Bangladesh Halts Yarn Imported Via Land Ports in ‘Suicidal’ Move

The Bangladeshi government halted the import of yarns entering the country via land ports, throwing the nation’s apparel exporters up in arms.

The government’s decision follows requests from textile mill owners who suggested yarn should be imported only via seaports. The mills claim that the land ports lack the necessary infrastructure to vet raw materials and properly identify different categories of yarn.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Bangladeshi publication The Business Standard that the decision “will be suicidal for apparel exporters.”

The BKMEA and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), two of the leading lobbying groups supporting Bangladesh’s ready-made garment (RMG) industry, had requested that the imports continue through all ports.

But the Bangladesh Textile Mills Association (BTMA) has argued that bringing in the materials through land ports undermines local industry.

That industry has propped up Bangladesh’s export economy, with garments constituting 81 percent of the country’s total exports, according to the Bangladesh Export Promotion Bureau (EPB). Throughout 2024, Bangladesh’s RMG exports totaled $38.5 billion, a 7.2 percent increase from $ 35.9 billion in 2023 despite the nationwide unrest that resulted in mass factory closures and the ouster of former Prime Minister Sheikh Hasina.

On Thursday, the Bangladesh commerce ministry issued a notice directing the country’s National Board of Revenue to halt the yarn imports.

“In this situation, it is requested to take necessary measures by issuing a notification to stop the import of yarn through all land ports or by issuing a corresponding amendment to the existing statutory regulatory order (SRO),” the notice added.

The notice established that all types of yarn imported through land ports are significantly undervalued compared to the prices declared at the Chattogram Customs House. Domestic yarn manufacturing companies are unable to compete with the cheaper imports entering the country via land, adds the notice.

The average price of yarn produced in China, Turkey, Uzbekistan and Bangladesh is almost the same, but the price of yarn imported using land ports is much lower. This is causing irreparable damage to the domestic textile industry, the notice said.

The ministry said the notice was based on information provided by the BTMA, which also included stakeholders’ opinions.

Ahead of the notice, yarn imports from India were allowed through seaports and four land ports—Benapole, Sonamasjid, Bhomra and Banglabandha. These materials are often stocked in warehouses near the India-Bangladesh border in areas like Kolkata, before being shipped over.

Bangladesh is now heavily reliant on India for yarn imports, as roughly 95 percent come from the neighboring country. In total, Bangladesh imported 1.25 million metric tons of yarn in 2024—mainly cotton yarn—up 31.5 percent from 924,000 metric tons in 2023, the BTMA says.

India is suitable as a yarn source for multiple reasons, including the neighboring country’s competitive rates, its capacity to deliver larger consignments on time and local yarn mills struggling with inconsistent gas and power supply.

Former BGMEA senior vice president Abdullah Hil Rakib told The Business Standard that the government’s initiative would force apparel exporters to buy yarn from local markets instead, thus increasing costs for the industry and harming their competitiveness.

“We have to acknowledge that today’s small enterprises will one day grow into large companies—current industry leaders are proof of this,” Rakib said, warning that making SMBs depend solely on the domestic market could threaten their survival.

“It is not ethical to force apparel exporters into an economic model that limits their choices,” Rakib added. BKMEA’s Hatem backed this up in saying that fast-fashion apparel manufacturers would be negatively impacted as well since importing materials through seaports requires a longer lead time.

Hatem cited research data noting that the price of 30 single yarn in Bangladesh is $3.40 per kilogram, whereas it is $2.90 per kilogram in India and $2.96 per kilogram in Vietnam.

The BTMA had initially proposed a policy revision that allowed Bangladesh to keep importing yarn through the land ports.

Association president Showkat Aziz Russell changed his mind on the subject somewhere before the start of the year. In a letter to the government’s finance adviser Salehuddin Ahmed, Russel said that land ports often lack testing facilities for materials like yarn, enabling importers and exporters alike to take advantage of misdeclaration.

Russell warned that allowing continued yarn imports through land ports would cause irreparable damage to the country’s textile sector, increasing reliance on imported yarn and leading to higher import costs and unemployment.

“We have seen growth in apparel exports in the new fiscal year, yet local mills are struggling due to multiple challenges, including low orders,” Russell said.