The Bangladesh Garment Buying House Association (BGBA) has warned that scrapping the bonded warehouse facility for yarn imports could disrupt the supply chain, push up production costs and undermine apparel exports, urging the government to withdraw what it described as a "self-destructive" decision.
The association said the decision has effectively pushed the garment industry to a "deathbed in the ICU", triggering serious concerns among international buyers, many of whom have already shifted their 2026 sourcing orders to competing countries amid growing uncertainty.
BGBA President Mohammad Mofazzal Hosen Pabel made the remarks at a press conference held at the association's office in the capital's Uttara on Sunday.
The event was organised to press for the reversal of the decision to withdraw bonded warehouse facilities for importing yarn of 10 to 30 counts.
Describing the recommendation as misguided, Pabel said, "Instead of addressing existing problems, the government is moving towards a self-destructive decision. This will push the garment industry to a critical stage. The government must sit with all stakeholders and find a solution through dialogue."
Highlighting buyers' concerns ahead of the national election, he said major global retailers are worried about security and have already indicated plans to relocate their 2026 purchase orders to other countries.
"If security cannot be ensured, buyers will not place orders in Bangladesh. Competing countries are aggressively portraying Bangladesh negatively, and some buyers have even imposed restrictions on visits to the country," he added.
Referring to export performance, Pabel noted that shipments have been on a downward trend since July, with exports falling by around 14.29 per cent in December.
He said the government had set an export target of $44.3 billion, but the country is now heading towards $25 billion -- far from the long-term aspiration of reaching $50 billion.
Explaining the impact of withdrawing the bonded warehouse facility for yarn imports, he said the move would raise yarn prices, which would ultimately increase garment production costs and erode Bangladesh's competitiveness in the global market.
He also expressed concern over the banking sector,
noting that it now takes up to a month to open letters
of credit (LCs).
"Delays in opening back-to-back LCs make timely shipment increasingly difficult," he said.
Warning of a growing investment slowdown, Pabel said, "If local entrepreneurs themselves are afraid to invest, it will be even harder to attract foreign investors."
He urged the government to engage with stakeholders, listen to their concerns, and refrain from taking what he described as self-destructive policy decisions.
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