Bangladesh NBR Notification — Yarn Import Ban Through Land Ports (April 2025)

Mechanism

The NBR Chairman Md Abdur Rahman Khan signed the notification on 13 April 2025 with immediate effect, directing all land customs stations to halt clearance of yarn imports. The measure applies across all land border entry points — most consequentially Benapole (West Bengal corridor), Bhomra (West Bengal corridor), Banglabandha (North Bengal / West Bengal), Burimari (West Bengal), and Sonamasjid (West Bengal/Rajshahi) — which together handled the majority of India-to-Bangladesh yarn flows.

The causal chain runs: (1) Bangladesh Textile Mills Association (BTMA) petition in February 2025 citing widespread under-invoicing of land-port yarn; (2) Bangladesh Trade and Tariff Commission (BTTC, under Ministry of Commerce) conducted an inquiry and in March 2025 recommended restricting land-port entry; (3) Ministry of Commerce instructed NBR on 28 March 2025 to take regulatory action; (4) NBR issued the notification on 13 April 2025. The gazette publication followed on 15 April 2025.

The underlying customs-valuation gap was significant: BTTC data showed land-port declared values were materially below Chattogram benchmark prices, implying systematic mis-declaration that gave Indian yarn an effective price advantage beyond its market rate.

Sectoral geometry

Bangladesh's RMG sector (garments ≈ 84% of total exports, ~USD 47bn in FY2023-24) depends heavily on yarn as the upstream input for knitwear. The sector splits between:

• Spinning mills (BTMA): domestic producers who compete directly with imported yarn; benefit

from the ban; lobbied for it actively.

• Knitwear manufacturers and exporters (BKMEA): buy yarn as an input; land-port sourcing gave

price flexibility; BKMEA President Mohammad Hatem called the restriction "suicidal for apparel exporters" because cost of yarn is a primary competitive factor in export pricing.

• Woven garment manufacturers (BGMEA): less directly affected (woven uses fabric, not yarn

directly); broadly neutral.

The policy explicitly trades off backward-linkage domestic capacity (spinning mills) against RMG export competitiveness — a classic LDC-graduation-era tension where Bangladesh must build industrial depth even at some marginal cost to its export engine.

LDC graduation context

Bangladesh faces graduation from UN LDC status on 24 November 2026, at which point it loses preferential tariff access to major export markets (EU GSP Everything But Arms, certain UK preferences). In this context, strengthening domestic backward linkages — including spinning capacity — becomes strategically important to reduce exposure to imported-input costs that will no longer be offset by duty preferences on final goods. The NBR notification is coherent with this longer-run defensive industrial logic even as it imposes short-run RMG cost pressure.

Bilateral escalation

India's yarn exports to Bangladesh through land ports were the dominant flow affected. The Indian textile industry flagged the restriction immediately. India's DGFT responded on 17 May 2025 with Notification 07/2025-26, restricting the land-port entry of Bangladeshi RMG, processed food, rubber and plastic goods, and wooden furniture into India — a direct retaliatory measure recorded in the IPTM register at 2025-05-17-india-dgft-bangladesh-port-restrictions. The pair constitutes a bilateral trade-restriction escalation ladder: BD restricts IN yarn imports via land → IN restricts BD finished-goods exports via land.

Open questions

• Whether NBR will extend the land-port restriction to other textile inputs (fabric, accessories)

following further BTMA/BTTC representations

• Whether the May 2025 diplomatic fallout (India retaliation) will cause Bangladesh to suspend

or narrow the original notification

• Whether seaport-routed yarn volumes from India expand sufficiently to offset land-port

restrictions, or whether Bangladesh sourcing shifts toward China/Pakistan origins

• Whether the BGMEA/BKMEA lobby succeeds in securing a transition period or partial exemption

for manufacturers with open Letters of Credit