Bangladesh Textile Mills Association (BTMA) has formally requested the government to extend the export cash incentive by three years, until December 2028, warning that the country’s textile backbone is under severe financial strain and risks deeper capacity erosion without continued policy support.
In a letter to the Finance Secretary, BTMA President Showkat Aziz Russell stated that the incentive—currently valid until December 31, 2025, under Bangladesh Bank’s FE Circular No. 28—remains critical as mills grapple with taka depreciation, high raw material import costs, geopolitical disruptions, energy shortages, and rising wages.
BTMA highlighted a convergence of pressures:
- Global instability from the Ukraine–Russia and Israel–Palestine conflicts
- Slower global demand and longer export realisation cycles
- Gas price hikes and a 70% increase in minimum wages
- Persistent power and gas shortages, forcing many mills to operate below capacity
- Rising inventories of unsold yarn and production cutbacks
The association noted that the textile sector has around $23 billion in private investment, supplies about 70% of inputs to the ready-made garment industry, and contributes roughly 30% of Bangladesh’s foreign-exchange earnings (with textiles and apparel together accounting for about 85% of exports).
Separately, BTMA has asked Bangladesh Bank to extend the import credit facility for raw materials until December 31, 2026. Existing facilities under FE Circulars No. 08 and 27 expire at the end of 2025 and cap financing at 180 days.
Millers argue the real production-to-export cash cycle typically spans 270–300 days, making a 360-day credit window necessary to avoid liquidity stress and production disruptions.
Representing 1,869 mills across spinning, weaving, dyeing, printing and finishing, BTMA’s appeal signals mounting urgency ahead of Bangladesh’s upcoming budget and trade policy decisions. Industry leaders warn that without extended incentives and credit relief, export competitiveness—and the stability of the broader apparel supply chain—could weaken further in 2026–28.
