Local textile entrepreneurs are seeking a refinancing facility from the central bank to modernise the industry, sources said.
Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), recently urged the commerce ministry to address this issue.
He pointed out that while denim, man-made fibre (MMF), home textiles, décor, terry towels and recycled products are prioritised in the Export Policy-2021-24, essential sectors such as spinning, fabric manufacturing, dyeing, printing and finishing within the textile industry are not included.
He further said that mills under the primary sector have been instrumental in achieving export earnings by supplying yarns and fabrics to the country's apparel sector.
Besides, the sector has been catering to the demand for local clothing.
The BTMA said that the textile industry, including ready-made garments, has been facing new challenges regularly due to globalisation. In response, textile owners are aligning their mills with modern and new technologies to remain competitive in the globalised era.
In 2021, the Bangladesh Bank (BB) introduced a refinancing scheme amounting to Tk 10 billion for the modernisation and technological development of export-oriented sectors.
The tenure of the loans under the refinancing scheme ranges from three to ten years at a 5 per cent to 6 per cent interest rate with a one-year grace period, according to a source.
The BTMA has requested that the textile sector be included in the new export policy 2023-26, which is currently being prepared by the commerce ministry.
Industry insiders estimate that the primary textile sector (PTS) currently meets 85 per cent to 90 per cent of yarn demand for knit RMG and 35 per cent to 40 per cent of yarn demand for woven RMG.
Around $16.00 billion has been invested in the primary textile sector, which contributes around 13 per cent to the country's GDP. Over 84 per cent of export earnings come from textiles and textile-related products, according to BTMA data.
The association has 1,780 member mills, including 519 yarn manufacturers, 938 fabric makers and 323 dyeing-printing-finishing mills.
The sector earned $21.9 billion, $18 billion, $20.9 billion, $28.8 billion and $31.03 billion in the fiscal years 2018-19, 2019-20, 2020-21, 2021-22, and 2022-23, respectively.
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