Bangladesh revises export subsidy rates

This revision comes two weeks after the initial issuance of the circular on cash incentives withdrawal.

The updated notification, released recently, reinstates Australia, India, and Japan as new markets eligible for a 3 per cent cash incentive.

In the previous circular dated January 30, these markets were categorised under the traditional market, offering only a 0.5 per cent cash incentive.

Additionally, the effective date of the incentives has been revised to February 1, contrasting with the previous period from January 1 to June 30, 2024, as specified in the circular issued on January 30.

The amended circular also extends cash incentives to certain apparel items that were previously excluded, which include men’s/boys’ knitted or crochet shirts, knitted or crochet briefs, T-shirts, singlets, vests, jerseys, pullovers, cardigans, as well as men’s or boys’ suits, ensembles, jackets, blazers, trousers, and related articles.

Data from Bangladesh Garment Manufacturers and Exporters Association (BGMEA) indicates products falling under five harmonised system (HS) codes contributed significantly to exports, amounting to $25.95 billion in the last fiscal (FY23).

These products accounted for 46.71 per cent of the total export figure and 55.22 per cent of total apparel exports.

The government’s earlier circular on January 30 outlined a comprehensive plan to gradually reduce export subsidies for all goods, aligning with the nation’s impending graduation from Least Developed Country (LDC) status in 2026.

Meanwhile, official government data revealed a substantial portion, approximately 65 per cent of these cash incentives, totalling nearly Taka 5,000 crore, primarily benefitting the garments and textiles industry.

ALCHEMPro News Desk (DR)