Spinning mill owners have warned of an indefinite nationwide shutdown of all spinning mills from February 1 if the interim government fails to implement the commerce ministry’s recommendation to withdraw the bonded warehouse facility for 10–30 count yarn imports within the next seven days.
The warning came at a press conference held at the Bangladesh Textile Mills Association (BTMA) office in Dhaka’s Karwan Bazar on Thursday, January 22, presided over by BTMA President Showkat Aziz Russell.
BTMA leaders said continued duty-free yarn imports under the bonded warehouse facility have severely undermined domestic spinning mills, pushing the sector towards a financial and operational crisis. They warned that the situation could escalate into broader industrial unrest and financial instability.
“The industry has reached a point where repayment of bank and financial institution loans will no longer be possible,” Russell said. “If this leads to distress in the banking sector, the responsibility will lie with the government.”
He added that the capital base of the spinning industry has eroded by nearly 50 per cent, leaving mills without any viable mechanism to service their debts. “Even selling all our assets will not be enough to repay outstanding loans,” he said, declaring that mill closures were now unavoidable.
Russell also alleged a lack of coordination among government agencies. “We have approached every relevant ministry, but responsibilities are being passed from one department to another, with no effective solution,” he said.
The warning follows a January 12 letter from the commerce ministry to the National Board of Revenue (NBR), recommending suspension of duty-free yarn imports under the bonded warehouse facility to protect local yarn producers. However, the recommendation has yet to be implemented.
The proposed policy change has triggered a standoff between textile millers and apparel exporters. Industry leaders cautioned that withdrawal of the facility could raise yarn import duties to around 37 per cent, increasing costs by $0.30 to $0.60 per kilogram and potentially affecting competitiveness in Bangladesh’s $28 billion knitwear export sector.
Top leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have separately urged the government to review the proposal, warning of higher production costs for exporters. Meetings with both the commerce adviser and finance adviser, however, have failed to produce a resolution.
BTMA leaders called for urgent government intervention, warning that prolonged inaction could destabilise the textile value chain, deepen banking sector exposure, and disrupt industrial employment across the country.