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Local millers losing competitiveness due to illegal imported yarns and fabrics

The local market in Bangladesh has been submerged with illegally imported yarn and fabric, hitting the local primary textile industry hard and Bangladesh government is losing huge tax, textile and apparel industry people alleged.

illegal imported yarns and fabrics
Figure: A huge quantity of sarees, three-pieces and other clothing from India, China and Pakistan are flooding the local market.

“Textile mills, especially those producing fabrics for the local market, are struggling to survive as they are losing competitiveness due to illegal import of a large quantity of clothing fabrics,” Mohammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA) also added.

Due to this illegally imported yarn and fabric, a huge amount of locally produced fabrics remain unsold. Local items worth Tk 200 billion to Tk 250 billion have remained unsold since January 2018.

Since fabrics and other clothing are being imported illegally without any duty, they are cheaper than local items. Textile and apparel experts expressed concern over foreign yarn and fabric are entering the country through smuggling, border hats and misuse of bonded warehouse facility, thus threatening the existence of local producers.

Textile mills, especially those producing fabrics for the local market, are struggling to survive as they are losing competitiveness due to illegal import of a large quantity of clothing fabrics.

Mohammad Ali Khokon, BTMA

Though the volume of commercial imports of fabrics is measly because of high import duty, a huge quantity of sarees, three-pieces and other clothing from India, China and Pakistan are flooding the local market, Mohammad Ali Khokon informed.

In past, the law enforcement agencies used to conduct raids in prominent wholesale clothing markets to seize illegally imported sarees and other fabrics but it has stopped for the last five years.

Mohammad Ali Khokon also informed that the BTMA has received such complaints from some 315 mills, including 15 big mills.

Also due to higher bank interest rate, high energy prices and other operational costs many textile mills for years have been unable to give dividends. And many old factories, which used to ensure supplies to the local market, were closed mainly due to financial problems.

The Bangladesh government should supply energy and industrial land at a reasonable price so that the spinners and weavers feel motivated to invest in the spinning sector, said Mohammad Ali Khokon.

Mohammad Ali Khokon requested and said that the government should fix the prices of LNG at an affordable level so that the textile and apparel industry can operate at ease.

“Recently the government has proposed to increase the LNG price to more than Tk 14 per unit, but the factory owners have urged that the government fix a lower price. The local textile millers yet to take the connections of LNG due to the higher prices fixed by the government,” Khokon said.

On the other hand, the demand of locally made fabrics has been rising both in the domestic and international arena. Bangladeshi apparel producers use 12 billion meters of fabrics yearly for making the export-oriented garment items. Local weavers can supply 3 billion meters of fabrics, and the rest imported from India and China.

Every year the garment manufacturers have been spending billions of US dollars as the domestic textile millers cannot meet all the demand.

“Bangladesh has the opening for fresh investment in woven fabrics production,” said Mohammad Ali Khokon.

“We are lobbying with the government to lower the LNG prices so that the factory owners can easily get connections.”

“In the Bangladesh primary textile sector, there is a scope to invest Tk 500 billion over the next five years.”

Mohammad Ali Khokon welcomed foreign investment in the primary textile sector with a condition of prioritizing the facilities for local investors.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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