Bangladesh’s textile spinning sector, a critical pillar of the country’s export-driven economy, is facing an unprecedented crisis as imports of Indian yarn have surged by 137% over the last 22 months, triggering widespread mill closures, financial distress, and rising fears over the collapse of backward linkage for the apparel industry.

Speaking at a meeting held at the Gulshan Club in Dhaka today, Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell stated that a decision must be made within the next 72 hours. He warned that the sector has already entered a critical phase, describing its current condition as “ICU-level.” He urged the government to take decisive action within 72 hours to prevent irreversible damage.

Bangladesh becomes India’s largest yarn export market

According to BTMA, Bangladesh has now become the single largest export destination for Indian yarn, far surpassing all other importing countries. In contrast, Cambodia—the second-largest importer of Indian yarn—accounts for only 22%, highlighting the scale of Bangladesh’s growing dependence on Indian supplies.

BTMA leaders allege that Indian yarn is being dumped into the Bangladeshi market at prices up to 30 cents per kg lower than production cost, benefiting from extensive subsidies, cheaper cotton, lower energy tariffs, and policy support in India.

“This is not fair competition,” said BTMA President Shawkat Aziz Russell. “This is dumping, and it is systematically crippling our spinning mills.”

A sector built on strategic importance

Bangladesh’s spinning sector contributes around 13% to the national GDP and forms the backbone of the country’s textile and garment value chain. Combined with the RMG sector, textiles account for nearly 85% of Bangladesh’s export earnings, amounting to approximately USD 40 billion annually.

The sector has attracted investments of nearly USD 22–23 billion, creating hundreds of thousands of direct and indirect jobs. However, these investments are now under severe threat.

According to BTMA, 50 spinning mills have already shut down, each representing investments ranging between BDT 500–700 crore, putting nearly 200,000 jobs at risk.

“Restarting a spinning mill is not like restarting a small machine,” Russell said. “Once closed, heavy industrial units are extremely difficult to revive.”

Tax burden adds to the crisis

Khokon highlighted the sharp increase in tax burden as a major contributor to the crisis. According to him, the textile sector paid 12.5–15% tax in the previous fiscal year, but under the current budget, the effective tax rate has jumped to 27%.

“This is like striking an already collapsing sector with an axe,” he said, describing the move as “morar upor kharar ghaa.”

Under current market conditions, mill owners are reportedly selling yarn merely to cover workers’ wages and gas bills, leaving no room for sustainability.

“Many owners are being forced to shut down mills not because they want to, but because they have no other option,” Khokon added.

Energy, finance, and cost pressures

BTMA leaders also pointed to high bank interest rates, rising gas and electricity tariffs, and inconsistent energy supply as key structural barriers to competitiveness.

To address these challenges, Khokon and other leaders called for:

• Immediate reduction in bank lending rates for textile mills
• Rationalization of gas and electricity prices
• Creation of a separate textile financing window at Bangladesh Bank with concessional terms

“The spinning sector cannot survive on commercial interest rates,” Khokon said. “If Bangladesh Bank does not intervene with a sector-specific window, closures will accelerate.”

Backward linkage at risk

Industry leaders repeatedly warned that the collapse of the spinning sector would have far-reaching consequences for the readymade garment industry, which relies heavily on local yarn and fabric supply to meet tight lead times and compliance requirements.

“If we fail to protect BTMA member mills today, there will come a day when India may stop exporting cotton, yarn, or fabric to Bangladesh,” Khokon cautioned. “On that day, the backward linkage of our garment industry will collapse.”

Razeeb Haider Chowdhury, Director of BTMA, echoed the concern, noting that excessive reliance on imported yarn could also jeopardise Bangladesh’s eligibility for future GSP and trade preference facilities in major markets such as the US and EU, where local value addition is increasingly scrutinized.

72-hour ultimatum

BTMA President Shawkat Aziz Russell revealed that 50 mills have already shut down and warned that many more are on the brink. He expressed personal concern that he himself could become a “textile-less president,” noting that one of his own cotton mills has already closed.

Calling the situation “unprecedented,” Russell urged the government to take corrective action within 72 hours.

“If immediate decisions are not taken, the consequences will be irreversible,” he warned.

An economic emergency

Industry leaders emphasised that textiles and garments must be viewed as one integrated ecosystem—from cotton to yarn to fabric to apparel. Treating them as separate sectors, they argued, risks undermining Bangladesh’s entire export model.

With billions of dollars in investment, massive employment at stake, and growing external dependency, BTMA leaders insist that saving the spinning sector is no longer a policy option—it is an economic emergency that demands urgent, decisive action.