In a letter to the commerce minister Tipu Munshi, the Bangladesh Textile Mills Association (BTMA) made the request after the ministry backed a demand by RMG manufacturers that they be provided 5 per cent cash incentive on exports of non-cotton apparel items.

The commerce ministry then wrote to the finance ministry regarding the issue.

"Larger share of exports of non-cotton RMG items is made using the imported fabrics and thus little value addition takes place, resulting in low foreign currency retention against exports," BTMA president Mohammad Ali Khokon wrote in the letter.

As global demand for MMF garments rises, BTMA member firms are producing viscose, polyester, various filament yarn and blended yarn using imported MMF and making 'deemed exports' to local RMG exporters, he said.

Several mills to produce MMF and its raw material PET chips are also being set up in the country to meet local MMF requirement, he said, hoping that these units will start production by the end of next year, according to Bangladeshi media reports.

Khokon urged the government to provide a 5 per cent additional cash incentive on exports of RMG produced from MMF, considering the three stages of production—yarn from MMF, fabric from yarn and then RMG production.

BTMA said around 0.15 million tonnes of MMF were imported in the last fiscal.

Fibre2Fashion News Desk (DS)