The Bangladesh Textile Mills Association (BTMA) has voiced strong opposition to a proposal in the national budget for the 2026-27 fiscal year that would remove the existing 30% value-addition requirement for importing raw materials under bank guarantee facilities.
Speaking at a press conference held at Gulshan Club in Dhaka on Friday, BTMA leaders argued that the proposed change could lead to greater misuse of bonded import facilities and create an uneven competitive environment for local manufacturers.
The association said, “the current value-addition requirement plays an important role in supporting domestic textile production and export competitiveness.”
According to BTMA, maintaining the condition will be particularly important as Bangladesh prepares for its graduation from Least Developed Country (LDC) status, a transition expected to bring new challenges for export-orientated industries.
BTMA President Showkat Aziz Russell said, “the country imported yarn worth around Tk26,000 crore during the 2024-25 fiscal year, despite having significant local production capacity.”
He warned that further easing import conditions could place additional pressure on domestic manufacturers already facing difficult market conditions.
He also noted that since 2019, approximately 234 textile factories have ceased operations. He added that many of the remaining mills are currently running at only 60% to 70% of their installed production capacity, reflecting weaker demand and increasing competitive pressures.
Industry leaders also used the briefing to press for a number of policy measures aimed at improving the sector’s competitiveness.
Among their key demands were a reduction in the corporate tax rate for textile manufacturers to 12%, the withdrawal of a proposed 5% duty on polyester staple fibre imports, and the full removal of tax deducted at source on export cash incentive payments.
The textile sector remains one of Bangladesh’s largest industrial employers and a key contributor to export earnings.
Industry representatives argue that supportive fiscal policies will be essential to strengthen local manufacturing capacity and help exporters remain competitive in international markets during the post-LDC transition period.
The government has yet to announce its final position on the proposals raised by the association, as discussions on the FY2026-27 budget continue.
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