Written by The Banking Post
The government will hold another round of talks with key industry stakeholders on February 3 to resolve the deadlock over excluding certain yarn categories from the bonded warehouse facility.
The meeting, scheduled at the Ministry of Finance, comes after textile millers and apparel exporters failed to reach a consensus at an emergency discussion on Tuesday. Senior officials from the finance and commerce ministries, along with representatives of the National Board of Revenue (NBR) and trade bodies, are expected to attend.
The dispute centres on a commerce ministry directive to the NBR to suspend duty-free import benefits for specific yarn counts under the bonded warehouse scheme. The move has triggered sharp differences between local spinners and export-oriented garment manufacturers.
At the emergency meeting, apparel exporters warned that restricting bond benefits would mainly affect yarn used in export production, raising costs and eroding Bangladesh’s competitiveness. They cautioned that higher production costs could push international buyers to shift orders to rival sourcing destinations.
Textile millers, however, backed the proposed restriction, arguing it aligns with recommendations from the tariff commission and would protect domestic spinning mills. They called for a balanced policy that safeguards both local industry and export competitiveness.
Millers also urged the government to increase cash incentives for locally produced yarn to help offset cost disadvantages against imports, pointing out that competing countries provide similar support to their producers. Exporters echoed the call, saying any decision on enhanced incentives should consider the total fiscal cost and financing implications.
The government had earlier reduced cash incentives in two phases, citing concerns over fiscal sustainability and the need to phase out such support following Bangladesh’s graduation from the least developed country category.
With positions still far apart, the upcoming meeting is seen as crucial in shaping a compromise that protects domestic industry while maintaining the global competitiveness of the country’s apparel exports.
