Bangladesh set to lift ban on yarn imports from Nepal

The government is set to withdraw ban on import of all types of yarn from Nepal following a request from the neighbouring country to facilitate bilateral trade.

The National Board of Revenue (NBR) has decided in principle to lift the ban to allow yarn export by the landlocked Himalayan nation through Banglabandha port in Tentulia of Panchagarh.

Officials said the customs would open up the land port for Nepalese yarn exporters hopefully by next June through issuing orders.

Kathmandu has been urging Dhaka since 2017 to remove the ban, claiming that it was causing heavy financial losses to Nepal's yarn manufacturers.

However, the Bangladesh Textile Mills Association (BTMA) strongly opposed the decision, saying that the facility might be abused by third country as there is no such spinning mill in Nepal to export yarn to Bangladesh.

NBR second secretary (customs international trade and agreement) Akter Hossen said they made the decision considering bilateral relations with the South Asian neighbour. He said commerce ministry also requested the revenue board to consider Nepal's proposal on yarn import.

The NBR's effort to take opinion of the stakeholders in this regard faced a blow due to theCovid-19 pandemic, he added.

According to customs officials, stakeholders' consultation is not mandatory in this case as the NBR and the ministry are fully empowered to make such decision.

Earlier of April 07, 2019, Mr Hossen said, the NBR allowed import of acrylic yarn from Nepal for a year.

However, no consignment of acrylic yarn was exported during the period from Nepal, he added.

The landlocked neighbour proposed to withdraw the ban during multiple bilateral meetings.

Officials said the government decided to relax the ban to expedite negotiations of the upcoming preferential trade agreement (PTA) between the two countries.

In 2002, Bangladesh imposed restrictions on yarn import through land ports to safeguard the local cotton yarn industry.

However, the ban was lifted within years only for Benapole land port and the ban remains in place for Banglabandha port.

Currently, two of the land ports-Banglabandha and Fulbari (Siliguri of West Bengal in India)-are being used for bilateral trade between Nepal and Bangladesh.

BTMA president Mohammad Ali Khokon said there is no testing or infrastructure facilities at the Banglabandha port to examine yarn import.

There is also no laboratory at the port for measuring the quality of yarn (yarn count), he added.

"The facility might be abused by third-country exporters who would take the advantage of exporting other products under the guise of yarn," Mr Khokon mentioned.

In the past four years, Nepal could not provide details of their spinning mills, capacity and other relevant queries of Bangladesh relating to yarn export, he added.

BTMA secretary general Mansoor Ahmed said it would not be cost-effective as import cost would be higher through Banglabandha than that of Benapole.

Customs officials said allowing yarn import is not directly related with PTA, but it apparently seems that Nepal considers it as a burgeoning issue as PTA would facilitate Bangladesh.

Mr Hossen said the customs wing is collecting data from field offices to revise the negative list of import products through land ports.

"An SRO will be issued with the fresh list of negative products in June at the time of (unveiling) the national budget for fiscal year 2021-22," he said.

He said the prime minister is willing to maintain good bilateral ties with regional small countries like Nepal and Bhutan.

As per her instruction, the NBR is considering relaxation of trade measures with the countries.

Bangladesh has positive trade balance with Nepal.

Nepal is the major export market for Runner motorcycle, Hatil furniture and Rahimafrooz battery.

According to a report of the Kathmandu Post, Nepal exports polyester and viscose blend yarn worth over Rs8.0 billion annually.

Of the total export figures, half is exported to Turkey.

India, Hong Kong and some Southeast Asian countries, including Vietnam, are the other major importers of Nepali yarn.