The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has submitted a comprehensive set of proposals for the upcoming 2026-27 national budget, warning that the country’s top export-earning sector is facing an "unprecedented challenge" due to global and domestic factors.
A BGMEA delegation, led by its President Mahmud Hasan Khan, submitted the proposals during a meeting with the National Board of Revenue (NBR) held at NBR Building in Agargaon on Sunday.
NBR Chairman Abdur Rahman Khan chaired the event. NBR members Azizur Rahman, Mobinul Kabir and Barrister Mutasim Billah Faruki were present at the meeting. BGMEA Vice President Md Shehab Udduza Chowdhury was also present.
According to the BGMEA, total apparel export earnings declined by 3.73 percent during the July-February period of the current fiscal year FY2025-26 compared to the same period last year.
The association highlighted that nearly 400 garment factories have shut down over the last three years, with many others remaining financially vulnerable.
Rising Costs and Declining Investment
The industry is grappling with a sharp rise in the cost of doing business. The BGMEA said bank loan interest rates have reached 12-15 percent, gas prices surged by 286 percent between 2017 and 2023, while electricity prices rose by 33 percent over the last five years.
It said minimum wages increased by 56 percent in 2024, and the annual increment was raised from 5 percent to 9 percent in December 2024. Chattogram Port tariffs were increased by 41 percent on October 15, 2025.
These factors, combined with a 60 percent reduction in export incentives since July 2023, have caused investment in the sector to stagnate, the trade body said.
It said capital machinery imports for the textile and garment sectors fell by 37.87 percent and 12.44 percent, respectively, during the first seven months of the current fiscal year.
Key Budgetary Demands
To sustain competitiveness, the BGMEA has proposed several tax and customs reforms for the 2026-27 fiscal year, including lowering the source tax on garment exports from 1.0 percent to 0.65 percent and maintaining it for the next five years, exempting the 10 percent income tax on cash assistance provided against exports, implementing a 1 percent concessional duty on the import of solar PV system equipment, such as solar panels, inverters, and lithium-ion batteries, to encourage renewable energy use, and resolving HS Code complexities by allowing the import of raw materials listed in the Utilisation Declaration (UD) without repetitive code-specific amendments to bond licenses.
The BGMEA emphasised that the RMG sector contributes approximately 83 percent of the nation's total export earnings and is the largest provider of employment.
It urged the government to implement these policy supports to ensure the industry's survival and achieve national export targets.