REFAYET ULLAH MIRDHA

The country’s flagship textiles and readymade garments (RMG) industries are reeling from a crippling gas crisis, threatening an estimated $70 billion in investments amid mounting global trade uncertainty over new US tariffs.

Production in many textile mills has slumped to just 30 to 40 percent of capacity, as gas pressure plummets across key industrial zones, including Narayanganj, Gazipur, Bhulta, Maona, and Tongi, according to manufacturers.

For textile units, consistent gas supply is a must for uninterrupted operations. These mills use gas for generating electricity, powering spinning machines and producing steam in boilers for fabric dyeing.

The authorities have increased the gas tariff recently, with promises of improved supply.

But many mill owners say there has been no relief even after the latest price hike as production at some factories in the industrial belts has come to a grinding halt due to zero gas pressure.

For more than a week, Israq Spinning Mills Ltd in Gazipur has been running below 50 percent capacity.

“Our daily production capacity is 170 tonnes of yarn, but due to low gas pressure, we are only managing 75 tonnes a day,” said Fazlul Haque, managing director of the factory.

Another yarn spinner, Khorshed Alam said that their daily capacity is over 25,000 pounds.

“But we failed to produce even 9,300 pounds of yarn yesterday,” said Alam, chairman of Little Group.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that the sector needs over 2,000 million cubic feet of gas daily, while current supply stands at just 1,000 mmcfd.

Currently, the primary textile sector, which covers spinning, weaving, dyeing, finishing and printing, has investments over $25 billion, while the garment industry accounts for over $30 billion.

Together, they form the backbone of Bangladesh’s export economy.

These sectors now face a dual blow. While domestic energy shortages disrupt productions, US President Donald Trump’s reciprocal tariffs on US imports add a layer of unpredictability.

Although the new tariffs are paused for 90 days, it has left Western buyers hesitant, delaying new work orders for next summer and autumn. But brands and retailers are in a wait-and-see mode.

This has an implication on the local manufacturers.

“Demand for yarn has dropped in the local market following the US tariffs. Buyers are indecisive about placing new orders,” said Israq Spinning MD Haque.

To ease the industrial gas crisis, BKMEA Executive President Hatem suggested the government import an adequate amount of liquefied natural gas (LNG) urgently.

Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA), said the crisis has hit a critical level.

“Many units are unable to run. The past week has been especially severe. We have written to the government several times, but there has been no resolution,” he added.

On average, a spinning mill is losing Tk 25 lakh per day, according to BTMA estimates.

Nearly 500 spinning mills are affiliated with the association, and many fear they will be forced to shut down if the situation does not improve.

Meanwhile, industry leaders said this crisis is the latest in a series of shocks over the past couple of years.

The sector has barely recovered from the fallout of Covid-19, the Russia-Ukraine war, currency volatility, and global inflation, and now faces uncertainty from Trump-era tariff policies.

The situation is complicated by the volatile exchange rate and steep depreciation of the local currency Taka.

Two years ago, the US dollar was at Tk 85, while it now stands at Tk 122, squeezing importers of cotton and machinery and leaving many starved of working capital.

“Entrepreneurs are running out of working capital,” said Russell. “These repeated blows, both at home and abroad, have left us in a fragile state.”