United News of Bangladesh

Bangladesh's trade policy has long operated as a contradictory mix of export promotion and import protectionism, with its average tariff burden of 28 percent far exceeding the global average of 6 percent and even surpassing peer lower-middle income countries at 7.2 percent, a leading economist said Monday. Zaidi Sattar, Chairman of the Policy Research Institute of Bangladesh (PRI), made the observations while delivering the keynote address at a roundtable titled “Trade Policy, Industrial Protection, Investment Impacts, and Consumer Welfare,” organised by PRI's Center for Trade Policy and Protection Research (CTPPR) with support from the Foreign, Commonwealth and Development Office (FCDO). Restaurant owners demand tax cuts, gas connections ahead of budget The event was held at the PRI Conference Room in the capital. Sattar described Bangladesh's current trade policy as “a hotchpotch” of outward-looking and inward-looking approaches without clear direction, resulting in export success confined almost entirely to readymade garments, which account for 84 percent of total exports, while non-RMG export diversification has remained largely stagnant. He said the RMG sector effectively operates within a free trade enclave, while most other industries face a complex, multi-layered tariff regime comprising customs duties, regulatory duties, supplementary duties, VAT, advance income tax and other para-tariffs, pushing the nominal protection rate (NPR) to around 27.9 percent in FY26. Presenting historical data, Sattar noted that while average customs duties fell sharply from 70.6 percent in FY92 to around 13-14 percent in recent years, the gains were offset by the steady rise of para-tariffs, from 2.6 percent in FY92 to 13.2 percent in FY26, leaving effective protection largely unchanged over two decades. He described the persistent gap between output tariffs and input tariffs as a “crocodile tariff” structure, with output tariffs consistently running more than double the rate applied to inputs, entrenching protection for domestic producers at the expense of export competitiveness. Data showed that nearly 1,677 tariff lines, representing 99.8 percent of cases, carry supplementary duty rates on imports that exceed those applied domestically, a mechanism the PRI characterises as de facto industrial protection disguised within the revenue framework. Sattar argued that the primary barrier to export diversification is not a lack of competitiveness, but a policy-induced anti-export bias embedded in the tariff structure. PRI research covering 1,377 non-RMG product categories found that 39 percent are highly competitive globally, with an average anti-export bias (AEB) ratio of 1.303,  meaning the policy environment systematically favours domestic sales over exporting. “With all the subsidies and support applied to exports, these are no match to the high protection subsidy through tariffs to import-substitute production,” Sattar said. He added that the 30-40 percent depreciation of the taka between FY2022 and FY2025 further compounded the effective tariff burden, as exchange rate depreciation is economically equivalent to an increase in import duties. On foreign direct investment, Sattar said Bangladesh continues to attract only around 1 percent of GDP in FDI inflows, a fraction of the 4-6 percent of GDP achieved by Vietnam and Thailand, because export-oriented, efficiency-seeking investment gravitates toward open, predictable and trade-neutral regimes, conditions Bangladesh currently fails to meet. Turning to consumer welfare, Sattar said the protection regime effectively functions as a hidden tax on ordinary Bangladeshis. PRI research estimates that consumers pay 50 to 100 percent above world prices for most goods, whether imported or domestically produced, with the total protection cost to consumers estimated at 6.3 percent of GDP in FY20. He cited the IMF's purchasing power parity data to illustrate the price-level problem: while Bangladesh is projected to marginally overtake India in nominal per capita GDP in 2026, India's PPP-adjusted per capita income stands 15 percent higher at $11,789 against Bangladesh's $10,271, a gap the IMF projects will widen to 24 percent by 2031. Sattar invoked economist Mancur Olson's theory of collective action to explain why reform has proved difficult: producer associations lobby effectively for protection, while consumers large, diffuse and poorly organised, bear the costs in silence. “Restrictive trade and import regime restricts consumer choice, raises prices, and undermines consumer welfare,” Sattar said, calling on the government to strike a balance between protection incentives for producers and the mounting costs imposed on consumers.

Bangladesh Bank has directed all commercial banks to set up dedicated counterfeit currency detection booths at cattle markets across the country to ensure the security of large-scale cash transactions during the upcoming Eid-ul-Azha. The central bank issued a circular in this regard recently asking banks to deploy note-counting and currency authentication machines to prevent the circulation of fake notes during the peak sacrificial animal trading period. According to the directive, each commercial bank must appoint a focal coordinating officer for the operation and submit their names, designations and contact details to Bangladesh Bank by May 17. For cattle markets in Dhaka North and South City Corporations, specific banks have been assigned individual markets to operate booths until the night before Eid. Outside Dhaka, Bangladesh Bank’s regional offices will coordinate the arrangement, while Sonali Bank will lead coordination in districts where the central bank has no branch presence. The circular also instructed that the booths must provide uninterrupted service throughout the trading period up to Eid night. Banks have been asked to maintain close coordination with local administrations, city corporations, municipalities and law enforcement agencies to ensure smooth operations and security. In Dhaka North, banks including Islami Bank, Shimanto Bank, AB Bank, National Bank, Al-Arafah Islami Bank, Eastern Bank, IFIC Bank, Meghna Bank, United Commercial Bank, City Bank, Agrani Bank, BRAC Bank, Dutch-Bangla Bank, Bank Asia, Jamuna Bank, Shahjalal Islami Bank and BASIC Bank have been assigned responsibilities. In Dhaka South, 19 banksincluding Premier Bank, Uttara Bank, Dutch-Bangla Bank, Bangladesh Krishi Bank, Dhaka Bank, Rupali Bank, Janata Bank, One Bank, Modhumoti Bank, Community Bank, Pubali Bank, Mercantile Bank, NCC Bank and Sonali Bank—have been deployed to operate detection booths across 13 designated cattle markets. Central bank officials said the initiative is aimed at safeguarding financial transactions during the festive season and ensuring confidence among buyers and sellers in a cash-intensive market.  

The government is undertaking a series of measures to ensure transparency, accountability and effective oversight in the country's essential commodities market, Commerce Minister Khandakar Abdul Muktadir said Monday. The government has initiated strategic reserve building, AI-powered supply chain monitoring and enhanced TCB capacity to prevent any form of syndication or market manipulation in the daily commodities sector, said the minister at the inauguration of the Trading Corporation of Bangladesh's (TCB) truck sale programme ahead of Eid-ul-Azha at Agargaon in the captial. No scope to hike essentials’ prices citing fuel costs: Commerce Minister “No syndicate or market manipulation will be allowed to take hold in the essential commodities market. Strategic reserves, artificial intelligence-based supply chain surveillance and a stronger TCB are our instruments to ensure that,” the minister said. He said the government's primary goal is to ensure subsidised essential food items reach low-income, lower-middle-income and marginalised communities across the country. TCB regularly sells goods at subsidised rates nationwide, with special truck sale drives during major festivals. Muktadir said approximately 2.28 crore beneficiaries received subsidised food during the last Ramadan, a figure now being expanded to about 2.88 crore. Similarly, food supply through TCB during last year's Eid-ul-Azha stood at around 10,900 tonnes, which has been raised to approximately 14,000 tonnes this year, an increase of nearly 40 percent. “Whenever there is an unusual market situation, a festival or abnormal price pressure, the government will activate TCB truck sales as needed. We are always prepared to ensure food security for people,” he said. On beneficiary verification, the minister disclosed that around 59 lakh of the one crore beneficiaries on the previous list were found to be questionable. Following thorough verification, 80 lakh genuine beneficiaries have been selected through a transparent process, with a further 20 lakh families to be included in phases. He added that new policies are being formulated to ensure transparency in TCB dealer appointments. “TCB is being transformed into a fully unquestionable, accountable and technology-driven institution.” He also expressed the government's intent to build a broader, partnership-based market ecosystem that allows more entrepreneurs to participate in the essential commodities sector and fosters healthy competition. “This government is firmly committed to establishing effective market oversight and control in the interest of the people. Our goal is a market that is transparent, stable and free from manipulation.” Commerce Secretary (Current Charge) Md Abdur Rahim Khan spoke as a special guest, while TCB Chairman Brigadier General Mohammad Faisal Azad delivered the welcome address. The minister formally opened the truck sale drive by selling TCB products to buyers at fair prices.

Oil prices climbed after US President Donald Trump dismissed Iran’s reply to Washington’s peace proposal as “totally unacceptable,” raising concerns over prolonged tensions. Brent crude, the global benchmark, rose 2.69 percent to $104.01 per barrel by 23:36 GMT on Sunday, building on a 1.23 percent gain recorded on Friday. Meanwhile, US West Texas Intermediate crude increased by $3.09, or 3.24 percent, to $98.51 per barrel, following a 0.64 percent rise in the previous session. Netanyahu says Iran war is ‘not over’; Trump rejects Tehran proposal In the Gulf, Kuwait and the United Arab Emirates reported detecting multiple drones in their airspace, while Qatar said a commercial cargo vessel was targeted by a drone within its territorial waters. Iran’s military issued a fresh warning to the United States and Israel, stating that any renewed “aggression” would trigger “other surprising options.” At the same time, Israeli strikes in Lebanon continued, with Hezbollah claiming additional attacks on Israeli forces. Two medics and a civilian were killed in an Israeli strike on emergency response centres in Bint Jbeil. Source: Al Jazeera

In a significant shift in global trade dynamics, Bangladesh has overtaken China to become the second-largest apparel exporter to the United States in the first quarter of 2026. The shift comes as steep "counter-tariffs" imposed by the Trump administration have gutted China’s market share, even as global demand remains sluggish. According to data from the Office of Textiles and Apparel (OTEXA), US apparel imports from the world fell by 11.63 percent to $17.73 billion during the January-March 2026 period. While nearly all major manufacturing hubs recorded negative growth, the scale of China’s collapse has allowed Bangladesh to climb the rankings despite its own moderate decline in earnings. The Tariff Impact: China vs. Bangladesh The reshuffling of the leaderboard is largely attributed to a series of aggressive trade policies. While Bangladesh’s exports to the US fell by 8.38 percent to $2.04 billion in the first quarter, China’s exports plummeted by a staggering 52.91 percent, falling to just $1.69 billion. Industry analysts note that this is a direct consequence of the reciprocal tariffs initiated in April 2025. While China faces massive hurdles, Bangladesh secured a strategic trade agreement on February 9, 2026, which reduced its specific counter-tariff rate to 19 percent. However, the legal landscape remains volatile. Following a February Supreme Court ruling that declared certain emergency tariffs illegal, the US administration applied a new 10 percent duty under the 1974 Trade Act. Just this past week, the US Court of International Trade issued a stay on these duties for specific importers, adding a layer of uncertainty for global buyers. Vietnam Maintains Dominance Despite the shifts between Bangladesh and China, Vietnam continues to hold the top spot. It was the only country among the top five suppliers to post positive growth, with its exports rising 2.77 percent to $3.98 billion. Vietnam now commands 22 percent of the US apparel market share, compared to Bangladesh’s 11.5 percent. Comparative Regional Performance (Jan-Mar 2026):  

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and  German development agency GIZ have signed an agreement to accelerate sustainability, green industrialisation, and digital transparency within the country’s Ready-Made Garment (RMG) sector. A partnership agreement was signed with an 11-point charter of demands and a strategic cooperation framework at a ceremony held today (Sunday) at the BGMEA Complex in the capital. The initiative aims to help the sector navigate mounting global economic pressures and comply with evolving international trade regulations. Under the agreement, both parties will collaborate on enhancing the environmental standards of Bangladeshi factories. Key focus areas include promoting LEED-certified production and reducing the carbon footprint of the apparel industry, addressing the ongoing energy crisis by promoting renewable energy adoption and improving resource management within factories, implementing better waste management and recycling practices to align with global circular fashion trends. A significant portion of the partnership involves the digitalisation of sector monitoring. This includes the implementation of digital audits for national tax returns and the selection of over 87,000 taxpayers for tech-based transparency checks. The project will also focus on a "one-stop service" model for licenses and permits to reduce the time and complexity currently faced by factory owners.

Restaurant owners  in Bangladesh have urged the government to reduce Value-Added Tax (VAT), resume new pipeline gas connections  and end ‘bureaucratic harassment’ by regulatory agencies to protect the industry from mounting economic instability. Bangladesh Restaurant Owners Association (BROA) made the demand at a press conference held at Dhaka Reporters Unity (DRU) on Sunday, ahead of the national budget for the fiscal year 2026-27. The association also placed an 11-point demand  including maintaining VAT and tax rates at ‘tolerable levels’ and introducing a one-stop service for licenses and permits. While the VAT on the sector was previously reduced from 15 percent to 5 percent following discussions with the National Board of Revenue (NBR), leaders claimed they are still struggling under a 10 percent supplementary duty, source taxes, and various other levies. They called for a flat 5 percent VAT rate for canteens and catering services and the total withdrawal of source taxes. "High tax rates discourage compliance and lead to evasion," said BROA Secretary General Imran Hasan. "Reducing rates while expanding the tax net would ultimately increase government revenue." Hasan noted that the industry has yet to fully recover from the Covid-19 pandemic, with global instability and rising fuel costs further inflating operational expenses. "The uncontrolled rise in commodity prices has pushed essential goods beyond consumers' purchasing power. Its direct and severe impact is now being felt across the restaurant sector," Hasan added. The association also highlighted the energy crisis, noting that a shortage of Liquefied Petroleum Gas (LPG) has disrupted operations. They urged the government to increase LPG imports and restart new pipeline gas connections to stabilise food prices. The association also hit out at regulatory bodies including Rajuk, the Fire Service, and the Department of Environment accusing them of creating ‘bureaucratic complications’ and unnecessary pressure. According to BROA, opening a restaurant currently requires 10 to 12 different approvals, a process that can take up to six months. Hasan argued that these hurdles are forcing many into ‘systematic’ non-compliance. Other key demands include reopening trade license services under the two Dhaka city corporations, permitting beef imports to lower costs, preventing ‘corporate aggression’ within the sector, and launching government-supported training programs for unskilled workers. The association also revealed that approximately 80 percent of restaurants in the country remain unregistered, often operating without proper hygiene standards or tax contributions.  

Once regarded as an exclusive financial tool for the elite and high-net-worth travelers, credit cards have rapidly transitioned into an essential daily companion for the middle-class and younger generation in Bangladesh. From grocery shopping and hospital bills to online purchases and utility payments, the credit card is increasingly being viewed as a "digital alternative to cash" within the country's burgeoning digital economy. In response to this growing demand, Bangladesh Bank has significantly overhauled credit card regulations. Under the new policy, the borrowing limit for credit cards has been doubled: Unsecured Loans: The limit for loans without collateral has been increased to Tk 20 lakh from the previous Tk 10 lakh. Secured Loans: Against collateral, the limit has been raised to Tk 40 lakh from Tk 20 lakh. Financial analysts suggest this move will provide a crucial cushion for high-cost medical emergencies, foreign education expenses, and business travel while further accelerating the nation’s "cashless" ambitions. One of the primary drivers of credit card popularity among salaried professionals and young entrepreneurs is the 45-day grace period. If the total bill is settled within this timeframe, the cardholder essentially enjoys a short-term, interest-free loan. Industry data underscores this shift: Active Cards: There are currently approximately 54 lakh credit cards in use in Bangladesh. Transaction Volume: Monthly credit card transactions are averaging over Tk 3,000 crore, with recent figures exceeding Tk 3,500 crore. Spending Patterns: Domestically, the highest spending occurs at department stores, supershops, and retail outlets, followed by utility bills and healthcare.   The use of dual-currency cards is also surging internationally. Interestingly, Bangladeshi debit cards are seeing the highest transaction volumes in the United Kingdom, largely driven by the high number of Bangladeshi students residing there. To combat the rising risk of digital fraud, banks are introducing cutting-edge security: Numberless Cards: Institutions like Prime Bank and Mastercard have launched "numberless" cards where CVV and expiry details are hidden from the physical card and stored only in mobile apps. Regulatory Safeguards: Bangladesh Bank now mandates 24-hour helplines for reporting lost cards and has strictly prohibited the harassment of customers during loan recovery. Diversification: Islamic and Student Cards The market is also diversifying to cater to specific demographics. Shariah-based Islamic credit cards, which utilize a service charge (Ujrah) instead of conventional interest, are gaining traction among the youth. Furthermore, specialized products like Student Credit Cards (often backed by parental guarantees) and Freelancer Cards for international software and subscription payments are becoming widely available. Despite the benefits, financial experts warn that unplanned usage can lead to a debt trap. Relying on "minimum payments" can cause high interest rates to compound rapidly. Industry experts advise cardholders to strictly adhere to payment schedules and maintain digital hygiene—such as never sharing OTPs or PINs—to ensure the credit card remains a tool for convenience rather than a financial burden.

Industries Minister Khandker Abdul Muktadir has said that more industrial establishments will be set up across the country to create employment opportunities and reduce unemployment. He made the remarks on Saturday morning while inspecting the Thakurgaon BSCIC Food Processing Industrial Estate, adding that a large industrial park is being developed in the district to accelerate industrialisation and generate jobs for around 25,000 people. “Unemployment must be reduced through job creation. With that goal, new factories and investment are being encouraged. A new industrial park is being constructed on around 50 acres of land in Thakurgaon, where 251 plots will be available for industrial use. Entrepreneurs may take two, three or even four plots to establish industries,” the minister said. He also said initiatives are being taken in coordination with the Ministry of Agriculture to develop export-oriented agricultural production in Thakurgaon. Special emphasis will be given to potato-based industries, as although the country produces a large quantity of potatoes, there is a shortage of export-quality varieties. Efforts will be made to develop new exportable potato varieties, he added. The minister further said that an EPZ is already operating in Thakurgaon, where entrepreneurs are running their businesses. The new BSCIC industrial estate will focus on food processing industries, and several investors have already expressed interest in setting up factories there. Thakurgaon Deputy Commissioner (DC)  Mohammad Rafiqul Haque, BSCIC industrial estate entrepreneurs, and local BNP leaders were present during the visit. Later, the minister also inspected various factories at the old BSCIC industrial estate in Thakurgaon before leaving for Panchagarh.  

Bangladesh must urgently modernise its port infrastructure, overhaul trade facilitation systems and activate its dormant National Logistics Policy to remain competitive in global markets, a leading policy economist said on Saturday. M. Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, made the observations while presenting a keynote paper titled ‘Integrated Port and Logistics Development for a Trade-Driven Bangladesh’ at a roundtable organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its Chamber Auditorium in Motijheel. DCCI pushes for lower taxes, digitalisation in FY27 budget recommendations Drawing on comparative data, Dr. Reaz warned that Bangladesh's overdependence on the readymade garments sector, which still accounts for 81.49 percent of total exports in FY2024-25, combined with a deteriorating logistics ecosystem, poses serious risks to the country's long-term economic resilience, particularly as it approaches LDC graduation. “RMG exports have already declined 5.51 percent in July-March of FY2025-26,” he said, underscoring vulnerability in the country's narrow export base. On the logistics front, Reaz presented a stark picture. Bangladesh ranks 88th on the World Bank's Logistics Performance Index, far behind India at 38th and Vietnam at 43rd, while Chattogram Port sits at 356th on the Container Port Performance Index, compared to Haiphong at 30th. Container dwell times at Chattogram remain critically high, with vessel turnaround averaging 3.23 days against just 0.86 days at Colombo. He said Chattogram Port handles 92 percent of the country's seaborne trade and 98 percent of container trade, yet operates under an outdated “tool port” model, relies heavily on manual processes, and has a draft depth of only 9.5 metres, insufficient for large vessels and forcing costly transshipment via third countries. Port tariffs have not been revised since 2008. Citing World Bank research, Reaz said a 25 percent reduction in logistics costs could boost exports by 20 percent, while cutting container dwell time by just one day at Chattogram would increase exports by 7.4 percent. He called for a comprehensive reform agenda built around eight priorities: activating and implementing the National Logistics Policy; transitioning to a landlord port model to attract private operators; fully operationalising the National Single Window for customs; accelerating the Matarbari Deep Sea Port and Bay Container Terminal projects; integrating road-rail-waterway multimodal networks; deploying AI and digital cargo tracking systems; revising the port tariff structure on a performance-linked basis; and strengthening regulatory safeguards for foreign investment in strategic infrastructure. Reaz also referenced Bangladesh's strategic geographic potential, noting the country is positioned as a natural transit corridor for India, Bhutan, Nepal and China, with the World Bank estimating an additional $11 billion in South Asia trade potential yet to be tapped. Referring to Korea's two-decade PPP port development experience, which mobilised $6.3 billion across 17 seaport projects and Vietnam's success with the Cai Mep–Thi Vai deep-water port cluster, he said private sector participation, backed by strong legal and regulatory frameworks, was indispensable for Bangladesh's port transformation. “Successful PPPs require strong legal, institutional, and regulatory frameworks aligned with international best practices,” he said. “Without that foundation, neither the investment nor the operational excellence will follow.” The proposed reforms align with the new government's manifesto commitments under Chapter 3, which envisages an integrated logistics hub centred on Chattogram and Mongla ports, multimodal transport integration, and strengthened digital customs systems.