The proposed FY27 tariff changes may protect upstream producers, but they could raise input costs just as Bangladesh needs more man-made-fibre exports.
Bangladesh’s push into man-made-fibre apparel faces a policy setback after the government proposed higher import duties on several synthetic raw materials in the FY2026-27 budget. The budget proposes a 5% import duty on polyester staple fibre, while duties on PVC resin and PET resin would rise from 5% to 10% to protect domestic producers. It also proposes a 5% import duty on spandex/elastomeric/elastane and on polyester textured yarn and other polyester-based yarns produced locally.
MMF ambition meets cost pressure
The timing is commercially sensitive. Bangladesh remains heavily dependent on cotton-based apparel, which accounts for more than 70% of its garment exports, while MMF-based products represent about 70% of global apparel demand. That mismatch has long been viewed as a structural weakness in Bangladesh’s export basket, especially as activewear, sportswear, outerwear, lingerie and technical casualwear grow faster than basic cotton categories.
Industry data cited by Apparel Resources show Bangladesh’s cotton apparel exports rose from about US$3 billion in 2001 to US$33 billion in 2021, while MMF apparel exports increased by only about US$8 billion over the same period. The gap explains why exporters have been trying to accelerate investment in synthetic, blended and higher-value apparel.
Exporters push back
The Bangladesh Garment Manufacturers and Exporters Association has asked the government to withdraw the proposed 5% duty on PSF and the additional 5% duty on PVC and PET resin, arguing that MMF-based apparel has major export potential. BGMEA also warned that post-LDC competitiveness will require lower business costs, reliable energy and simpler customs and port procedures.
BTMA Vice-President Md Saleudh Zaman Khan said the proposed PSF duty could discourage MMF garment exports and push manufacturers back toward cotton-based production. He suggested incentives or subsidies as an alternative route to building domestic MMF backward linkages.
The policy trade-off
The central issue is sequencing. Bangladesh needs local MMF capacity, but raising raw-material costs before domestic supply is deep, diversified and price-competitive could weaken exporters in precisely the categories where global demand is shifting. The next signal to watch is whether the final budget keeps the duties intact or introduces exemptions for export-oriented users.
