Bangladesh’s textile and apparel industry is showing signs of recovery after the United States resolved tariff issues, with mandatory higher local value addition and reduced duty on exports expected to expand trade opportunities.

Industry leaders say the US requirement of 40 per cent local value addition for exports is already strengthening the country’s backward-linkage industries, boosting domestic yarn and fabric production.

A reciprocal tariff provision also exempts duties on up to 20 per cent of a product’s value if US-origin components are used, encouraging Bangladeshi mills to increase cotton imports from the US.

Two domestic factors have reinforced the rebound: a ban on yarn imports through land ports and improved gas supply to factories. Customs data indicate yarn imports have fallen since the restriction was imposed.

Kutubuddin Ahmed, founder and chairman of Envoy Textiles, said the new rules would attract investment in spinning and weaving mills. Envoy, which produces 54 million yards of denim annually, with 60 percent destined for the US, has secured full-capacity orders until December. The company plans to raise the US cotton’s share of its imports from 15 to nearly 60 per cent.

MA Rahim of DBL Group stated that improved LNG supply had enabled textile plants to operate at full capacity. However, he noted August and September remain lean months, with orders expected to pick up from October.

Industry insiders caution that India and China, facing higher US tariffs, may redirect exports to Europe, intensifying competition. Liquidity issues at troubled banks also remain a hurdle for many factories.