations and meet export targets.

Industry leaders argued that frequent restructuring or machinery replacements are required to improve efficiency or respond to changing buyer demands. However, the current requirement to seek prior approval from gas distribution companies for any rearrangement-even within factory premises-causes unnecessary delays.

They proposed that gas distributors should not interfere in the internal setup of customer premises beyond the RMS (Regulating and Metering Station) room, provided that the approved load and pressure remain unchanged. Additionally, they requested the withdrawal of a previous directive requiring clearance from electricity distribution companies (e.g., Palli Bidyut) for new captive power connections above 10 MW, citing the national grid's unreliable supply.

Other key demands include allowing unused gas load from one industrial unit to be transferred to another under the same ownership and premises without reclassifying it as a new connection.

They also called for permitting load transfers across different premises owned by the same company and introducing a digital application system for gas connections and meter installations, with a fixed processing timeframe of 3-5 working days.

"Authorising regional gas offices to approve load rearrangements would avoid higher-level delays. Establishing an approved list of gas meter brands and models would also simplify procurement and reduce installation times," the letter read.

They further sought automatic approval of low-pressure regulators in areas with chronic pressure shortfalls.

The industry leaders argued that these reforms would enhance energy efficiency, enable the adoption of modern machinery, and allow uninterrupted production-contributing significantly to export growth and foreign exchange earnings.

The letter was also copied to the Adviser to the Ministry of Commerce for information and necessary action.​
 

COTTON IMPORTS: Textile millers for removal of 2pc AIT
Staff Correspondent 04 July, 2025, 22:57

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A file photo shows a worker overseeing a cotton processing machine at a factory in Habiganj. | New Age photo New Age merchandise

Textile millers of the country have urged the government to withdraw a 2 per cent advance income tax imposed on imported cotton recently.

They also requested the government to exempt specific tax of Tk 5 imposed on per kilogram of domestic production of cotton yarn, manmade fibre and mixed fibre in the budget of the 2025-26financial year, which was Tk 3 per kilogram.

Showkat Aziz Russel, president of the Bangladesh Textile Mills Association, made these requests in separate letters sent to advisers of the finance and commerce ministries, governor of the Bangladesh Bank and chairman of the National Board of Revenue on Thursday.Bangladesh-themed souvenirs

BTMA president Showkat Aziz Russell said that the newly imposed AIT and specific tax on yarn would severely disrupt domestic spinning mills and endanger the sector’s competitiveness.

Recently, the government issued an SRO imposing a 2 per cent AIT on imports of over 150 essentials and capital goods for industries.

The range of items facing 2 per cent AIT included machinery, spares and raw materials for various industries, like the ready-made garment and textiles.

The NBR issued a gazette notification last month, where some major items like cotton, wheat, flour, maize, rice, soya beans, sunflower seeds, mustard seeds, linseed, sugar, bulbs, tubers, jet fuels, kerosene, diesel, furnace oil, LPG, natural gas, petroleum bitumen, iron oxides and zinc sulphate faced a 2 per cent AIT.

Referring to the SRO, the BTMA president said that the decision was made without consulting industry stakeholders and was likely to be ‘self-defeating’ for the sector and the wider economy.

‘Although it may appear to aid revenue mobilisation, in reality, it would be suicidal. The imposition of this AIT would significantly increase production costs, placing our textile mills at a disadvantage compared with competitors in other countries and making it impossible for local textile mills to sustain their businesses under the burden of a 2 per cent AIT,’ he added.

He also said that this 2 per cent AIT on every consignment would effectively accumulate to 29 per cent annually, gradually squeezing the working capital of mills and that could deplete entirely within three years.

Meanwhile, to respond this governmental decision, the BTAM called a press conference scheduled on Saturday, that is today.

Showkat said that Bangladesh did not produce cotton and was entirely dependent on imports and the local mills had the capacity to supply 100 per cent of yarn for the knit sector and 55-60 per cent for woven apparel.Bangladesh-themed souvenirs

He also said that this was accomplished despite challenges like gas and electricity price hikes, dollar crisis, local currency devaluation, rising interest rates and declining export incentives.

‘Such policy decisions, made without consultation, put at risk the $75 billion investment in the textile and apparel sector and undermine the target of reaching $100 billion in export earnings by 2030,’ the BTMA said.

The association called on the government to support the domestic textile sector as a key partner in export growth, rather than weakening its competitiveness through abrupt fiscal measures.​
 

Home textile exports stage comeback
Saddam Hossain 05 July, 2025, 22:18

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The export of home textile products has witnessed a comeback in the financial year 2024-25 after consecutive negative growth of two FYs, mainly thanks to improved purchase order situation.

According to Export Promotion Bureau data, in FY25, the country earned $871.57 million, representing a narrow positive growth of 2.42 per cent from $851.01 million in FY24.

The home textile sector was regarded as a key emerging player in the country’s export basket.

As export earner, the sector touched the milestone of $1 billion for the first time in FY21 after the readymade garment, jute, and leather.

In that year, the sector earned $1.13 billion, and crossed the billion club for the next FYs too, bagging $1.62 billion in FY22 and $1.09 billion in FY23.

However, due to an abnormal hike in gas prices, supply interruptions, and the Ukraine-Russia war, the sector’s earnings began to fall since FY23.

Following two consecutive years of negative growth, the home textile industry experienced positive growth in FY25.

Since November 2024, export earnings from home textiles have bounced back, sustaining this growth throughout FY25. However, the sector again faced negative growth in June 2025, the last month of FY25.

According to the EPB data, in FY25, bed, kitchen, and toilet lines generated $409.71 million, tents earned $226 million, rags and scrap twine earned $97.96 million, and the remaining $138 million came from other segments of the home textiles industry.

Momtex Limited is one of the major exporters of home textile products, with 7,500 employees and a monthly production capacity of 6 million meters.

Shahjada Rubel, head of business at Momtex, told New Age that exports experienced positive growth, and the factories received a substantial number of purchase orders over the years.New Age merchandise

‘Due to a hike in duties in China, a number of Chinese companies shifted their production facilities in Bangladesh which impacted our exports’, he added.

However, he said, the government must focus on ensuring the uninterrupted supply of gas and energy, as well as price reductions, to sustain export growth.

Rashed Mosharraf, executive director (sales, marketing, and operations) of Zaber and Zubair Fashion Ltd, one of the country›s most prominent players in the home textile sector, told New Age that a significant number of irregular orders were cleared last year, which impacted the exports.

‘The sector did well despite the political transition, severe fuel and energy shortage, and country’s overall discipline situation,’ he added.

Meanwhile, he stated that the newly imposed 2 per cent advance income tax on cotton imports would severely impact the sector.

‘If the government could provide sufficient policy supports, uninterrupted gas and electricity supply, the sector could again able to earn $1 billion, otherwise we may lose our competitiveness to Pakistan,’ he added.

Industry insiders said that home textiles was one of Bangladesh’s first-line export sectors, with the ability to produce bulk products, which had also accelerated the country’s rise to global leadership.

The country’s home textile export basket includes bed linen, bed sheets, and other bedroom textiles, bath linen, carpets and rugs, blankets, kitchen linen, curtains, cushions, cushion covers, and quilt covers.​
 

Lotus silk: the fabric of the future
Bangladesh’s wetland wonder weaves a new path for sustainable fashion

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Imagine if the next global fashion sensation did not emerge from Paris or Milan but quietly bloomed in a lotus pond in the wetlands of Bangladesh.

It may sound unlikely, but Bangladesh has achieved something extraordinary -- it has produced a new kind of textile called lotus silk. Soft, glossy, and eco-friendly, the fabric is made from the stems of pink lotus flowers that grow in water.

In an era of climate urgency and demand for sustainable alternatives, Bangladesh's innovation -- a rare, biodegradable, and luxurious textile crafted from the pink lotus (Nelumbo nucifera) -- could mark a turning point.

To showcase its potential, a special six-yard-long scarf has already been produced from this lotus yarn. The scarf is currently kept at the office of the Bangladesh National Commission for Unesco in the capital, standing as a symbol of what Bangladesh's wetlands and homegrown ingenuity can offer the world.

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To demonstrate its potential, a six-yard scarf has already been made from lotus yarn.

Researchers and experts said for the first time, this special fabric is being made in the country and it could help Bangladesh emerge as a leader in smart and green fashion.

The breakthrough came through a research project titled "Study of Diversity and Conservation of Lotus from Bangladesh," initiated in 2021 by Bengal Plants Research and Development (BPRD), with funding from the Bangladesh National Commission for Unesco.

"This is not just a scientific innovation; it is a cultural renaissance in Bangladesh," said Sikdar Abul Kashem Shamsuddin, chairman of BPRD and lead researcher of the project. "For generations, the lotus has been part of our heritage. Now it is also a part of our sustainable future."


Rakhal Hari Sarker, a supernumerary professor at the Department of Botany at Dhaka University, is the consultant for the project titled "Diversity, Uses, and Conservation of Lotus."

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In Faridpur’s Ronkail village, women are being trained to extract lotus threads. PHOTO: COURTESY

He said the lotus petiole has an incredible natural fine filament that can be transformed into high-value fibre with minimal intervention. "It's organic, it's durable and, above all, it's ours," he said.

Researchers said the lotus flower has always been seen as a symbol of purity, but now it is offering something more -- a clean, green solution to one of the world's one of the most polluting industries: textiles.

Lotus fibre cloth may seem like a new idea to many, but people in countries like Thailand, Cambodia, Myanmar, and Vietnam have long made this soft and strong cloth. Buddhist monks in Cambodia and Myanmar wore lotus fibre clothes as a symbol of peace and purity.

The first lotus cloth was reportedly made in Myanmar by Daw Sa Oo. She picked a lotus flower from Inle Lake and noticed threads coming out of its stem, which gave her the idea to weave them into cloth. She later gifted the first lotus robe to a monk.

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Inside the stem are sticky threads that, once exposed to air, turn into fine filaments.

Now, lotus fabric has become a growing business that helps rural women earn money while protecting nature.

The transformation from flower to fabric is a careful and eco-friendly process. Lotus petioles (stems) are harvested from wetlands across Bangladesh without uprooting the plant, allowing it to regenerate quickly. Inside the stem are natural sticky threads that, when exposed to air, turn into fine filaments. These are gently hand-rolled, dried, and spun into thread using traditional spinning wheels, often made from bicycle parts.

No chemicals, no fossil fuels, and no pollutants are involved in the process. Even the leftover plant matter is reused as compost or cattle feed. Each metre of lotus silk requires thread from 40,000 stems. A full garment may need up to 120,000 stems. Extracting enough lotus silk for one scarf can take up to two months, and the final product can cost ten times as much as regular silk.

In the village of Ronkail in Faridpur, rural women are now being trained to extract lotus threads, providing income and dignity. "Women who never thought they would be part of a global luxury industry are now expert artisans," said Shamsuddin.

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Lotus stems are harvested from wetlands without uprooting the plant.

The process of making lotus silk requires meticulous handwork and craftsmanship rooted in Bangladesh's rich textile heritage. As demand grows, it could create sustainable jobs in wetland areas while preserving biodiversity by protecting lotus-filled wetlands from farming or industrial use.

Uttam Rajbangshi, a supervisor from Ronkail village, said that from July to December, lotus grows in wetlands, and during this time, 16 people, mostly women, make yarn from the stems while four others collect the lotus. The yarn is then sent to the Bangladesh Handloom Board, where it is processed to make cloth and other useful products.

Bangladesh's wetlands, like beels, haors, and rivers, are rich in plant and animal life, but they are under threat due to rapid urban growth. "Bangladesh's beels, haors, and rivers are not just water bodies -- they're biodiversity hubs," said Prof Sarker. "Lotus cultivation can actually help preserve these ecosystems while creating jobs."

The process of turning lotus stems into cloth is eco-friendly. It uses no water, fuel, or harmful chemicals, making it a zero-emission and chemical-free method, said researchers. Even the extra plant parts do not go to waste -- they can be used as natural fertiliser or food for cows, making it part of a circular economy where nothing is wasted.

"Each time we harvest, the plant regenerates stronger," said Prof Sarker. "This is a model of how industry and ecology can work in harmony."

Lotus silk is quickly becoming one of the most sought-after eco-friendly fabrics in the world. Fashion houses in Italy, like Loro Piana, have already introduced jackets made from lotus silk that cost over $5,000. In India, a company called Hero Fashion has created a special white shirt made from lotus fibre, which resists stains and is kind to nature.

In Cambodia, Samatoa Lotus Textiles, a women-led business that won a Unesco award, has turned lotus fibre into a top choice in global fashion. These examples show that Bangladesh could also become a leader in lotus silk if the right steps are taken.

Prof Rakhal Hari Sarker said, "We have the land, the workers, and now the knowledge. If we invest in better research, training, and natural dyeing techniques, we can take lotus silk to the world."

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Threads are gently hand-rolled, dried, and spun into thread using spinning wheels.

The price of lotus silk is high, ranging from $2,500 to $4,000 per kilogramme. But with many wetlands full of lotus and skilled hands ready to work, Bangladesh has what it takes to enter the global market. Still, more needs to be done. Bangladesh must build strong systems for research, green production methods, and international promotion to attract fashion brands looking for sustainable materials, said experts.

Researchers said lotus silk is made from a special natural material called cellulose found inside the stems, and the amount depends on the depth of the water. Prof Sarker said research can be carried out to improve the quality and quantity of cellulose in lotus petioles. Techniques of modern plant breeding, such as tissue culture and plant biotechnology, can be applied to increase fibre production.

The entire process used in muslin production has also been applied to lotus fibre. Officials from the Bangladesh Handloom Board and Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have underscored its high potential.

Ayub Ali, chief of planning and implementation at the Bangladesh Handloom Board, said, "The yarn obtained from lotus plants is extremely fine and strong -- arguably even better than silk. One of the biggest advantages is that you can extract thread from a lotus plant up to four times a month without harming it."

"You don't even need the flowers; the yarn can be extracted just from the petioles," he added. "This is a completely natural fibre and there is tremendous potential for it in Bangladesh."

Mahmud Hasan Khan, president of the BGMEA, said, "Bangladesh has an abundance of canals and wetlands, so this can be done without major investment. At present, all materials are imported from abroad. If we can source the raw materials locally, that would be fantastic."

He said Bangladesh holds strong potential to advance even further in the global ready-made garment sector.​
 

Spinners demand withdrawal of 2% AIT on cotton import within a week

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Textile millers have demanded the withdrawal of the 2 percent advance income tax (AIT) on cotton imports within a week, warning of possible factory closures otherwise.

Speaking at a press conference organised by the Bangladesh Textile Mills Association (BTMA) at the Gulshan Club in Dhaka today, they pointed out that the tax was imposed in the budget proposal without consultation with the millers.

"The government should not do business everywhere, as the income of the government will in fact fall if the sector cannot perform well. At the end of the day, the impact of this 2 percent AIT is massive in business," BTMA President Showkat Aziz Russell said on the occasion.

Hossain Mehmood, chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, warned that the 2 percent AIT will increase costs by an additional 7 to 8 percent in the business and push the profit margin further down.

Amal Podder, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), criticised the move, saying the government should have taken such a decision in consultation with industry leaders.

Restrictive policies hinder growth

The call for withdrawal of the AIT comes as the primary textile sector, with an investment value of $23 billion, is facing multifaceted challenges, including increasing reliance on yarn imports from India, low gas pressure, high bank interest rates, declining working capital due to the exchange rate, and the looming US tariffs.

Md Badsha Mia, managing director of Badsha Textiles Ltd, said the government reduced the incentive to only 1.2 percent from 25 percent, hiked the gas price to Tk 32 per unit from Tk 4 per unit, raised the bank interest rate to 15 percent from single digits, and fixed the source tax at 1 percent—for which the sector is now in trouble.

Millers also noted that they suffered huge losses due to a 36 percent devaluation of the taka against the US dollar over the last three years.

Just before the beginning of the Russia-Ukraine war in February 2022, the exchange rate between the taka and the dollar was Tk 85. But the rate gradually reached Tk 122 per US dollar, causing many millers, traders, and importers to lose a massive amount of working capital, and they are now suffering from a capital shortage.

While the Bangladesh government is moving towards more restrictive policies, the Indian government has been giving many incentives to the spinning, weaving, garment, and textile sectors, giving huge advantages to Indian millers in the competition, the millers also pointed out.

For instance, they said Indian millers can sell a kilogram of yarn at Tk 15 less than Bangladeshi millers due to the incentives introduced by the Indian government. This has led to local garment exporters showing interest in purchasing Indian-origin yarn to make garment items.

"When neighbouring countries have been giving a lot of incentives in the name of different developments for the sector, the Bangladesh government is reducing the incentive rate alarmingly, for which many units are about to be closed down," said BTMA Vice-president Md Saleudh Zaman Khan.

He alleged that such restrictive policies will end up destroying the Bangladeshi primary textile sector. "I am tired of talking about all these problems."

BTMA Director Razeeb Haider also echoed a similar sentiment. "Because of faulty policies, a massive amount of yarn comes from India now. The government should immediately reverse the decision to impose 2 percent AIT."

Another BTMA Director, Md Khorshed Alam, said that of the total $23 billion investment in the sector, $18 billion is the banking sector's money.

He called on the government to check the 18 percent pilferage of gas to increase supply to industrial units.

The millers, however, acknowledged that government intervention has recently increased gas supply to the industry.​
 

Textile mills push for withdrawal of AIT on cotton imports

FE REPORT
Published :
Jul 06, 2025 08:28
Updated :
Jul 06, 2025 08:28

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Leaders of the country's primary textile mills demanded immediate withdrawal of recently imposed 2.0 per cent advanced income tax (AIT) on cotton imports to avert factory closures.

They also urged the interim government to maintain the 15 per cent corporate tax until 2028 and exempt the specific tax of Tk 5 per kg at the production stage on cotton yarn, synthetic and other types of fibers.

Bangladesh Textile Mills Association (BTMA) leaders placed the demands at an emergency press conference held at Gulshan Club in the city on Saturday.

BTMA President Showkat Aziz Russell, who has both textile and fabric mills, said the additional costs will force him to import yarn from India instead of sourcing from his own mill.

"Textile industry is at risk and no mills can survive under such a policy," he said, urging the government to immediately reconsider and reverse the tax and VAT decisions.

"If not, the consequences will be irreparable," he warned, posing question as to whether the government is taking such policy to protect the interest of neighbouring country.

The new tax, coupled with additional VAT burdens, wage hikes and reduced export incentives, comes at a time when mills are passing through a critical time amid a severe gas and electricity crisis, BTMA vice president Saleudh Zaman said.

"If the government does not reverse this decision by Monday (July 07), it will backfire and cotton would remain stuck at Chattogram port," he warned.

The tax, applicable on the import of raw materials such as cotton and man-made fibres, is technically adjustable, he said, adding that in reality, there is no incident of getting back the money once it enters the government's account.

Factory will be closed down due to liquidity crisis, he said, alleging that such measures have taken to cripple the spinning mills.

Echoing the same concern, BTMA director Abdullah Al Mamun said, "Neighbouring countries are offering their industries incentives while Bangladesh is putting pressure on its industries."

He said about 90 per cent of mill owners are looking to sell their factories in the present scenario.

Hossain Mehmood, chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA), said 90 per cent of their members use local yarn and that the impacts of AIT and the rise in corporate tax would be severe.

He expressed doubts about whether cotton imports could be increased under the new US tariff regimes while the 2.0 percent AIT remains in place.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) vice president Amal Podder and Bangladesh Cotton Association adviser Mohammad Ayub also spoke.​
 

BTMA seeks Withdrawal of 2pc advance income tax
Staff Correspondent 08 July, 2025, 00:54

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Leaders of the Bangladesh Textile Mills Association on Monday at a meeting urged finance adviser Salehuddin Ahmed to withdraw 2 per cent advance income tax for the import of cotton.

Led by BTMA president Showkat Aziz Russel told the finance adviser that imposition of the tax by the National Board of Revenue in the current financial year of 2025–26 was not equitable.Bangladesh-themed souvenirs

The finance ministry was expected to review the decision in the 24 hours, said the BTMA president, while talking to reporters after the meeting at the secretariat.

The finance adviser did not make any comment about the meeting held on the 7th day of the new FY26.

NBR chairman Abdur Rahman Khan was present at the meeting.

Officials attending the meeting said that the businesses were asked to maintain the new rate as it was not imposed only for the import of cotton.

The NBR has imposed 2 per cent of advance income tax on imports of over 150 essentials and capital goods for industries, including wheat, flour, maize, rice, soya beans, sunflower seeds, mustard seeds, linseed, sugar, bulbs, tubers, jet fuels, kerosene, diesel, furnace oil, LPG, natural gas, petroleum bitumen, iron oxides and zinc sulphate.

During the meeting, the NBR chairman assured the BTMA leaders of meeting other demands linked to value added tax, said the officials.

The day’s meeting was arranged within 48 hours after the BTMA held a special press conference at the Gulshan Club on Saturday to press home their demands, including withdrawal of 2 per cent advance income tax on cotton import.

BTMA leaders also demanded exemption from a specific tax of Tk 5 imposed per kilogram of domestic production of cotton yarn. They also told the authorities to reconsider the corporate tax decisions.

The textile millers have already questioned whether the move was designed to protect the interests of neighbouring countries at the expense of Bangladesh’s textile industry.Bangladesh-themed souvenirs

The BTMA in its annual report for 2024said that investment in the primary textile sector was around $23 billion and the sector contributed around 13 per cent in the country’s Gross Domestic Product.

According to the annual report, around 100 per cent yarn demand for knit readymade garments and 55–60 per cent yarn demand for woven readymade garments are met by the country’s primary textile that employs around 1.6 million workers, 60 per cent of which are women.​
 

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