Bangladesh’s readymade garment industry is facing mounting risks as yarn supply concerns, rising production costs, and policy uncertainty converge, raising fears of wider economic fallout.
Bangladesh Textile Mills Association (BTMA) has announced an indefinite shutdown of spinning mills from February 1, citing inadequate government support for domestic yarn producers. Industry stakeholders warn the move could trigger yarn shortages, disrupt garment production, and threaten exports.
At a press conference on January 22, BTMA President Shawkat Aziz Russell described the sector as being in a “state of emergency,” blaming heavy taxes and the continued bonded facility for imported yarn for undermining local spinning mills.
Exporters’ groups BGMEA and BKMEA cautioned that withdrawing bonded warehouse facilities for 10–30 count yarn imports could put up to $5 billion in exports at risk, especially as the sector already faces global slowdown, high interest rates, and energy constraints. They warned that higher input costs could erode competitiveness and divert orders to rival countries.
Bangladesh’s merchandise exports fell 2.19% in the first half of FY26, with December exports down 14.25%, while RMG—accounting for over 80% of total exports—showed minimal growth. Industry leaders are urging the government to act swiftly through coordinated dialogue, targeted incentives, and reliable energy supply, stressing that protecting spinning mills must not come at the cost of the RMG sector or the broader economy.
