BTMA seeks 3-year export incentive extension amid textile stress

In a communication addressed to the finance secretary, Showkat Aziz Russell, president of BTMA said exporters are grappling with currency volatility, elevated raw material imports costs, and repeated disruptions to energy supply, all of which have weakened margins and reduced operational efficiency across mills, according to the media reports from Bangladesh.

BTMA highlighted that the primary textile industry represents around $23 billion in private investment and forms the backbone of Bangladesh’s apparel value chain, supplying roughly 70 per cent of raw materials to garment manufacturers. Together, textiles and apparel generate about 85 per cent of the country’s export receipts, with textiles alone accounting for nearly 30 per cent of foreign exchange earnings.

The incentive facility under Bangladesh Bank’s Foreign Exchange Circular No 28, which expires on December 31, 2025, has played a stabilising role for export-oriented producers, according to the association. BTMA argued that prolonging the scheme until December 2028 would help safeguard competitiveness at a time when global demand remains uneven and production expenses continue to rise.

The association pointed to a combination of international and domestic headwinds, including ongoing geopolitical conflicts, slower global economic growth, sharp increases in gas tariffs, and a 70 per cent rise in worker wages. Continued shortages of gas and electricity have also restricted factory utilisation, leading to mounting unsold yarn inventories and production curtailments in several mills.

Separately, the association has requested Bangladesh Bank to extend the import credit facility for industrial raw materials beyond its current expiry at the end of 2025. Existing foreign exchange circulars allow a maximum 180-day credit period, which BTMA said does not align with industry realities, added the media reports.

Textile producers explained that the process from importing cotton to receiving export payments typically spans 270 to 300 days, necessitating a longer financing window to maintain liquidity and avoid supply-chain disruption. BTMA warned that without policy relief on both export incentives and import credit, the sector’s ability to support garment exports could come under growing strain.

ALCHEMPro News Desk (SG)