In a move that is likely to have far-reaching implications for the textile and garment sector, the Bangladesh government has officially stopped the import of yarn from India through land ports, a route that had long served as a vital supply line for small and medium-sized textile and garment manufacturers. The National Board of Revenue (NBR), in a fresh notification issued on Tuesday, announced the cancellation of the facility to import yarn through five key land ports-Benapole, Bhomra, Sonamasjid, Banglabandha, and Burimari. The notification, which amends a previous circular issued on August 27, 2023, took immediate effect.
According to the updated directive, import of yarn via sea ports and air remains unaffected, leaving manufacturers the option to procure Indian yarn through maritime routes or other means, though often at higher costs and longer lead times.
BTMA’s Long-standing Demand Fulfilled: The decision follows sustained lobbying by the Bangladesh Textile Mills Association (BTMA), which has, for months, urged the government to curb low-cost yarn imports through land routes that it claims have been undermining the domestic spinning industry. In February 2025, BTMA formally requested the government to restrict land-port yarn imports from India, citing the negative impact on local mills that are struggling to compete with cheaper imports. Acting on BTMA’s plea, the Bangladesh Trade and Tariff Commission (BTTC) under the Ministry of Commerce issued a recommendation in March, urging the NBR to halt land-based yarn imports in order to boost the consumption of locally produced yarn in the garment sector.
“The decision was made to protect the interests of domestic spinning mills, which are facing immense pressure due to unfair price competition from imported yarn,” a senior official at the Ministry of Commerce told [News Outlet] on condition of anonymity.
The Route and the Issue: Yarn imported from India-primarily from the northern and southern states-is warehoused in Kolkata before being sent to Bangladesh. Because of the proximity and logistical ease, yarn brought through land ports has been entering the country at comparatively lower prices, prompting many garment factories, especially smaller ones, to switch from local to imported yarn. BTMA alleges that this price advantage is distorting the market, leading to excessive reliance on Indian imports at the expense of Bangladesh’s robust domestic spinning industry, which invested billions of dollars over the past two decades to develop a competitive textile base.
“Local mills are being forced to sell yarn at unsustainably low prices or shut down operations,” said Mohammad Ali Khokon, president of BTMA. “We welcome the government’s decision-it will create a fairer environment for local producers.”
Domestic Yarn Mills Struggling:Bangladesh’s spinning mills, most of which are concentrated in Narsingdi, Narayanganj, Gazipur, and Savar, have a combined capacity to produce nearly 3 million tonnes of yarn annually. Yet, with the garment sector increasingly relying on cheaper Indian yarn, domestic mills report operating at just 50-60% capacity. “Imported yarn often bypasses strict regulatory scrutiny, and in some cases, enters the market without proper documentation,” said a BTMA official. “This has made it impossible for local mills, which bear high compliance and production costs, to compete.”
Industry insiders say the unchecked flow of yarn imports was especially harmful during times of low global demand, such as the post-pandemic recovery period and the recent economic downturn, when domestic mills were already grappling with rising fuel costs, load-shedding, and declining orders.
Mixed Reactions from Traders and Garment Makers: While the spinning industry is celebrating the policy shift, importers and traders-especially those operating near land ports-have expressed concern, warning of price hikes and supply chain disruptions in the short term. “Land ports like Benapole and Bhomra are the lifeline for many small garment factories in Jessore, Khulna, and Rangpur,” said Mizanur Rahman, a yarn importer based in Benapole. “Transporting yarn via sea from India will increase costs by at least 10-15% due to shipping fees, handling charges, and longer delivery times.” Garment makers who rely on imported yarn-especially for fast fashion or low-margin products-are now concerned about rising production costs. “We understand the need to support local industry,” said Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). “However, the decision should have been made with an adjustment period. A sudden stop could disrupt production schedules for many small exporters.”
Potential Supply Gaps and Price Volatility: Experts warn that unless domestic spinning mills ramp up production quickly and fill the supply gap left by Indian imports, the yarn market could face short-term shortages, pushing prices up and putting pressure on garment exporters at a time when global demand remains fragile. “Bangladesh is deeply integrated into global supply chains,” said Shahidullah Azim, Vice President of BGMEA. “Any disruption in raw material supply-whether due to logistics or policy-can have ripple effects on delivery commitments and competitiveness.” On the other hand, some analysts argue that the move could be strategically beneficial for Bangladesh in the long term.
“By encouraging local sourcing of yarn, the government is essentially promoting backward linkage development,” said Dr. Khondaker Golam Moazzem, Research Director at Centre for Policy Dialogue (CPD). “This could enhance the value addition in garments and reduce dependence on foreign raw materials.”
Looking Ahead: Opportunity or Bottleneck: Bangladesh’s textile industry has historically been dependent on imported raw materials, especially for synthetic and blended yarns not widely produced locally. While the recent policy change is aimed at protecting the cotton yarn sector, questions remain about diversity and scalability in domestic production. “Local mills need to be ready to supply both quality and quantity,” said Tapan Chowdhury, Managing Director of Square Textiles. “If we can meet demand, this could turn into an opportunity. If not, we risk losing orders to competing countries.”
There is also a logistical concern. Shifting the import burden from land to sea may strain port capacity, especially Chattogram Port, which already handles more than 90% of the country’s external trade. “To avoid bottlenecks, we need to streamline customs clearance and improve port infrastructure,” said a customs official in Chattogram.
Legal and Regulatory Observations: Under the Private Sector Import Policy Order, import routes and procedures are determined in consultation with stakeholders. However, policy reversals or restrictions-especially abrupt ones-can affect the predictability of doing business, some traders argue. “The NBR should have issued a transition plan or grace period for existing letters of credit (LCs),” said Aminul Haque, a customs broker. “Now many importers are facing uncertainty regarding LCs that were opened last week under the old system.”
Moreover, the policy has also raised concerns of trade imbalance with India, which remains one of Bangladesh’s top trading partners. India exported over $1.3 billion worth of textile-related goods to Bangladesh in FY2023, a large share of which was yarn.
A Balancing Act Ahead: The NBR’s decision to ban yarn imports via land ports marks a critical turning point in Bangladesh’s textile trade policy. While it reflects the government’s commitment to protecting local industries, it also underscores the delicate balance between safeguarding domestic production and maintaining export competitiveness.
In the coming weeks, all eyes will be on how the domestic yarn market responds, whether prices stabilize, and how garment exporters adapt to the new sourcing dynamics. The success of this policy will ultimately depend on how efficiently local mills can meet rising demand-in both volume and variety-without compromising on quality or lead time. As Bangladesh aims to move up the global apparel value chain, ensuring a resilient and locally anchored supply chain could prove to be a competitive advantage-if the transition is managed with foresight and fairness.
