No consensus in Bangladesh on proposed safeguard duty on yarn imports

At a meeting organised at the BTTC office in Dhaka recently, representatives from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) opposed the extra duty proposal by local spinners, saying it would raise production costs and hurt the global competitiveness of local garment items.

Three alternatives were discussed: imposing a 20-per cent safeguard duty on yarn imports, providing a 5-per cent incentive to garment exporters for using locally spun yarn or withdrawing the bonded warehouse facility for importing 20- to 30-count yarn, which local mills say they can adequately supply.

Representatives from the two trade bodies agreed only to the incentive option and rejected the other two proposals, according to a domestic media outlet.

They argued that a safeguard duty would raise yarn prices, while withdrawal of the bond facility would disrupt exporters’ operations and lead to loss of business.

Some Bangladesh Textile Mills Association (BTMA) representatives also agreed to the 5-per cent incentive proposal.

Many importers reportedly misuse the bonded facility by selling imported yarn in the local market illegally, which harms domestic producers.

Some businessmen present at the meeting said the government may consider imposing a 10-per cent safeguard duty as a compromise.

ALCHEMPro News Desk (DS)