The government has decided to impose a ban on yarn imports through land ports, citing concerns over under-invoicing, which is severely affecting the domestic textile industry.

The Commerce Ministry has instructed the National Board of Revenue to take regulatory action to halt such imports, emphasising the significant impact of under-invoicing on the sector.

In an official directive issued on Thursday, the Commerce Ministry instructed the National Board of Revenue (NBR) to either issue a notification restricting yarn imports through land ports or amend the existing Statutory Regulatory Order to ensure fair competition within the domestic market.

Apparel makers have voiced strong dissatisfaction with the government’s decision to halt yarn imports through land ports, saying that it would force apparel exporters to source yarn from the local market.

They argued that this move would drive up production costs and diminish competitiveness, with small and medium-sized enterprises particularly at risk of struggling for survival.

The directive highlighted findings based on data from the Bangladesh Textile Mills Association, feedback from stakeholders and relevant investigations, revealing that the declared value of yarn imported through land ports was significantly lower than the prices set at Chattogram Customs House.

This discrepancy in pricing has posed significant challenges for local yarn manufacturers, making it increasingly difficult for them to maintain competitiveness.

While the average price of yarn produced in China, Turkey, Uzbekistan and Bangladesh remains similar, the cost of yarn imported via land ports is notably lower, further undermining the position of domestic producers.

Moreover, Indian yarn, stocked at Kolkata warehouses before swift shipment to Bangladesh, is entering the market at dumping prices, which has led to an increased preference for imported yarn over locally produced alternatives, placing the domestic textile sector at substantial risk.

In light of this situation, the commerce ministry has formally instructed the NBR to take necessary steps to halt yarn imports through land ports by issuing a new notification or making relevant amendments to existing regulations.

Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem expressed shock over the commerce ministry’s decision.

He said that they met with the ministries just a few days ago; however, a notification just after that meeting is disappointing. He added that this decision would be suicidal for the apparel exporters.

The BTMA had previously alleged that customs officials were considering businesses importing multiple truckloads of goods under a single-truck letter of credit and bringing in higher-count yarn under LCs for lower-count yarn, he explained.

‘Now the government is going to halt the yarn import through land ports, meaning the customs officials are accepting responsibility for their failure which the BTMA alleged them of doing for a long time,’ he added.

Bangladesh Garment Manufacturers and Exporters Association former senior vice-president Abdullah Hil Rakib said that the government’s decision to halt yarn imports through land ports would force apparel manufacturers to buy yarn from the local market.

‘It will increase manufacturing costs and also impact their competitiveness. Most of the big players of the sector once were small and medium-level manufacturers, they grew gradually and came at their current position,’ he added.

He also said that this decision would make small and medium-sized enterprises dependent solely on the domestic market, which would threaten their survival.

According to textile millers, cotton yarn imports surged by over 39 per cent in 2024 estimated at $2.28 billion. Moreover, fabric imports by knitwear factories hiked by 38 per cent, worth $2.59 billion.

The BTMA claimed that the industry could supply nearly 100 per cent of the demand for export-oriented knit garments.

Recently, the BTMA requested finance adviser Salehuddin Ahmed, through a letter, to halt the yarn import through land ports.