Bangladesh’s spinning sector is reeling from a wave of low-cost yarn imports from India that have triggered a sharp decline in local mill operations, according to the Bangladesh Textile Mills Association (BTMA).
The influx, driven by Indian exporters offering prices significantly below local production costs, has rendered domestic mills unable to compete, putting thousands of jobs at risk and eroding industrial capacity.
BTMA President Shawkat Aziz Russell warned that Bangladesh is facing a potential collapse of its spinning industry as Indian yarn imports surged 137 per cent in the last fiscal year.
He noted that Indian suppliers are undercutting local producers by nearly 30 cents per kilogramme, a move that has already forced nearly 50 mills to close, wiping out investments estimated between Tk500 crore and Tk700 crore.
“Restarting these mills is not just difficult, it’s almost impossible,” Russell said at a meeting hosted at Gulshan Club in Dhaka on Sunday.
“The sector is dangerously close to breaking point,” he added.
Russell also flagged growing overdependence on Indian raw materials, cautioning that such reliance leaves the country’s $22 billion textile and apparel industry exposed to external shocks.
“India has previously imposed sudden restrictions on cotton and yarn exports. If they do it again, the consequences for our garment industry will be devastating,” he said.
Local mills are reportedly sitting on unsold yarn inventories worth Tk10,000 crore, with a market value closer to Tk12,000 crore, as a direct result of being unable to match Indian prices.
Russell ruled out a total ban on imports but stressed the urgent need for policy interventions to address the widening trade imbalance.
“If this trend continues, backward linkage industries will be the first to fall, triggering a domino effect throughout the garment sector,” he said.
Russell criticised the interim administration’s handling of the crisis, citing the closure of more than 250 garment factories and 50 textile mills.
“Many units are now operating at half capacity or less. What progress has been made over the past year?” he questioned, calling the interim government’s performance a failure.
To stabilise the industry, the BTMA is calling for a 10 per cent cash incentive on both direct and deemed exports of yarn, expansion of the Export Development Fund with reduced interest rates, lower bank lending rates, and a loan repayment grace period.
Russell urged the government to act within 72 hours to avoid further closures, noting that his own cotton mill has already ceased operations.
Former BTMA president Mohammad Ali Khokon echoed the same, describing the textile industry as being “in the ICU.”
“Temporary measures won’t work anymore. What we need now is decisive and bold intervention,” he said.
Khokon also called for a dedicated low-interest financing facility from Bangladesh Bank and slammed the recent hike in corporate tax – from 12.5–15 per cent to 27 per cent – as a crushing blow.
“The revenue from yarn sales barely covers wages and utility bills. Mill owners have no choice but to shut down,” he said.
Both leaders warned that a collapse of the local spinning sector could eventually push India to halt its yarn and cotton exports to Bangladesh, leaving the country’s garment sector dangerously exposed.
Against this backdrop, they urged both the current and future administrations to prioritise the textile industry as a national economic pillar.
