The Bangladesh Textile Mills Association (BTMA) has urged the government to retain the 30% value-addition requirement on imports of garment raw materials, including yarn, warning that its removal could weaken the domestic primary textile industry.

The government has proposed scrapping the requirement in its FY2026–27 budget to simplify business operations. However, textile millers argue that the move could encourage garment exporters to rely more heavily on imported yarn instead of sourcing from local spinning mills.

BTMA President Showkat Aziz Russell stated that Bangladesh's primary textile sector has attracted investments of approximately $23 billion, which could be threatened by the proposed policy change. He also highlighted that 114 of the 234 spinning mills owned by BTMA members have shut down since 2019, while operational mills are running at only 60–70% capacity due to gas shortages and increasing competition from lower-cost Indian yarn.

According to BTMA data, imports of Indian cotton yarn increased 22.07% year-on-year to $1.79 billion in FY2024–25, with import volumes reaching 556.12 million kg, compared with $1.48 billion in FY2023–24.

The association also warned that excessive dependence on imported yarn could expose Bangladesh's garment industry to supply disruptions and price fluctuations. Strengthening domestic spinning capacity is particularly important as Bangladesh prepares for graduation from Least Developed Country (LDC) status and future trade requirements involving local value addition.

Additionally, BTMA has requested the government to reduce the corporate tax rate for primary textile mills from 27.5% to 12% and maintain it until 2030 to encourage investment and support the industry's long-term competitiveness.