NBR seizes 520 cartons of bonded yarn in Narsingdi, Narayanganj

BTMA calls for investigation into suspected diversion of bonded warehouse imports to the domestic market

Concerns are rising in Bangladesh's primary textile sector after a large quantity of high-value yarn allegedly imported under duty-free bonded warehouse facilities is seized in Narayanganj and Narsingdi. The industry group says the case points to possible diversion of duty-exempt raw materials into the domestic market, a practice that can erode government revenue and pressure local manufacturers.

Local law enforcement agencies and National Board of Revenue (NBR) officials have seized around 400 sacks of suspected duty-evaded yarn, valued at Tk 4–5 crore, from a warehouse in Narayanganj’s Araihazar upazila, amid allegations that duty-free imports intended for export-oriented garment factories were being diverted to the domestic market.

The seizure was made on Saturday (3 October) during a raid on a warehouse at Haji Abdus Salam Market in Purinda village under Satgram union.

Narayanganj Superintendent of Police Md Habibur Rahman confirmed the operation to reporters, saying it followed an earlier seizure in Madhabdi, Narsingdi, where customs officials intercepted a vehicle carrying illegally diverted bonded yarn and seized 20 cartons.

Information obtained from the vehicle led the authorities to the warehouse in Araihazar, he said.

“Customs authorities conducted the operation while police provided security support. Customs will take necessary legal action regarding the seized goods,” Habibur Rahman said.

The seized cartons bore the labels “China Origin” and “CM80S/1”. The yarn was reportedly imported duty-free under the bonded warehouse facility for use by export-oriented garment manufacturers.

Under the system, eligible industries can import raw materials without paying applicable customs duties and taxes, subject to conditions governing their use in export production. Diverting such materials to the domestic market may result in revenue losses for the government and give non-compliant businesses an unfair competitive advantage over manufacturers that pay duties and taxes.

The Bangladesh Textile Mills Association (BTMA) has called for a comprehensive investigation to identify the importer and other parties involved in the suspected diversion.

BTMA Director Mohammad Khorshed Alam said 520 cartons of yarn had been seized so far. However, a VAT official involved in the operation said the exact quantity would be confirmed after the final count.

The discrepancy between the reported quantities could not immediately be reconciled.

In a statement, the BTMA said footage from the operation showed large quantities of yarn stored in warehouses, along with discussions between people concerned and law enforcement officials.

The association alleged that unauthorised storage and marketing of bonded yarn and other raw materials were occurring in several industrial areas, including Narsingdi, Narayanganj and Sirajganj.

“Stronger investigations, risk-based monitoring and warehouse-level verification could uncover further information about such irregularities,” the BTMA said.

BTMA seeks audit of bonded imports

BTMA President Showkat Aziz Russell condemned the alleged malpractice, saying the diversion of duty-free raw materials to the domestic market deprived the government of revenue and exposed duty-paying domestic manufacturers to unfair competition.

He urged the authorities to trace the importer and supplier, examine the import clearance process and establish how the seized goods were transported and stored under the bonded warehouse facility.

Russell also called for the importer's bond ledgers to be audited against actual production and export records to identify possible discrepancies and establish whether the facility had been misused.

The association said it was monitoring similar alleged irregularities in other industrial areas, including Sirajganj, and called for stronger oversight of bonded warehouse operations.

The authorities have yet to publicly establish the ownership of the seized yarn or confirm whether the goods were unlawfully diverted to the domestic market. The allegations are subject to investigation.