BTMA Seeks Urgent Policy Reversal To Avert Textile Sector Crisis
Bangladesh’s primary textile industry is on the brink of a major disruption, warns the Bangladesh Textile Mills Association (BTMA), urging the government to roll back recent fiscal measures that threaten the survival of domestic spinning mills.
In letters sent to key policymakers including the finance and commerce advisers, Bangladesh Bank Governor, and NBR Chairman, BTMA President Showkat Aziz Russell called for immediate withdrawal of the 2% Advance Income Tax (AIT) on imported cotton and a reduction in corporate tax from 27% to 15%.
The association argued that the AIT, imposed without industry consultation, would severely hike production costs and erode competitiveness, particularly in the spinning segment. “This move will shrink working capital and could drive many mills to closure within three years,” said Russell.
BTMA also opposed the hike in specific tax on locally produced yarn from Tk 3.0 to Tk 5.0 per kg in the FY 2025–26 budget warning it will make local yarn costlier and discourage garment manufacturers from sourcing domestically.
Bangladesh is entirely reliant on imported cotton, yet its mills supply 100% of yarn for the knitwear sub-sector and 55–60% for woven garments. Despite facing fuel price hikes, dollar shortages, currency devaluation and declining export incentives, the sector continues to anchor the RMG value chain.
“These sudden policy changes jeopardise US$ 75 billion in investments and threaten the goal of US$ 100 billion in exports by 2030,” BTMA said, requesting an urgent meeting with policymakers to review the impact and ensure the sector’s sustainability.
