Textile millers in Bangladesh have urged the government to withdraw the 2 percent advance income tax (AIT) on cotton imports within a week, warning that failure to do so could force many factories to shut down.

At a press conference organised by the Bangladesh Textile Mills Association (BTMA) in Dhaka, industry leaders said the tax was imposed without prior consultation and would severely damage the sector’s competitiveness.

BTMA President Showkat Aziz Russell said, “The government’s income will fall if the industry cannot sustain itself. This 2 percent tax will have a massive business impact.”

Industry leaders highlighted that the primary textile sector, with an investment of $23 billion, is already under pressure from several factors, including high gas prices, rising bank interest rates, low gas pressure, and the devaluation of the taka.

Hossain Mehmood, chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, said the AIT would increase business costs by up to 8 percent, squeezing already thin profit margins.

Vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, Amal Podder, criticised the lack of dialogue with stakeholders.

Millers warned that Indian competitors, supported by state incentives, are now supplying yarn at lower prices, forcing Bangladeshi garment makers to shift to Indian imports.

BTMA Vice-president Md Saleudh Zaman Khan said restrictive government policies are putting the sector’s survival at risk.

The millers called on the government to rethink its approach, warning that Bangladesh’s primary textile industry could face an irreversible decline without immediate action.