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Dhaka Tribune

Local textile mills face unfair competition from smuggled fabrics

Update : 14 May 2018, 12:09 PM

Local textile mills have been facing unfair price competition in the market by smuggled fabrics and by the continuous misuse of bonded ware facilities causing a deep crisis for them.

Bangladesh Textile Mills Association (BTMA) Vice-President Md Ali Khokon made the allegations while talking to reporters at BTMA headquarter in the capital on Saturday.

According to BTMA, Bangladesh has a capacity of producing 3,000 million meter woven fabrics annually which are further processed through in over 240 dyeing mills. There are also about 340,000 handlooms that can produce saris, lungis and other clothes. 

“However, ever since clothing fabrics have began to be imported illegally, and bonded warehouses are being misused, mills that produce fabrics for local consumption are struggling due to the loss in an unfair competitive environment,” said Khokon.

“Most of the times, fabric and other clothing products are imported illegally,” said Khokon. “Thus they can be sold at a far cheaper price than locally produced ones. As a result, local textile millers are suffering huge financial losses.”

Because millers are unable to compete, they are also left with a huge pile of unsold goods, which hampers production of new materials. The BTMA claimed fabrics and yarn worth Tk25,000 crore are stuck in inventories.

“Our mills are perfectly capable of producing fabrics for local markets, as well as foreign markets,” said the BTMA vice president. 

Primary data of BTMA show over 800,000 to 1 million pieces of clothing including sari, kameez, shirts and others are entering Bangladesh illegally through 17 border areas of Bangladesh annually. This is later brought into Dhaka through railways.

However, National Board of Revenue (NBR) data show no pieces of clothes and fabrics are imported commercially for local consumption. In reality, the market is saturated with imported clothing that are brought through the misuse of bonded warehouses and smuggling through the border.

“We are not against commercial import,” said BTMA Vice President Khokon. “If clothing or fabrics are imported legally, importers would need to pay tax and that would balance the price competition.”

He also urged the government to strengthen monitoring on the border areas to stop smuggling ahead of the Eid-ul-Fitr as sales go up during the days leading up to the festival.

Khokon also urged the NBR to ensure proper uses of bonded warehouse facilities so that local manufacturers can sell their fabrics to their optimum capacity. 

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