July 17, 2024, 4:15 pm

Staff Correspondent

2024-07-01 13:04:45 BdST

43 products, sectors to get export incentives

Bangladesh Bank said 43 products or sectors should be eligible for receiving the government’s incentive or cash assistance against export earnings in the new fiscal year of 2024-25.

Exporters would receive cash incentive or assistance at the rate of 1-10%, according to a central bank circular issued on Sunday.

The circular said, “It has been decided to offer incentives or cash assistance for exports of products which would be shipped between 1 July, 2024 and 30 June, 2025 with a view to encouraging exports.”

According to the Bangladesh Bank, the cash incentives for vegetables, fruits, and processed agricultural products, diversified jute products, 100% halal meat and halal meat products, accumulator batteries, leather products, potato peels, and active pharmaceutical ingredients (API) supply, seeds of crops and vegetables will be provided with a 10% incentive.

Besides, the incentive or cash assistance will be offered for entities located in specialised zones like Bangladesh Economic Zones Authority, Bangladesh Export Processing Zones Authority and Hi-Tech Parks.

Type ‘A’ and type ‘B’ industries in the specialised zones will be eligible for receiving incentive at 2% against exports of agro-processing products.

All types of industries operating in the specialised zones will be given 0.30% incentive against exports of the other products.

Outside of this, in place of bond and duty drawbacks in the indigenous apparel sector, additional facilities of cash assistance and export incentives have been included in all small and medium industries such as the net, woven, and sweater segments get 3%.

In the case of new products or new market expansions, assistance will be provided at a rate of 3%. Bangladesh Bank said that an additional 1% special cash assistance for the readymade garment would remain valid in FY 2024-25. 

Pharmaceutical products with instruments and appliances, photovoltaic modules, motorcycles, ceramic products, galvanised sheet/coils (coated with zinc, coated with aluminium and zinc and colour coated) get incentives.

Consumer electronics, home and kitchen appliances and finished and crust leather, plastic products, software, information technology enabled services (ITES) get 6% incentive.

In a strategic move aimed at aligning with its impending graduation from the Least Developed Country (LDC) status in 2026, Bangladesh has announced a comprehensive plan to curtail incentives across all export items.

In FY 2023-24, the government gave incentives for 43 sectors. As per the World Trade Organisation (WTO) Rules, these cash incentives are considered as subsidies contingent upon export performance.

According to the Agreement on Subsidies and Countervailing Measures (ASCM), no subsidy or cash incentives will be allowed after graduation from the LDC status. If incentive is withdrawn from all sectors after LDC graduation, the export sector will likely face challenges, people concerned suggest. For this reason, the government revised the cash incentive or the export subsidy.

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