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Finance Minister promises to address textile industry's woes
06
Sep '11
Bangladesh Finance Minister AMA Muhith has promised the ailing textile mills of the country that the Government would raise their cash incentives that they get on sales.

Uncertainty in international cotton prices and relaxation of Rules of Origin (RoO) by the European Union has hard hit the textile mills, which are witnessing a fall in their sales turnover over the past few months.

The Minister met representatives of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA).

Members of the three associations contribute to around 80 percent of the country's overall exports and around 30 percent of imports.

The three associations sought a ten percent rise in current cash incentives that they get on their sales, and demanded that it should be hiked to 15 percent from the present five percent.

The Minister assured the textile millers and garment producers that the Government would consider increasing cash incentives on sales in order to pull them out of the ongoing adversities.

Mr. Muhith said that the majority of the demands raised by the textile industry were legitimate and the Government would adopt a sympathetic view in considering these demands as the sector is currently confronted with several issues.

He said that after consulting the other ministries an immediate solution will be worked out to address the issues of the sector, after the Eid holidays.

Leaders of the three associations raised a demand for several stimulus benefits from the Finance Ministry which includes a demand for capping yarn (up to 60 counts) imports for six months and conversion of textile mills' working capital loans into term loans.

BTMA President Jahangir Alamin stated, if a substantial rise is not granted in the cash incentive, majority of the 300 textile and spinning mills in the country would be compelled to close down as it would become impossible for them to withstand competition from low cost import of yarn from countries like China, India and Pakistan.

Fibre2fashion News Desk - India

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