Bangladesh shuts yarn imports from India through land routes

The move follows a complaint by the Bangladesh Textile Mills Association, citing unfair competition from cheaper Indian yarn

The National Board of Revenue (NBR) has banned the import of yarn from India through the Benapole, Bhomra, Sonamasjid, Banglabandha and Burimari land ports.

The decision was announced in a revised notification issued on Tuesday, amending a previous order. The new rule takes immediate effect.

Under the retracted order issued on Aug 29, 2024, 100 percent of export-oriented industries with customs bond licences were allowed to import yarn via these land ports. Imports through land ports were still restricted for other businesses.

With the latest order, the NBR has now imposed a blanket ban on all yarn imports via the land ports.

Previously, yarn imports from India were only routed through these five land ports.

The move comes in response to demands from the Bangladesh Textile Mills Association (BTMA), which first sent a letter to the commerce ministry and then to the NBR.

A large portion of the yarn used in the country's garment sector comes from India, mostly through Benapole.

Yarn produced in northern and southern India is typically stored in Kolkata and transported to Bangladesh from there.

The price of yarn coming through Benapole port was less than the ones arriving via seaports.

The BTMA claimed that the domestic textile mills were suffering due to the low prices. As a result, local firms face huge losses.

The organisation also alleged that yarn importers were evading duties by bringing in quantities greater than the amount declared in their letters of credit (LCs).

A letter outlining the same grievances was also sent to the Bangladesh Trade and Tariff Commission.

In light of these circumstances, the ministry issued letters to all land ports noting that while the prices of yarn produced in China, Turkey, Uzbekistan and Bangladesh were almost the same, the cost of Indian yarn coming through land ports was much lower.

That is, the yarn imported through the land ports comes at a much lower price than the rate declared at the Chattogram Custom House, leaving the country's yarn manufacturing organisations struggling to remain competitive.