Bangladesh PM Sets November 20 Deadline for Bonded Warehouse Reform

Bangladesh's interim government has set November 20 as the deadline for an inter-ministerial committee to deliver recommendations on reforming the country's bonded-warehouse system. Prime Minister Tarique Rahman issued the directive on Monday, November 9, at a meeting with leaders of the apparel and textile industries, according to meeting sources.

The committee, headed by Commerce Minister Khandakar Abdul Muktadir, will review the existing bonded-warehouse framework in consultation with industry representatives. Its mandate: propose reforms aligned with practices in competing countries and settle a dispute that has now reached the High Court.

The stakes are measurable. Yarn imports under the contested HS headings nearly doubled to 697.1 million kilograms in FY25 from 350.8 million kilograms in FY23, according to NBR data. The import bill reached Tk 267 billion in FY25.

What triggered the dispute?

The immediate conflict centers on bonded-warehouse facilities for importing 10–30-count cotton yarn, a key raw material for export-oriented garment production.

The timeline runs as follows:

• August 20: An inter-ministerial committee recommended that garment exporters source at least 50% of their yarn requirements from domestic spinning mills and import the remainder.
• September 7: The National Board of Revenue withdrew the duty-free bonded-warehouse facility for 10–30-count cotton yarn under HS headings 5205, 5206 and 5207, requiring actual exporters to provide bank guarantees equivalent to applicable duties and taxes.
• September 13: The Commerce Ministry asked the NBR to suspend the order pending further review, after garment exporters warned the restriction could raise production costs and disrupt raw-material supplies.
• October 29: The High Court suspended for three months the effect of the ministry's letter staying the NBR directive, and issued a rule questioning the legality of the ministry's intervention.

Who is in the room?

Representatives from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Textile Mills Association (BTMA) attended the November 9 meeting. All three bodies carry direct commercial weight in the outcome.

The disagreement reflects competing interests within the industry. Domestic spinning mills, represented by BTMA, seek protection from imported yarn. Garment exporters argue that access to competitively priced raw materials is essential to maintain their edge in international markets.

What does the deadline change?

The November 20 report gives the government a fixed date for resolving a question it has deferred since August. For sourcing managers, the short-term picture remains unsettled: the High Court's three-month suspension of the Commerce Ministry's stay, issued October 29, leaves the legal status of the NBR withdrawal in limbo while the committee works.

Cost exposure cuts both ways. Exporters face bank-guarantee requirements and potential duty costs if the NBR order stands. Millers face continued import pressure, with volumes under the contested headings having doubled in two fiscal years.

The initiative aims to address concerns raised by both domestic textile millers and garment exporters while enhancing the efficiency of the apparel and textile supply chain, according to the prime minister's office framing of the directive.

The committee's recommendations are expected to provide a basis for reviewing the bonded-warehouse framework and for balancing the competing interests of domestic textile producers and export-oriented garment manufacturers. Whether the November 20 report can hold both constituencies — and withstand further judicial scrutiny — will determine the terms on which Bangladesh's largest export sector sources its most contested input in the months ahead.