Spinners blame India for dumping yarn as imports surge 137%

Local spinning mills are left with Tk 12,000 crore of unsold stock as cheap yarn from India floods the market, according to the Bangladesh Textile Mills Association (BTMA).

BTMA leaders say yarn imports from the neighbouring country rose 137 percent during the April-October period this year, as Indian traders are dumping it in Bangladesh at more than $0.30 per kilogramme below domestic prices.

As a result, nearly 50 local spinning mills have closed in recent years after failing to survive the competition, said BTMA President Showkat Aziz Russell.

Speaking at a press conference at Gulshan Club in Dhaka yesterday, he added that one of his own mills has shut down, while another is struggling to stay afloat.

"These mills had an investment of Tk 500-Tk 700 crore each, and it is difficult to start them anew," he said.

The BTMA president said Bangladesh should reduce its dependence on Indian yarn. In the past, India stopped cotton exports to Bangladesh without any prior notice, causing severe losses for local spinners.

"If Bangladesh depends heavily on Indian yarn, they may stop supplying it suddenly, putting our garment sector in trouble," he said.

In April this year, Bangladesh imposed a ban on importing yarn from India through land ports to protect local textile producers from cheaper Indian yarn and promote domestic production. But the restriction does not cover imports through sea routes.

At the press conference, millers said they do not want a complete ban on Indian yarn. Rather, they advocated for reducing the bilateral trade gap, which now heavily favours New Delhi.   

Besides, they called for import bans on certain yarn types abundantly produced domestically.

In his speech, Russell said the Indian economy is protective in nature. He said that once his company exported Royal Crown Cola to Kolkata, but the Indian government raised tariffs on the product within 15 days, affecting the business.

According to him, the total investment in the garment and primary textile sectors is more than $75 billion, including $23 billion in the primary textile sector. Combined, the two sectors contribute $40 billion in exports.

His recommendations included facilitating warehousing for cotton merchants to allow stockpiling of US cotton for use in local mills, as promised by Dhaka during reciprocal tariff negotiations.

At the programme, other millers said they cannot compete with cheap Indian yarn, currently priced at $2.50 per kilogramme, while local mills must sell at $3 per kilogramme due to shortages of raw materials such as cotton.

They called for at least 10 percent cash incentives for garment exports that use locally spun yarn, an increase in the Export Development Fund (EDF) at lower interest rates, and reduced bank lending rates.

Former BTMA director Razeeb Haider described the influx as an act of "economic aggression", designed to "pressure" Bangladesh's primary textile sector. "Because of low prices, international clothing brands are also choosing Indian yarn over local yarn, severely affecting the spinning sector," he said.

Haider, managing director of Outpace Spinning Ltd, said that in fiscal year 2025-26, $2.0 billion worth of yarn was imported from India, with local mills using 1,600 tonnes daily. From April to October 2025, imports reached $950 million, a 137 percent increase year-on-year.

Bangladesh has become the largest destination for Indian yarn exports, receiving 44 percent of the total, while Cambodia ranks second at 21 percent, he added.

Former BTMA president A Matin Chowdhury said India provides incentives at multiple stages, from cotton growers to factories and exporters, making Indian yarn highly competitive.

Another former BTMA president, Mohammad Ali Khokon, said that Indian control of Bangladesh's backward linkage industries could eventually extend to the garment sector.

"Nearly 40 to 50 mills have closed, and more face the threat of shutdown. Amendments to the labour law may also provoke unrest," he said.

At the programme, BTMA President Russell urged the government to introduce policy support within 72 hours to save the textile sector.

With 25 percent cash incentives, back-to-back LC facilities, and the EDF, he said the sector could still grow.