Textile sector needs urgent support

The country's textile sector, the backbone of export economy and the foundation on which the garment industry stands, is facing an existential crisis. Nowhere is this more evident than in the country's spinning mills, where mounting losses, policy inertia and external pressures are pushing an entire industry to the brink. The Bangladesh Textile Mills Association (BTMA) on Sunday issued a stark warning: unless the government takes effective decisions within the next 72 hours, domestic yarn and textile production could suffer irreversible damage.

This is not the language of routine lobbying. It is the alarm of an industry that has exhausted its buffers and is now fighting for survival.

According to industry leaders, the situation is no longer tolerable. Many mills have already shut down, while others are operating far below capacity. If current trends continue, they warn, the entire sector could collapse. Bangladesh currently has more than 500 spinning mills, yet a significant number are now being forced to sell yarn below production cost -- an unsustainable practice that guarantees losses rather than recovery.

At the heart of the crisis lies a deadly combination of rising production costs and distorted market competition. Energy prices, particularly gas, remain a critical burden. Textile entrepreneurs point out a glaring inconsistency in policy: when global gas prices rise, domestic tariffs are promptly increased; but when international prices fall to historic lows, local industries see no relief. For an energy-intensive sector such as spinning, this asymmetry is devastating.

The result is predictable. Mills bleed cash. Working capital dries up. Debt mounts. And confidence evaporates.

The problem is compounded by dumping practices, particularly yarn imports from India at prices that domestic producers simply cannot match. Industry insiders allege that Indian exporters are selling yarn in Bangladesh at around 30 cents less per unit than in their own domestic market. Such pricing, whether driven by subsidies, excess capacity or strategic market capture, has wreaked havoc on local production.

This is not merely a question of trade competition; it is a question of industrial sovereignty. Bangladesh has been here before. Industry leaders recall that in the past, when domestic textile mills collapsed, India suspended exports of cotton and yarn, exposing Bangladesh's dangerous dependence on imports. To allow the same vulnerability to re-emerge would be a strategic failure.

An import-dependent textile base is a contradiction in terms for a country whose global reputation rests on its garments industry. The spinning and textile sectors are not peripheral players; they are the supply chain's foundation. Undermine them, and the entire apparel ecosystem -- from small factories to multinational buyers -- becomes hostage to external shocks.

The scale of distress is visible in the numbers. Spinning mills are currently holding unsold yarn worth approximately Tk 120 billion. This idle inventory represents frozen capital, rising interest costs and shrinking liquidity. For many entrepreneurs, it is the final straw.

Yet this crisis is not inevitable. It is the outcome of policy choices -- and policy neglect.

Bangladesh's economic success over the past three decades has been built on a simple but powerful strategy: value addition at home. The textile sector allowed the country to move beyond basic assembly into integrated production, reducing lead times, stabilising costs and increasing competitiveness. To let this achievement unravel would be to reverse decades of progress.

The government's response so far has been cautious, even hesitant. But caution, at this moment, risks becoming complicity. What the sector requires is not sympathy, but decisive intervention.

First, energy pricing must be rationalised. Domestic gas tariffs for export-oriented and backward-linkage industries should reflect global market realities. If international prices fall, domestic industries should benefit. Without competitive energy costs, no spinning mill can survive -- regardless of efficiency or scale.

Second, dumping must be confronted head-on. Bangladesh has the legal and institutional tools to impose anti-dumping duties and safeguard measures under World Trade Organization rules. What has been missing is the political will to deploy them swiftly and credibly. Protecting domestic industry from unfair trade practices is not protectionism; it is responsible governance.

Third, targeted financial relief is essential. Temporary support mechanisms -- whether in the form of low-interest working capital loans, rescheduling of existing debt or tax relief -- could provide breathing space for mills struggling under unsold inventories and cash flow shortages. Without liquidity, even viable businesses collapse.

Fourth, policy coherence must replace fragmentation. The textile sector sits at the intersection of energy policy, trade policy, fiscal policy and industrial strategy. Treating these in isolation has produced the current crisis. A coordinated, whole-of-government approach is long overdue.

The closure of some factories is not a market correction driven by inefficiency, but a systemic failure caused by distorted inputs and unfair competition. Allowing mass closures under these conditions would destroy productive capacity that cannot be easily rebuilt.

The consequences would extend far beyond spinning mills. Garment manufacturers would face higher input costs and longer lead times. Employment would be lost -- not just in factories, but across logistics, transport and services. Export earnings would come under pressure. And Bangladesh's hard-earned reputation as a reliable sourcing destination would suffer.

There is also a political dimension. Industrial decline fuels social instability. Idle factories mean idle workers, rising loan defaults and growing resentment. At a time when the country is navigating political transition and economic uncertainty, allowing such a strategic sector to implode would be reckless.

The BTMA's 72-hour ultimatum should not be dismissed as exaggeration. It reflects the urgency felt on factory floors, in boardrooms and in bank offices across the country. Decisions delayed today will be closures tomorrow.

Saving the textile sector is not about favouring one industry over another. It is about safeguarding the structural integrity of Bangladesh's economy. It is about recognising that backward linkage industries are national assets, not disposable entities.

History will judge this moment. Either the government steps in with clarity, courage and speed -- or it presides over the slow dismantling of one of the country's most critical industrial pillars.

Bangladesh built its development story on textiles. Abandoning that foundation now would be an unforgivable mistake.

mirmostafiz@yahoo.com