The Bangladesh Textile Mills Association (BTMA) has urged the government to extend the cash incentive on export receipts for three more years, until December 2028, to support the struggling textile industry.
In a letter to the finance secretary signed by BTMA President Showkat Aziz Russell yesterday, the association stated that the export-oriented textile sector and other manufacturing industries have faced substantial losses from exchange rate fluctuations while importing raw materials.
Contributing factors include the Ukraine-Russia and Israel-Palestine wars, the global economic crisis, sharp depreciation of the taka, a 250 percent rise in gas prices, a 70 percent increase in workers’ salaries, recent political unrest, worker dissatisfaction, and inadequate gas and electricity supply that prevents mills from operating at full capacity, the BTMA said.
The long-standing issues have also left large amounts of yarn unsold in spinning mills, causing continuous losses. Many mills have been forced to reduce production, which could further affect the export-oriented textile industry, the letter said.
In this situation, the BTMA stressed that extending the cash subsidy programme under Bangladesh Bank’s FE Circular No. 28, currently valid until December 31, 2025, is crucial for the survival of the industry.
The primary textile sector under BTMA has an investment of about $23 billion, the largest single investment in the private sector. The textile and apparel sector accounts for roughly 85 percent of Bangladesh’s export earnings, with the textile sector contributing 70 percent of that figure and around 30 percent of the country’s foreign exchange. BTMA’s member mills are therefore considered import-complementing industries.
In a separate letter to the central bank governor on December 23, BTMA requested an extension of the credit limit for importing industrial raw materials until December 31, 2026.
Previously, Bangladesh Bank had extended the credit period under FE Circular No. 08 and continued it under FE Circular No. 27, both of which expire on December 31, 2025. BTMA stressed that importing basic raw materials like cotton and receiving export proceeds often take 270-300 days, far exceeding the current 180-day limit, making it urgent to extend FE Circular No. 08 for another year.
