The Bangladeshi government finds itself caught in a high-stakes tug-of-war between two pillars of its economy: local spinning mills and ready-made garment (RMG) exporters. Tensions reached a boiling point after the Commerce Ministry recommended that the National Board of Revenue (NBR) scrap duty-free import facilities for specific yarn counts. While local spinners have hailed the move as a long-overdue lifeline, apparel exporters warn that the policy could cripple the country’s global competitiveness at a time of intense price pressure.

At the heart of the dispute is yarn of 10 to 30 count—a medium-to-coarse thickness essential for the massive knitwear sector. The Bangladesh Textile Mills Association (BTMA) has long lobbied for protection, claiming that "dumping" practices by Indian traders have left local mills with nearly $1 billion in unsold stock. According to BTMA data, Indian yarn is being sold in Bangladesh at prices as low as $2.50 per kilogram, significantly cheaper than the $2.93 rate found within India itself. "At least 50 spinning mills have already shut down," the ministry noted in its letter, warning that growing dependence on imports threatens national foreign currency reserves.

However, for RMG exporters, the proposal feels like a threat to their survival. Leaders from the BGMEA and BKMEA argue that restricting imports will hand local spinners a monopoly, leading to immediate price hikes. Fazlee Shamim Ehsan, Executive President of the BKMEA, revealed that local mills have already begun quoting prices $0.25 to $0.30 higher per kilogram following the announcement. “It is not right to harm the export-oriented garment industry to salvage the spinning sector,” he argued, suggesting that targeted incentives for spinners would be a more balanced solution.

The conflict also carries significant long-term implications for Bangladesh’s graduation from Least Developed Country (LDC) status. Showkat Aziz Russell, President of the BTMA, pointed out that to qualify for duty-free access to the EU under GSP Plus after graduation, exporters must meet "two-stage transformation" rules—meaning they must use locally spun yarn. Currently, Bangladesh is the largest destination for Indian yarn exports, receiving 44 percent of India’s total output. Shifting this reliance toward domestic supply is seen by some as a necessary step for future trade compliance, despite the immediate cost.

As the NBR takes the ministry's recommendation under "active consideration," the garment sector has called for emergency meetings and press conferences to voice their alarm. The government now faces a delicate balancing act: protecting a $25 billion domestic spinning investment without undermining the RMG sector, which remains the lifeblood of Bangladesh’s export earnings in an increasingly price-sensitive global market.