The government's decision of further reducing the export incentives will badly hurt the $22 billion invested on the domestic textile sector, which has been working as the main backward linkage integration for the garment industry, a leader of Bangladesh Textile Mills Association (BTMA) said today.

The primary textile sector will lose its competitiveness in the international markets due to the gradual decline of the incentive on export receipts, BTMA President Mohammad Ali Khokon said at a press conference at the association's office in Dhaka.

Rather, the government needs to formulate a long-term roadmap for the textile and garment sector so that the domestic industry can survive and grow well even after graduating from the least-developed country (LDC) category as other competing countries have already devised such plans and working well, he said.

For instance, India has graduated to a developing country from the group of LDC in 2004 and still have been giving a lot of incentives for the growth of textile and garment sectors as alternatives to the direct cash subsidies.

As a result, currently, the difference in the cost of production of a kilogramme of 30-count yarn between Bangladesh and India is 22 cents as the Indian yarn manufacturers are given such financial benefit in different ways despite being a developing nation.

Unfortunately, India is more competitive in production of yarn than Bangladesh. Of the total demand for yarn in Bangladesh, 13 percent comes from India every year.