With the traditional wasteful models of production being replaced by circular and sustainable ones in different industries across the globe, the apparel sector cannot stay behind. In fact, the world-famous clothing companies and fashion brands like H&M, Adidas, Ever Lane, Buffy, Girlfriend Collective, Nike, Aday, etc., have been increasingly switching to recycled fabrics. The European Union (EU), a major destination of Bangladesh's apparel products, is also going to make it mandatory from 2025 that 30 per cent of the clothing it imports should be made of recycled fabrics. Against this backdrop, what is the state of preparedness of the apparel sector in Bangladesh?
Reports have it that, annually, Bangladesh's apparel sector produces about 570,000 tonnes of textile waste, also called jhut, locally. By recycling this waste into fibre and reusing the same in the textile industry, Bangladesh reportedly can save on the import of virgin cotton to the tune of one billion US dollars (USD) annually. The international buyers of Bangladesh-origin garment products are also learnt to be attaching the mandatory condition of using recycled fibre, for instance, recycled polyester or other manmade fibres in place of virgin cotton in their textile products. But despite the huge potential of this emerging sector of recycled fabrics globally, appropriate policies are yet to be in place in Bangladesh to grab the opportunity. In fact, the local recycled fibre production mills have to pay a 7.5 per cent VAT while collecting the textile waste or jhut raw material for their industry. Again, 15 per cent VAT is levied on them when they supply the recycled fibre to the local spinning mills. But this growing 100 per cent export-oriented backward linkage industrial sector merits government support. Seeing that the use of recycled fibre in apparel products from Bangladeshi exporters has been made obligatory in the new laws of the Western markets, the government should fast-track framing policies to incentivise the sector.
Notably, at present, some 23 local mills have the annual capacity of producing 220,000 tonnes of recycled fibre. In addition to this, of the 330 spinning mills producing yarns, 61 are able to manufacture Global Recycle Standard (GRS)-certified yarn. Also 14 more such spinning mills are reportedly in the process of getting GRS certification. Evidently, the quantity of textile waste or jhut generated by the local RMG industry, if processed, is not enough to meet the rising demand for recycled fabrics from buyers. So, it is hardly surprising that recently the textile waste recycling mills urged the government to form an HS code as well as provide them with duty-free facilities for importing textile waste and mutilated garments.
The good news is that the Bangladesh Trade and Tariff Commission (BTTC) has looked into the issue and come up with recommendations to arrange fiscal measures in the upcoming budget and remove the tax-related barriers to the growth of textile waste, especially cotton-fibre, for recycling sector. Also, it suggested introducing tariff for the VAT-registered textile waste fabric recycling industry. In a similar vein, the BTTC recommended classifying the products with new Harmonized System (HS) code styled 'Recycle Cotton Fibre'. Most importantly, it suggested banning any export of jhut (textile, or cotton waste) to meet the demand of the local recycled fibre industry. Given its inexhaustible potential, the government should provide generous fiscal support so that the emerging textile waste recycling sector can draw more private investment, both local and foreign.