Bangladesh is considering ending duty-free imports of Indian yarn and may impose tariffs to bolster its domestic textile industry, according to media reports. The move comes amid rising concerns that local producers are struggling to compete with cheaper Indian yarn, which has benefited from preferential trade under the South Asian Free Trade Area (SAFTA) agreement.
The media report stated that a potential tariff structure has not yet been finalised, but officials indicate that it could apply to both raw and partially processed yarn imported from India. The government is also reportedly exploring complementary measures, including subsidies and incentives to modernise domestic spinning mills and improve competitiveness.
India is Bangladesh’s largest supplier of yarn, with bilateral trade valued at hundreds of millions of dollars each year. A potential move to end duty-free imports and impose tariffs could have significant implications for Indian exporters, particularly smaller and mid-sized suppliers who depend heavily on the Bangladeshi market. Any restrictions could disrupt established supply chains, reduce sales volumes, and increase costs for exporters accustomed to preferential access under the South Asian Free Trade Area (SAFTA) framework.
For Bangladesh, the introduction of tariffs may initially create short-term challenges, including supply adjustments, higher procurement costs, and potential price pressures for textile manufacturers who rely on imported yarn. However, the government and industry stakeholders view the policy as a strategic step to strengthen the domestic yarn sector, encouraging local investment, capacity expansion, and long-term self-reliance.
Over time, the move is expected to enhance competitiveness within Bangladesh’s textile industry, reduce dependence on imports, and foster a more sustainable supply chain aligned with national industrial goals. Analysts note that while the transition could be challenging for both exporters and domestic buyers, the policy reflects broader efforts by countries in the region to balance trade liberalisation with support for local manufacturing and economic resilience.
The Bangladeshi government is yet to announce an official timeline for implementing the proposed yarn tariffs. Stakeholders in both Bangladesh and India are closely monitoring the situation, as any changes could disrupt supply chains, affect pricing, and alter the dynamics of regional textile trade. |
