Bangladesh’s economy is facing renewed pressure as the country’s vital textile and garment sector plunges into a deepening crisis, triggered by a controversial policy decision taken earlier this year. The downturn, now visible across industrial hubs and labor markets, is raising serious concerns about the broader economic trajectory of the country.
In April, the interim administration led by Nobel laureate Dr. Muhammad Yunus imposed an effective ban on yarn imports from India through land ports, aiming to protect domestic spinning mills and reduce dependence on Indian supplies. However, the restriction applied only to land ports, leaving sea ports untouched. As a result, yarn imports from India through maritime routes not only continued but surged sharply in recent months.
Industry insiders report that over the past two years, yarn imports via sea routes have increased by more than 50 percent, with the total import value nearing USD 2 billion. Cheaper Indian yarn flooding the market has undercut locally produced yarn, which is significantly more expensive due to higher production costs in Bangladesh. Buyers, following market logic, have shifted toward lower-priced imports.
The consequences for domestic producers have been severe. Warehouses of spinning mills across the country are now piled with unsold yarn worth more than Tk 9,000 crore. With cash flow drying up, many mills are struggling to pay workers’ wages, utility bills, and operational expenses. More than fifty spinning mills have already shut down fully or partially, while dozens more are on the brink of closure.
The social impact is equally alarming. Thousands of workers have lost their jobs or are facing uncertainty as factories scale down or close operations. Industrial belts such as Savar, Gazipur, and Narayanganj are witnessing a steady stream of factory shutdowns, affecting not only workers but also local economies dependent on industrial activity. Even large industrial groups have been forced to reduce production, signaling the depth of the crisis.
Notably, industry leaders had warned the government at the time of imposing the restriction that a land-port-only ban would prove ineffective unless sea-route imports were also addressed. Textile mill owners’ associations cautioned that such a partial measure could destabilize the market rather than protect local producers. Those warnings went unheeded, and the situation has now spiraled beyond easy control.
The textile and garment sector is the backbone of Bangladesh’s economy, accounting for nearly 80 percent of export earnings and contributing close to double digits to GDP. The ongoing disruption in this sector therefore poses a direct threat to economic stability, foreign exchange earnings, and employment. While some industry players accuse India of dumping yarn at unfairly low prices, economists point out that without competitive pricing and coherent trade policy, domestic producers will continue to lose ground.
Experts warn that unless the government urgently revises its import and trade policies, the crisis could deepen further, spilling over into the banking sector, employment figures, and overall economic growth. What was intended as a protective measure has now emerged as a cautionary tale of how political rigidity and incomplete policymaking can accelerate economic decline.
In effect, the land-port yarn import ban—introduced to safeguard local industry—has evolved into a self-inflicted blow to Bangladesh’s textile sector, underscoring the high economic cost of flawed policy decisions at a critical time for the nation.
