Staff Reporter :
The Bangladesh Textile Mills Association (BTMA) has labeled the discrepancy in export figures as a “conspiracy,” arguing that inflated export growth data has negatively impacted textile entrepreneurs by reducing their benefits.
“Reducing cash incentives would severely jeopardize the industry and halt its progress, potentially leading to its demise like the jute industry in the future,” warned BTMA President Mohammad Ali Khokon during a press conference at his office in the capital.
The press conference aimed to underscore the potential harm that reducing cash incentives could inflict on the textile sector.
Khokon expressed concerns that the industry might eventually become dependent on foreign markets due to these issues.
“In a meeting with the Ministry of Commerce last year, when we pointed out that our exports do not match the data shown by the Export Promotion Bureau (EPB), we were scolded by the central bank governor and others. We, including the then-president of BGMEA, were silenced,” Khokon said.
“We have been deprived of many benefits, including incentives, export development funds, and tax-related facilities, due to false information about export growth, which was a kind of conspiracy,” he added.
Khokon highlighted several challenges facing the sector: “The price of gas has increased, and the gas crisis is more severe. The production cost per kg of yarn is $1.25.
If production is halved due to a gas shortage, the cost becomes $2.5. Also, the period available under the Export Development Fund (EDF) was 365 days, but it has been reduced.”
He continued, “Due to currency devaluation, working capital has reduced by 40 percent.
The interest rate has increased from 9 percent to 15.5 percent, a rise of about 48 percent. Workers’ wages have risen by 70 percent, and there are difficulties in opening letters of credit (LC) for importing raw materials.”
Khokon noted that these issues have caused the local industry to fall behind in competition, with yarn imports from neighboring India increasing by about 13 percent over the last year.
“The facilities provided in India are not available here. Consequently, some factories have already closed permanently, and several more may shut down by next December.
As a result, import dependence will increase, and eventually, the local market may be taken over by foreigners,” he warned.
“In such a situation, it is not prudent to reduce incentives without implementing alternative measures to protect the textile sector,” Khokon said.
He stressed that reducing cash assistance against exports puts the textile industry at serious risk. This sector, with its great potential, may disappear like the jute industry did.
Khokon also mentioned that the cash assistance reduction is linked to Bangladesh’s transition from least developed country (LDC) status in 2026.
“However, LDC graduation is still about two and a half years away. Even after LDC graduation, industries can receive cash incentives until 2029 as a grace period.
Despite India’s graduation from LDC status in 2004, the country still provides various policy supports and incentives to the textile sector as an alternative to cash assistance on a priority basis,” he added.
He called for a timely textile policy and a grace period for loan repayment to support the industry during this transition.