Rising Yarn Imports Put Bangladesh’s Spinning Industry Under Pressure
DHAKA —
Imports of cotton yarn in the 10-to-30-count range have nearly doubled in two years, according to data from the Ministry of Commerce’s Automated System for Customs Data (ASYCUDA).
Shipments rose from 350.8 million kilograms in fiscal 2022-23 to 697.1 million kilograms in fiscal 2024-25. The value of those imports in 2024-25 was approximately Tk 267 billion.
Industry representatives say the surge has come at a time when many domestic spinning mills are operating well below capacity, raising concerns about the sustainability of Bangladesh’s textile supply chain and the viability of investments made in local production.
Imports surge as local capacity remains underused
Total yarn import payments reached nearly Tk 300 billion in fiscal 2025-26, according to industry and government data. Yarn in the 10-to-30-count range accounted for around 65% of those imports.
Government data also show a sharp increase in yarn imports under HS heading 5205 from a neighbouring country. Imports in that category rose from about 210 million kilograms in fiscal 2022-23 to approximately 531.2 million kilograms in fiscal 2024-25 — an increase of roughly 156% over two years.
The rapid growth has become a major concern for domestic yarn producers, who say cheaper imported yarn is taking market share while locally invested spinning capacity remains underutilised.
Bangladesh’s primary textile sector represents an estimated $32 billion in investment, according to industry representatives.
Government seeks tighter oversight, not a complete import ban
The government’s recent move to reconsider the existing bonded-facility arrangements for 10-to-30-count cotton yarn has been welcomed by domestic textile manufacturers.
However, officials say the measure is not intended to stop imports altogether.
According to the Bangladesh Trade and Tariff Commission (BTTC), the proposed policy would bring yarn imports under greater scrutiny through mechanisms such as bank guarantees, proof of exports and verifiable accounting records.
Exporters holding warehouse licences would still be able to import the required yarn under specified conditions against bank guarantees, even if the existing bonded benefits are withdrawn.
A Commerce Ministry source said the objective was to establish greater transparency between imports, domestic production and exports rather than impose an outright restriction on imported yarn.
The policy, however, has faced opposition from sections of the apparel industry. The Commerce Ministry suspended implementation of the decision on September 13 following differences between the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Textile Mills Association (BTMA).
BGMEA and BKMEA have raised objections to a proposal that would require export-oriented manufacturers to source at least 50% of their yarn from local spinning mills.
BTMA, which represents textile mill owners, has supported the government’s initiative.
Industry sees potential for jobs and lower import costs
Textile mill owners estimate that replacing a significant portion of imported yarn with locally produced supplies could reduce Bangladesh’s annual import bill by as much as $1.6 billion.
They argue, however, that import controls alone will not be sufficient. Domestic mills must also be able to produce yarn at competitive prices and meet the quality and delivery requirements of international buyers.
That would require a broader assessment of the sector, including the number of mills that are operational, partially operational or closed, as well as the investment needed to restore unused production capacity.
Following a recent meeting with the prime minister, BTMA President Shawkat Aziz Russell said the effective revival of closed and partially closed textile factories could create employment opportunities for around 1.5 million people.
Former BTMA director Rajib Haider said the employment impact would extend well beyond factory workers.
He said the benefits could spread across the wider supply chain, including cotton sourcing and transportation, warehousing, packaging, engineering and maintenance, utilities, banking, insurance, knitting, weaving and dyeing.
Dispute over bonded yarn and wastage
Domestic textile producers have also raised concerns about the misuse of duty-free bonded imports.
Some mill owners allege that a section of garment manufacturers may import yarn duty-free under bonded facilities and subsequently divert part of it to the domestic market rather than using it exclusively for export production.
They have also questioned the reported increase in allowable yarn wastage rates in the knitwear sector.
According to industry representatives, yarn-to-fabric wastage in knit fabrics is estimated at around 9-10% in India and about 8% in China, compared with roughly 12% previously cited for Bangladesh.
They claim the rate has subsequently risen to around 32-33% and that some stakeholders are now seeking a further increase to 40%.
Textile mill owners argue that excessive wastage allowances could create opportunities for bonded yarn to enter the domestic market and undermine locally produced yarn.
These claims have not been independently established and remain part of an ongoing industry dispute.
Balancing imports with domestic competitiveness
Badsha Mia, founder of Badsha Group of Industries, said the recommendation to remove 10-to-30-count yarn from existing bonded benefits was intended to protect local spinning mills from what he described as unfair competition.
He said the larger issue was finding an appropriate balance between access to imported raw materials and the productive capacity of domestic manufacturers.
Without such a balance, he said, long-term investment in the textile sector could become increasingly difficult to sustain.
Chowdhury Mohammad Hanif, director of Salma Group and a BTMA director, said local mills had been operating below capacity for an extended period because of competition from cheaper imported products.
When domestic production lines remain idle because of imports, he said, the impact extends beyond individual spinning mills and weakens the broader backward-linkage industry.
Hanif said protecting the sector’s existing investment was important, but cautioned that import controls alone would not guarantee long-term competitiveness.
Domestic producers would also need to improve production costs, product quality, technology and workforce skills to compete effectively in international markets.
A broader industrial challenge
The debate over yarn imports reflects a wider challenge for Bangladesh’s textile and apparel industry: how to maintain access to competitively priced raw materials for exporters while ensuring that billions of dollars invested in domestic production are not left underused.
For Bangladesh, a stronger local spinning sector could reduce import dependence, retain more value within the domestic supply chain and potentially lower the country’s overall textile import bill.
But industry experts say the transition will require more than restrictions on imports. Local producers will need to demonstrate that they can supply yarn at competitive prices, maintain consistent quality and meet the increasingly demanding requirements of global apparel buyers.
The outcome of the government’s policy review could therefore have implications not only for yarn traders and spinning mills, but for the broader textile and garment supply chain that remains central to Bangladesh’s export economy.
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