Published : 09 Sep 2026, 12:28 AM
Updated : 16 Sep 2026, 11:48 AM
The National Board of Revenue (NBR) has tightened duty-free yarn import rules for export-oriented garment factories, withdrawing bond facilities for 10–30 count cotton yarn.
Under the new rules, factories can still import the yarn against a bank guarantee.
The NBR issued an order on Tuesday, making the measure effective immediately.
The Bangladesh Textile Mills Association (BTMA) welcomed the move, while the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) strongly opposed it.
The order says yarn imported against a bank guarantee will be released only after export proceeds from products made with it are repatriated.
It also makes certification from any one of BGMEA, BKMEA or BTMA mandatory for import and release at customs stations.
The change means bonded export-oriented factories must now follow the process currently used by non-bonded factories when importing raw materials against bank guarantees.
Yarn in the 10–30 count range accounts for about 60 percent of Bangladesh’s total yarn imports. Imports were worth Tk 300 billion last year, raising concerns among garment exporters that bank guarantees will increase costs.
The initiative follows years of work by the commerce ministry, Tariff Commission and other stakeholders to protect local industry and prevent misuse of bond facilities.
A recommendation from the commerce ministry during the interim government was sent to the NBR but did not materialise.
The BNP government later formed an inter-ministerial committee, headed by the commerce minister.
At its first meeting on Aug 20, it decided to introduce the condition on a trial basis for yarn under HS codes 5205, 5206 and 5207.
The NBR order exempts consignments shipped before its issuance.
BGMEA, BKMEA Protest
The two groups say an “interested quarter” has forced local yarn purchases by withdrawing import benefits, calling it a “suicidal decision” that threatens the RMG sector.
In a joint letter to the commerce ministry on Monday, they demanded immediate withdrawal, saying it was introduced without prior consultation.
They said the change would “destroy” the garment industry, send the wrong signal to foreign buyers and seriously disrupt exports. Copies went to the commerce secretary and acting NBR chairman.
BTMA’s View
BTMA says around $7 billion in export earnings have reportedly not been repatriated, calling the situation “extremely concerning”.
“Once this measure is implemented, it will create a financial obligation to bring export earnings back home and reduce the risk of export proceeds not being repatriated.”
BTMA noted that a September 2025 notification allowed non-bonded exporters to import yarn and other raw materials against bank guarantees.
“Our association of direct exporters also welcomed this initiative,” it said.
“Currently, the same facility has been extended to bonded establishments. Therefore, there is no logical reason why this measure should obstruct yarn imports or exports.”
BTMA said the move would help protect the textile industry, create jobs, conserve foreign currency and bring discipline to the bond system.
Linking release to full repatriation of export earnings, it added, would make the initiative more effective and beneficial to national economic interests.
