The Bangladesh’s textile sector has expressed gloom and apprehension over a proposal to hike import duty on polyester staple fiber (PSF) to 5% from 1% in the fiscal 2026 budget.
The proposed import duty hike is to support domestic PSF producers from imports. But according to textile mills, Bangladeshi PSF manufacturing meets only 10-15% of demand.
Stakeholders also claim that the domestically produced PSF is priced higher than imported fibre and that the duty hike will enhance costs and reduce competitiveness.
So, while manmade fibre (MMF) accounts for around 70% of worldwide clothing consumption, MMF apparel accounts for just around 25% of the country’s overall revenues from exporting garments.
Industry insiders, however, said the proposal comes at a time when Bangladesh is gradually increasing its focus on MMF-based production to align with changing global apparel demand.
They noted that with garment exports facing pressure from weaker global demand and intensifying competition, expanding MMF production has become essential for sustaining export growth and competitiveness.
It would also discourage MMF-based garment exports and could prompt manufacturers to revert to cotton-based production.
In its reaction to the budget, the Bangladesh Garment Manufacturers & Exporters Association (BGMEA) urged the government not to impose the proposed 5.0% duty, citing the strong export potential of MMF garments.
Stakeholders also observed that Bangladesh has considerable room for expansion in MMF or blended fabrics garments, where its global market share stands at only 5-6% as against a massive 36% of China.
Image courtesy: Freepik
