Bangladesh’s readymade garment (RMG) industry has warned that restricting bonded imports of 10–30 count yarn could push the country’s largest export sector toward serious disruption at a time when it is already under intense pressure from falling global demand, rising costs, and domestic structural constraints.
Industry leaders argue that the proposed move—intended to protect local spinning mills—risks destabilizing the entire textile and apparel value chain, increasing production costs, delaying shipments, and eroding Bangladesh’s competitiveness in the global market.
A fragile industry under mounting strain
The RMG sector is currently navigating one of its most challenging phases in recent years.
Export orders have slowed due to the global economic downturn, while local manufacturers are grappling with high interest rates, energy shortages, currency volatility, and escalating operational expenses.
Against this backdrop, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) say any disruption to raw-material sourcing could have far-reaching consequences.
Both associations have formally urged the government to reconsider plans to withdraw bonded warehouse facilities for certain categories of imported yarn used in export-oriented production.
According to industry representatives, the bonded facility is not a privilege but a structural necessity for a sector that depends on uninterrupted, cost-effective access to raw materials to meet tight lead times imposed by international buyers.
Export risks and declining shipment trends
Export performance data underscores the sector’s vulnerability.
During the July–December period of the current FY26, garment exports declined by 2.63% compared to the same period last year.
The downturn was sharper in December alone, when shipments fell by 14.23% year-on-year.
Industry leaders warn that any increase in yarn costs or uncertainty in supply could further weaken export momentum.
Buyers, they say, are highly price-sensitive and increasingly willing to shift orders to competing countries if Bangladesh fails to offer stability in pricing and delivery schedules.
Higher yarn costs would directly translate into higher garment prices, reducing Bangladesh’s appeal in a fiercely competitive global market where marginal cost differences often determine sourcing decisions.
Spinning mills and garments: a shared fate
While the policy move is aimed at protecting domestic spinning mills, garment exporters argue that the interests of spinners and apparel manufacturers are deeply intertwined.
An estimated 85%–90% of locally produced yarn is consumed by export-oriented garment factories. Any contraction in garment production, therefore, would inevitably hurt spinning mills as well.
Industry leaders stress that weakening garment exports in the name of protecting spinners could prove counterproductive, shrinking demand for locally produced yarn and threatening jobs across the textile chain.
Garment manufacturers say they are willing to support local spinners by paying a reasonable premium over imported yarn prices.
However, they point out that domestic yarn currently costs $0.35–$0.60 more per kilogram than imported alternatives, while exporters say a premium of around $0.20 per kilogram is the maximum they can absorb without losing competitiveness.
Risk of shifting imports
Exporters also warn of unintended consequences if yarn imports are restricted. International buyers, they say, may respond by sourcing grey fabric from abroad rather than finished garments from Bangladesh, undermining local value addition.
Such a shift could particularly hurt small and medium-sized knitting and garment factories that lack the capacity to absorb higher input costs or adapt to sudden supply disruptions.
The associations caution that this scenario could accelerate factory closures and job losses, while strengthening competing supplier countries in the region.
Call for balanced policy decisions
BGMEA and BKMEA say they have communicated their concerns to the Ministry of Finance, urging policymakers to adopt a balanced and realistic approach that considers the survival of the entire export ecosystem rather than favouring one segment at the expense of another.
They argue that the RMG sector remains the backbone of Bangladesh’s export economy and a critical source of employment.
Any policy decision affecting raw-material access, they say, must be guided by economic realities on the ground, especially at a time when the industry is struggling to retain global market share.
The associations have called for dialogue with all stakeholders to ensure that policy measures support both spinning and garment manufacturers, warning that unilateral restrictions could do lasting damage to the country’s most vital export industry.