Bangladesh’s textile millers have sought urgent government intervention, warning that the sector is on the brink of collapse after months of deteriorating business conditions, rising costs and intensifying import competition.
The Bangladesh Textile Mills Association (BTMA) said the industry, which was built over three decades as a critical backward linkage for the country’s export-oriented garment sector, is facing an acute crisis. More than US $ 23 billion has been invested in spinning, weaving and processing capacity, taking utilisation to over 100% for cotton-based knit yarn and around 80% for woven yarn. However, BTMA said conditions have worsened steadily over the past year, with the situation deteriorating sharply in the last three months.
According to the association, at least 58 spinning and dyeing mills have fully or partially shut down. Several operators have attempted to survive by leasing out facilities, but many of these units are now running only at limited capacity.
In response, industry representatives have initiated urgent discussions this month with the National Board of Revenue, as well as the finance and commerce ministries, seeking measures to stabilise the sector. BTMA president Showkat Aziz Russell has written to multiple government bodies outlining the scale of the crisis and calling for immediate policy support.
In a letter to the Ministry of Commerce, BTMA proposed a five-year special incentive of 10% on domestic yarn sales, compared with the current rate of 1.5%. The association also called for a requirement that at least 50% of yarn used for export-oriented production be sourced from domestic mills, along with the imposition of a temporary safeguard duty on imported cotton yarn.
The proposals were discussed this week in a meeting involving commerce ministry officials and mill owners. Industry sources said local mills are under pressure from the gradual withdrawal of government incentives, rising production costs and increased support provided by the Indian government to its yarn producers.
Mill owners also pointed to the sale of duty-free yarn and fabric, imported under bonded warehouse schemes, in the domestic market, as well as illicit imports, which they say have distorted competition and eroded demand for locally produced yarn. The situation has been exacerbated by a slowdown in global garment exports over the past four months, forcing many mills to sell below cost.
Bangladesh’s textile industry expanded rapidly from the 1990s, with investment accelerating after 2005 as policymakers focused on strengthening backward linkages to support the ready-made garment sector. While this strategy initially delivered strong results, industry representatives say current market conditions and policy shifts have undermined its sustainability.
BTMA estimates that around 2 million people are directly employed in the textile sector, which comprises more than 1,800 mills across spinning, weaving, dyeing, printing and finishing, including 527 yarn-producing units. The association had expected an additional US $ 3 billion in investment in 2022 and 2023, but industry sources said most of this has not materialised following the downturn that began in 2024.
BTMA said that under current conditions, new investment in the sector is unlikely without swift and targeted government support.
