In light of the decision of the Inter-Ministerial Committee formed by the Hon’ble Prime Minister, the National Board of Revenue (NBR), through Order No. 51/2026/Customs/519 dated 7 September 2026, has withdrawn Bond facilities for the import of 10–30 count cotton yarn under HS Headings 5205, 5206 and 5207. At the same time, genuine exporters have been allowed to import such yarn subject to prescribed conditions and the submission of a Bank Guarantee. The Bangladesh Textile Mills Association (BTMA) considers this decision timely and appropriate to protect the domestic textile industry, particularly the spinning sector, and to prevent misuse of the Bond facility. BTMA sincerely appreciates and thanks the Government and the National Board of Revenue for taking this important initiative.
1. Revitalizing the Domestic Textile and Spinning Sector
The import of yarn under Bond facilities has, for a long time, affected the demand for locally produced 10–30 count cotton yarn and limited the utilization of domestic spinning mill capacity. The new decision is expected to increase demand for locally produced yarn, create opportunities for closed and partially closed mills to resume operations, generate significant employment, and improve prospects for recovering investments made by banks and financial institutions. It is also expected to significantly reduce non-performing loans (NPLs) in the banking sector.
2. Increasing Value Addition and Conserving Foreign Currency
Greater use of domestically produced yarn will significantly increase local value addition across the textile and RMG value chain while reducing foreign currency expenditure on imported yarn. This will increase foreign currency retention within the country. Following LDC Graduation, Bangladesh will need to ensure minimum 40–60 percent value addition and, in certain cases, two-stage transformation to maintain and expand preferential market access. The government’s decision will play an important role in strengthening domestic value addition and supporting this transition.
3. Controlling Misuse of Bond Facilities
Under the new order, importers must submit a Bank Guarantee equivalent to the applicable duties and taxes, along with certification from the relevant association. The guarantee will be released after the products manufactured using the imported raw materials have been fully exported. This mechanism will significantly reduce the possibility of yarn imported under duty-free/Bond facilities being illegally sold or diverted into the domestic market. Consequently, the measure is also expected to strengthen compliance and increase government revenue.
4. Ensuring Repatriation of Export Proceeds
To safeguard the country’s foreign exchange position, the release of the Bank Guarantee has been linked to the repatriation of export proceeds. This means that, in addition to exporting products manufactured using the imported yarn, the relevant export proceeds must be fully repatriated to Bangladesh and confirmed by the Authorized Dealer (AD) Bank before the Bank Guarantee can be released. According to recently received information, the non-repatriation of approximately US$7 billion in export proceeds is a matter of serious concern. If implemented effectively, the above mechanism will create a financial obligation to ensure repatriation of export proceeds and reduce the risk of foreign currency remaining outside the country.
5. Bank Guarantee-Based Import Facility Is Not New
The provision for importing yarn and other necessary raw materials against a Bank Guarantee is not a new arrangement. Under a notification issued in September 2025, non-bonded exporters—those without Bond licenses—were allowed to import yarn and other required raw materials against Bank Guarantees. The association representing direct exporters in the country also welcomed the initiative. The same facility has now been extended to bonded enterprises. Therefore, there is no logical reason to assume that this mechanism will obstruct yarn imports or export activities.
Conclusion
Overall, the withdrawal of Bond facilities for the import of 10–30 count cotton yarn, together with the provision for imports against Bank Guarantees, will play an important role in protecting the domestic textile industry, increasing employment, conserving foreign currency, and establishing greater discipline within the Bond management system. Furthermore, linking the release of Bank Guarantees with the full repatriation of export proceeds will make the government’s initiative more effective and further strengthen its contribution to the national economic interest. The Bangladesh Textile Mills Association (BTMA) sincerely appreciates the Government and the National Board of Revenue for this timely and important decision.
