Business-friendly trade policy in the offing

The government is formulating a new import policy order (IPO) for the next three years adding to it a set of new sections to facilitate the Ease of Doing Business.

The proposed policy is said to be increasing transaction time, value and hence the volume of Letters of Credit (L/Cs); plus it will reduce different fees relating to import registration, according to the commerce ministry officials.

The ministry termed the upcoming IPO for the year of 2021-24 a pathway to modernise the existing import rules, so the Ease of Doing Business index could be enhanced.

The new IPO is likely to bring in opportunities for businesses, with many changes being made to the existing policy to pave the way for business in the private sector.

In particular, the opportunity to import without a letter of credit has been included in the draft policy.

A series of changes are being made in the interest of increasing trade with different countries.

The views of businessmen and related government wings have been taken into consideration before finalising the draft policy. Now the draft IPO will be sent to the cabinet for final approval.

The policy will have penalty provisions for any international fraud—like over-invoicing, under-invoicing and misdeclaration — and an increased tenure of import licence from one year to five years.

A recent International Trade Centre (ITC) study says about 53 percent importers in Bangladesh face non-tariff barriers while importing raw materials and consumer items into Bangladesh. The new IPO is expected to lessen the existing intricacies to a large extent.

The proposed import order has increased the duration for raw materials import under the bonded warehouse facility from the current four months to six months.

Under the same bonded facility, apparel exporters and textile millers will be allowed to import raw materials up to 50 per cent of an industrialist’s capacity replacing the current 33 per cent, says the proposed policy.

As per the draft IPO, there are no bindings for opening an LC with a certain bank. Any client can approach any banks as per their desires.

In line with the new draft IPO, an individual can import goods worth $10,000 without registration which is $7000 in the existing policy. Without permission sample, the import of advertisement instrument and gift items is limited to $10,000 which is Tk 3 lakh in the current policy.

If the export value of a dozen apparel goods is $60, the value addition must be 20 per cent, and if the export value is above $60, the value addition should be 10 per cent.

The value addition of all exportable children’s clothing items is needed to be 15 per cent.

The draft IPO allows the import of aircraft, helicopter and their parts—both new and old ones—with the permission from the Civil Aviation Authority.

In the current policy, such provision is missing.

Besides, the draft policy also paves the way for import of edible salt, provided that the Ministry of Industries gives the go-ahead.

In addition, the policy says Bangladeshi diplomats working abroad will be able to import five-year old used vehicles should the vehicles not cross an eight-year life span.

The new IPO, however, prohibits sourcing products that include casino items and other equipment used in gambling.