The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has described the current period as the most critical in the history of the country's apparel industry, citing a sustained negative growth trend in exports for the first time.

In its formal budget proposals for the 2026-27 fiscal, submitted to the National Board of Revenue (NBR) today (Sunday), the association revealed that knitwear export earnings plummeted by 6.42 percent in March 2026 compared to the previous year.

BKMEA President Mohammad Hatem said this while placing a budget proposal to the National Board of Revenue (NBR) on behalf of the association, in a formal meeting with the revenue board, held at NBR Building in Agargaon.

NBR Chairman Abdur Rahman Khan chaired the event. NBR members Azizur Rahman, Mobinul Kabir and Barrister Mutasim Billah Faruki were present at the meeting. Fazle Shamim Ehsan, Executive President, BKMEA was also present.

BKMEA President Mohammad Hatem noted that since August 2025, export earnings have remained on a consistent downward trajectory due to global geopolitical instability, rising shipping risks, and domestic structural challenges.

The proposal highlights a sharp rise in "fixed costs" for factories as they are forced to operate well below their production capacity. The association pointed out that while the cost of electricity, gas, and labor has increased significantly, the "unit value" or price offered by international buyers has actually decreased.

Hatem also proposed a duty free import facilities of solar panels and solar energy storage system for industrial smooth production to face loadshedding.

To prevent further factory closures and maintain international competitiveness, BKMEA placed several strategic demands:

i) The association urged the government to reduce the source tax on exports from 1 percent to 0.5 percent and treat it as the final tax liability for at least the next five years.

ii) BKMEA proposed a uniform 10% corporate tax rate for all export-oriented industries to ensure a level playing field.

iii) A request was made to exempt the 10 percent income tax currently imposed on cash incentives provided by the government.

iv) The trade body sought a total waiver of the 1 percent import duty on capital machinery and spare parts, arguing that modernization is essential for survival.

v) To promote a "circular economy," the BKMEA proposed withdrawing all VAT and Advance Tax (AT) on the collection and supply of textile waste (jhut) and recycled fibers.

The BKMEA emphasized that these proposals are not merely requests for "tax breaks" but are strategic necessities to keep the industry afloat. The association warned that without timely policy intervention, the sector's ability to achieve national export targets and maintain employment for millions of workers would be severely compromised.

"This is the first time in our history we are seeing such a prolonged negative growth trend," the BKMEA President Mohammad Hatem stated in the proposal.

"The timely decisions of the NBR will determine whether this industry can overcome the current crisis and continue to contribute to the national economy," he added.