BTMA Seeks Prime Minister's Intervention to Save the Spinning Industry, Demands Bond Facility Withdrawal Decision Be Upheld
The Bangladesh Textile Mills Association (BTMA) has sought the Prime Minister's intervention to protect the domestic spinning industry. The organisation made this call alongside protecting the industry's investment, production capacity and employment, and maintaining the competitiveness of the export-oriented readymade garment industry.
In a statement on Sunday (18 October), the BTMA presented its demands. The main demand is to uphold the decision to withdraw the existing bond facility on imports of 10-30 English count cotton yarn. The organisation also demanded the continuation of the import system against bank guarantees and the reinstatement of the local value addition condition.
The BTMA said there is about 32 billion dollars of investment in the country's primary textile sector, especially the spinning industry. The production infrastructure and scope of employment in this sector are also extensive, so a crisis in the industry directly affects a huge number of workers and entrepreneurs.
According to the organisation, if the industry's production and financial capacity can be restored, it will be possible to restart closed and partially closed spinning and weaving mills. This will protect existing employment and create new employment, and also create the opportunity to increase loan recovery by banks and financial institutions.
The BTMA does not view the decision to withdraw the bond facility on imports of 10-30 English count cotton yarn as a new duty imposition or an import ban. According to the organisation, under the National Board of Revenue's order, there is an opportunity to import such yarn against bank guarantees equal to the applicable duties and taxes.
The organisation also believes there is less risk of additional pressure on working capital under this system. In other words, it is possible to protect the domestic industry through a guarantee-based system without stopping imports - this is the core of the BTMA's argument.
According to the BTMA, if the bank-guarantee-based import system remains in place, it will be possible to prevent misuse of the facility, protect government revenue and ensure fair competition between domestic and foreign yarn.
The organisation has proposed encashment of the guarantee in accordance with the rules if proof of use of the imported yarn in approved work is not submitted within the stipulated time. On the other hand, it has also spoken of releasing the guarantee after verification of exports and repatriation of earnings. The BTMA has also emphasised ensuring transparency through digital surveillance and risk-based audits, while keeping legitimate export activities running.
The BTMA has demanded reinstatement of the 30 percent local value addition condition for raw material imports by non-bonded industries against bank guarantees. Alongside, as preparation for the period after Bangladesh's graduation from the list of least developed countries (LDCs), the organisation has proposed creating a policy framework suitable for gradually raising local value addition to 40 to 60 percent.
In this regard, it has called for taking into account World Trade Organization (WTO) provisions, rules of origin and, where applicable, conditions relating to two-stage transformation. According to the BTMA, such a policy will help increase the capacity of the domestic industry and local value addition, as well as prepare for international competition after LDC graduation.
The organisation has said that both goals - protection of the domestic spinning industry's investment, and supply of raw materials at competitive prices for the export-oriented readymade garment industry - can be achieved through a coordinated policy.
The BTMA has called upon the Prime Minister to review the proposals and give necessary directives, considering industrialisation, employment, revenue protection and export capacity. It now remains to be seen what decision the government takes on these demands.
