The Bangladesh Textile Mills Association (BTMA) recently requested the government to stop import of yarn from India through land ports as the domestic yarn sector is struggling to survive due to smuggling through these routes.
Imports from India may continue through seaports, as they are equipped with adequate testing facilities and there is little scope of yarn being smuggled, BTMA president Showkat Aziz Russell told a press conference. But the land ports are ill-equipped to curb smuggling, he noted.
Yarn imports from India are allowed through seaports and four land ports: Benapole, Sonamasjid, Bhomra and Banglabandha.
Though the import of yarn through these ports was allowed in January 2023 to meet the sudden rise in demand after the pandemic, the huge volume of imports turned a threat to the domestic spinning sector, domestic media outlets reported.
India accounted for over 95 per cent of those imports due to the price factor.
For instance, traders open letters of credit (LCs) to import two tonnes of yarn, but eventually import 10 tonnes through five trucks, capitalising on the weak oversight at land ports, the BTMA president said.
In addition to this, challenges such as a loss of working capital due to the depreciation of the local currency against the US dollar, inadequate gas supplies, and lower investment inflow due to political uncertainty have plunged the domestic yarn sector into crisis.
When millers had made a similar request in the past, former finance minister M Saifur Rahman had stopped the import of yarn through land ports. But this government has not responded to such a request, he observed.
Many yarn mills are running at half their capacity, while some have fully closed due to the gas and US dollar crisis, he said, adding that as imports of yarn from India continue to grow over the next three to four months, Bangladesh stands to lose more jobs and value addition.
Russell also demanded that the government include representatives from BTMA, the Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association on the board of directors of the state-owned gas transmission and distribution company Titas and Bangladesh Petroleum Corporation.
This would ensure that unwanted decisions by the government do not affect the country’s economic lifeline, i.e., the textile and garment sectors, he added.