The MoU targets a small but strategically important gap in Bangladesh’s textile model: high cotton import dependence and limited domestic traceability.
The Bangladesh Textile Mills Association has signed a memorandum of understanding with CottonConnect Limited to promote domestic cotton production, build a more sustainable and traceable cotton supply chain, and strengthen market linkages for locally grown fibre. The agreement was signed at BTMA’s office in Gulshan, Dhaka, with BTMA president Showkat Aziz Russell leading the meeting and CottonConnect CEO Alison Ward heading the CCUK delegation.
Import dependence meets policy friction
The initiative comes as Bangladesh tries to raise local cotton output while remaining heavily dependent on imported fibre for its spinning and textile mills. During the meeting, the parties discussed the government’s target of producing 0.5 million bales of cotton by 2030, as well as the existing 1% tax at source on domestic cotton supplied to export-oriented industries. BTMA urged the government to withdraw the tax, arguing that it discourages local cotton production and use.
The policy issue matters because domestic cotton remains a very small part of Bangladesh’s fibre economy. Industry reporting estimates the country needs around 8.5 million bales of cotton annually, while local output supplies only 2–4% of demand. That gap leaves mills exposed to global cotton prices, freight costs, foreign exchange pressure and supplier concentration.
Traceability becomes commercial infrastructure
Under the MoU, BTMA and CottonConnect will work on domestic cotton production, regenerative farming practices, traceability systems, ESG reporting, capacity building, policy advocacy and international supply-chain linkages. These areas are increasingly important as global brands demand more evidence on fibre origin, farm practices, environmental impact and labour conditions.
For Bangladesh, stronger domestic cotton traceability would support more credible sourcing claims and shorten part of the raw-material chain. Even if local cotton cannot replace imports at scale, it can create a more resilient, visible and brand-aligned fibre stream for selected export orders.
The next test
The agreement’s success will depend on execution beyond the signing ceremony: farmer participation, agronomic support, ginning quality, mill uptake, price incentives and tax reform. The next signal to watch is whether the government removes the 1% source tax and whether mills commit real procurement volumes to traceable Bangladeshi cotton.
