Bangladesh has pulled the plug on the zero-tariff arrangement that had allowed 10–30 count cotton yarn to enter the country duty-free through bonded warehouses, in a move designed to shield homegrown spinning and textile operators from cheaper overseas competition.
Under the revised arrangement, clothing manufacturers wishing to bring in yarn within this count range will need to do so against a bank guarantee, rather than benefiting from the previous duty exemption.
Domestic spinning mills have broadly welcomed the change, arguing it will bolster the local sector and curb the diversion of duty-free bonded yarn into unofficial domestic trade channels.
Apparel exporters, meanwhile, have pushed back hard, cautioning that the resulting rise in input costs could erode Bangladesh’s standing in international garment markets.
Sector figures indicate that the 10–30 count bracket accounts for roughly 80% of the country’s total yearly yarn usage, with the bulk of that demand tied to knitwear fabric manufacturing.
Domestic spinners, for their part, are said to be capable of meeting more than 90% of the yarn needs of export-focused knitters.
Spinning mill operators have for some time voiced frustration that yarn brought in from abroad, together with volumes entering informally via neighbouring markets, has eroded the strength of the domestic textile base.
Millers note that the value of fabric supplied by local spinners to the domestic market stood at roughly $13 billion four to five years back, a figure that has since fallen to approximately $9 billion.
Over the same period, an estimated $4 billion worth of bonded-facility fabric imports have found their way into local retail.
The Bangladesh Textile Mills Association (BTMA) issued a statement suggesting the policy shift would allow domestic mills to make fuller use of their production capacity as reliance on locally spun yarn grows.
The body added that the change could spur fresh investment, ease loan-servicing pressures on mills, and conserve foreign exchange reserves.
The association further noted that expanded use of domestically produced yarn would help lift the value-addition ratio to somewhere near 60% once the country exits Least Developed Country (LDC) status, while also giving garment exporters the advantage of shorter turnaround times.
BTMA chief Showkat Aziz Russell has previously noted that yarn imports arriving from India via Chattogram port roughly doubled during fiscal 2026, climbing to around Taka 30,000 crore from Taka 14,000 crore in the previous fiscal.
Clothing exporters, by contrast, have voiced significant unease about the new rules.
Representatives of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) alongside the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) submitted a letter to the Commerce Minister calling for the ruling to be reconsidered.
They further recommended a tripartite gathering of the three industry bodies to work towards a shared position on the matter.
Exporter representatives pointed out that the policy had not featured in discussions at the inaugural coordination session for the textile and clothing sector, convened on August 20 as part of a broader government push to tackle sector-wide difficulties.
They cautioned that scrapping the bonded facility for yarn imports risked driving up manufacturing costs for export-oriented clothing producers and diminishing their footing in overseas markets.
Mohammad Abdur Razzaque, who chairs the Research and Policy Integration for Development (RAPID) think tank, said the knock-on effects for garment exporters warrant close scrutiny.
He proposed that the ruling should stop short of becoming permanent, suggesting instead a periodic review mechanism to gauge its effects on both the spinning and apparel industries.
