Bangladesh considers tariffs on Indian cotton yarn imports
NEW DELHI : Bangladesh is mulling tariffs on Indian cotton yarn imports, with the Bangladesh Trade and Tariff Commission discussing this on January 5, Indian yarn industry executives said on Wednesday, citing Bangladeshi trade reports, against the backdrop of deteriorating bilateral relations.
Bangladesh tariffs on Indian yarn could hit domestic prices, mills, and farmers, analysts said.
Levies by Bangladesh, the world’s largest importer of raw cotton, on yarn imports from India, its largest supplier, could weaken domestic prices, hitting mills and farmers here, analysts said.
India has been sheltering former Bangladesh PM Sheikh Hasina since she fled Dhaka in mid 2024 following student-led protests, and a harsh crackdown by security forces that killed hundreds but only served to intensify the agitation against her. She has been sentenced to death, in her absence, by a Bangladesh tribunal.
Meanwhile Dhaka has grown closer to both Beijing and Islamabad, several of its leaders, including its interim head of government Mohammed Yunus, have made intemperate comments about India, and New Delhi has condemned a string of recent murders of Hindus in Bangladesh, while the interim government of the neighbouring country continues to press for an extradition of its toppled leader, to which India has remained non-committal.
The latest spat between the two countries involved the participation of a Bangladesh cricketer in the Indian Premier League. After protests in India forced the Indian cricket board to ask the team that signed him on to release him, Dhaka said it would not travel to India for a major cricket tournament, citing security concerns.
The strained ties could impact trade with India, which was Bangladesh’s third-biggest trading partner in 2024. This may impact goods worth around $770 million, amounting to nearly 42% of Bangladesh’s exports to India, according to a May 2025 analysis of the Global Trade Research Initiative.
“Bangladesh is considering imposing duties on Indian yarn. Last year, it restricted yarn imports. This will impact markets in India,” said Atul Ganatra, a former president of the Cotton Association of India.
In April last year, Bangladesh banned import of yarns from India via land ports through a notification by the National Board of Revenue. This came barely days after the country announced a ban on the import of several Indian commodities, including newsprint, cigarette paper, duplex board, potatoes, powdered milk and components for television sets and radios. In May 2025, India imposed curbs on imports of ready-made garments and processed foods from Bangladesh.
In its January 5 meeting, the Bangladesh Trade and Tariff Commission reviewed cotton and cotton yarn imports from India and discussed a specific proposal to impose tariffs, said Amrit Kota of Gayatri Impex Ltd, a Mumbai-based exporter of yarn.
India exported cotton yarn valued at $3.57 billion in 2025, of which Bangladesh was the largest recipient, accounting for about 45.9% of its total yarn shipments. India is the largest supplier of cotton yarn to Bangladesh, which feeds its large spinning industry, while China is the top exporter of finished fabric to the country.
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