"All necessary steps will be taken to reopen the land port as soon as possible to facilitate the growing [knitwear] sector," she said at the inaugural ceremony of the second Bangladesh Knitwear Exposition 2005 at Dhaka Sheraton hotel.

The prime minister's announcement came as a relief to the apparel exporters who have been demanding reopening of the land port for import of yarn from India.

The government banned yarn import through Benapole land port in March 2001 to prevent unscrupulous businessmen from importing or smuggling yarn by taking advantage of inadequate infrastructure facility at the land port.

In an instant reaction, Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) and Bangladesh Garment Manufacturers and Exporters Association (BGMEA) welcomed the government decision.

The prime minister who inaugurated the three-day fair organised by BKMEA said knitwear sector is becoming one of the main foreign exchange earners of the country.

One-third of the total export earnings comes from the knitwear sector, she added.

The prime minister said the government is ready to meet all logical demands of the entrepreneurs to promote local industries, but the businessmen should pay taxes regularly and in due time as part of their social responsibility.

She urged the apparel exporters to maximise the use of the opportunities of duty-free access given by EU, Canada, Australia, Norway and New Zealand.

Khaleda also asked the business community to utilise tariff facilitates offered by Thailand, India and China, and take the GSP (generalised system of preferences) offer recently given by Russia to Bangladesh.

Exporters have to diversify export products and maintain international standard to boost exports under these facilities in different markets of the world, she suggested.

Addressing the function Finance Minister M Saifur Rahman also said Benapole land port should be reopened for supporting knitwear sector.

"We have taken a lot of initiatives to resolve the problems of yarn pricing in the local market," he observed and said spinning mills have to reduce yarn prices following international market. "They are doing injustice by charging high price."

"Time has come to allow import of yarn through Benapole land port," he said adding that World Bank (WB) also recommended reopening of the port.

The government will release maximum amount of cash incentives to knitwear exporters before the Eid-ul-Azha, the finance minister said responding to the demands of BKMEA. But he said: "I will stop all kinds of subsidy from next year."

BGMEA WELCOMES DECISION
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) welcomed the government decision, saying the resumption of yarn import under back-to-back LC (letter of credit) through Benapole port would help flourish the apparel industry.

"This will accelerate the growth of knitwear industry and expand the market especially in the European Union and the United States," BGMEA said in a statement.

BTMA REACTION
Bangladesh Textile Mills Association (BTMA) President MA Awal yesterday told The Daily Star that most of the local textile industries will close down if government implements the decision to allow yarn import through Benapole port.

He refuted the BKMEA claim of high yarn price and urged the prime minister and the finance minister to constitute a committee immediately to verify to what extent yarn prices have increased in the local market compared to the international market.

"We contribute to the national economy by operating 210 textile mills. We should encourage local industries...I don't understand why we should import yarn from India."

Awal said the local textile mills have made great contributions to the increase of knitwear exports in the world market by supplying 75 percent yarns.