Home / Knowledge / News / Textiles / Govt doubles cash incentive for primary textile sector
Govt doubles cash incentive for primary textile sector
24
Sep '11
In order to support the Tk 300 billion primary textile industry in the country, the Bangladesh Government has doubled the cash incentive for the functional mills from the current five percent to 10 percent for rest of the fiscal year 2011-12.

Bangladesh's primary textile industry has been badly hit by declining sales during the past few months due to fluctuations in the international cotton prices and the European Union (EU) relaxing its import rules.

The Ministry of Finance's latest decision would increase the burden on public exchequer during the current fiscal by around seven billion Tk.

Besides raising the cash incentives, the Ministry directed the Bangladesh Bank (BB) to transform the ailing textile units' short-term loans into long term debt obligations, to save the textile units from turning defaulters.

The decision of increasing the cash incentives, which has been made applicable from July 2011 onwards, would benefit the spinning as well as weaving textile units under the Bangladesh Textile Mills Association (BTMA).

However, the benefit would also be made available to the BTMA members who procured cotton at higher prices during August 2010 to March this year.

As per the Ministry order, any decision as to whether the textile mill owners have paid higher prices to procure cotton would be taken based on their six month's average purchase price since August 2010.

The Government's move of raising the subsidy amount in a protective manner has been appreciated by the textile millers as well as the BTMA leaders. Earlier they had placed a demand for a 15 percent subsidy, terming it as their sustenance support against external threats.

As stated by the textile millers and the BTMA members, absence of markets for selling products, may lead to a collapse of the primary textile sector of the country, as they may end-up accumulating large amount of stocks worth around Tk 60 to Tk 70 billion.

Owing to their capital intensive nature, the domestic textile firms involving large scale investment in domestic as well as foreign currencies are now finding it difficult to find markets to sell their products even at a price much below their production cost. This is mainly because of a crash in international cotton prices as these mills had procured cotton from international markets by paying higher sums.

Moreover, EU's move of easing its import regulations since January 2011 has also affected these textile units, as it has allowed a duty-free access to the Bangladeshi garment producers to ship their goods to the 27 nation bloc even if these goods are not made from domestically produced yarn.

Earlier, the domestic textile mills enjoyed a guarded local market as the old EU rules required the garment producers to procure fabric and yarn from domestic market to avail duty-free access to the EU markets.

The primary textile industry of Bangladesh comprises ofweaving, spinning, dyeing, printing and finishing. Until now, the industry had been playing a vital role as a backward linkage industry for knitwear and garment industries by supplying the yarn and fabric requirements of the units in these industries.


Must ReadView All

Uzbekistan, S Korea to launch textile techno park in Sept

Textiles | On 19th Feb 2018

Uzbekistan, S Korea to launch textile techno park in Sept

Uzbekistan and South Korea plan to launch a modern textile techno...

3 African nations may face AGOA sanctions if Mitumba banned

Apparel/Garments | On 19th Feb 2018

3 African nations may face AGOA sanctions if Mitumba banned

Rwanda, Tanzania and Uganda will face US trade penalties, including...

India’s Uttar Pradesh woos Tiruppur knitwear industrialists

Apparel/Garments | On 19th Feb 2018

India’s Uttar Pradesh woos Tiruppur knitwear industrialists

Two top Uttar Pradesh government officials visited Tamil Nadu’s...

Interviews View All

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Sandip Bhojani, Manthan Patel

Krypthm Tradelink LLP is a Surat-based manufacturer of westernwear....

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

February 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
70.3%
No
12.9%
Skip
16.8%

Total Votes: 101

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.4%
No
29.7%
Skip
6.9%

Total Votes: 101

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
88.1%
No
8.9%
Skip
3.0%

Total Votes: 101

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
83.2%
No
7.9%
Skip
8.9%

Total Votes: 101


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search