Cutting export incentives will hurt textile sector: BTMA

The government’s decision to further cut export incentives will severely hurt the $22 billion invested in the country’s textile sector, which serves as a key integration link for the garment industry, a leader of the Bangladesh Textile Mills Association (BTMA) said today.

The primary textile sector will lose its competitiveness in international markets due to the gradual decline in incentives to benefit from exports, BTMA president Mohammad Ali Khokon said at a press conference at the association’s office in Dhaka.

Instead, the government should come up with a long-term action plan for the textile and apparel sector so that the domestic industry can survive and thrive even after it exits the least developed country (LDC) category, as other competing countries have already developed such plans and they are working well, he added.

For example, India has moved from the group of least developed countries to the group of developing countries and continues to offer many incentives for the development of the textile and clothing sector as an alternative to direct cash subsidies.

As a result, the difference in the cost of producing a kilogram of 30-thread-count yarn between Bangladesh and India is now 22 cents, as Indian yarn producers receive such financial benefits in different ways, despite being a developing country.

Unfortunately, India is more competitive in yarn production than Bangladesh. Out of the total yarn demand in Bangladesh, 13 percent comes from India every year.