Textile Mill Shutdown Sparks Fears Over Bangladesh’s RMG Exports, Livelihoods at Risk

New Delhi: The Bangladesh Textile Mills Association’s (BTMA) announcement of an indefinite shutdown of textile mills, coupled with an ongoing dispute over duty-free yarn imports between millers and garment exporters, has raised serious concerns over the future of Bangladesh’s readymade garments (RMG) exports ahead of the national election scheduled for February 12, according to a report.

The RMG sector contributes around 85 per cent of Bangladesh’s total export earnings. Industry experts warn that more than 10 lakh workers employed in the sector could face uncertainty over wages and benefits, potentially triggering labour unrest.

Reports suggest that the Bangladesh Ministry of Commerce’s move to impose duties on cotton yarn imports from India and other countries has once again destabilised the RMG sector. Economists caution that widespread shutdowns in the textile industry could further strain an economy already facing multiple challenges.

Commerce Secretary Mahbubur Rahman told Dhaka-based *The Business Standard* that the government is aware of the gravity of the situation and is examining possible solutions. “The textile industry is facing problems, no doubt. Something has to be done. We are thinking about what alternatives are possible,” he was quoted as saying.

Textile mill owners have threatened to shut factories from February 1, citing prolonged government inaction in safeguarding the $23-billion textile industry. The announcement comes at a politically sensitive time, less than two weeks before the national election.

BTMA President Showkat Aziz Russell said the shutdown was inevitable. “This is not a threat. The sector will shut down anyway. This is a crisis, a national crisis,” he said, criticising policymaking delays. “In any situation, India can take a decision within a few hours, whereas our government cannot do so even in months.”

Russell also pointed out that under the open costing method, any rise in production costs is eventually passed on to buyers. However, he warned that if domestic textile mills collapse, garment manufacturers would be forced to import yarn from India at higher prices in the long term, undermining competitiveness.

The report further noted that a halt in yarn production would disrupt the garments supply chain, while difficulties in servicing bank loans could push non-performing loans (NPLs) even higher at a time when banks are already under stress, with NPLs estimated at around 35 per cent.

--IANS