Business leaders and policy experts on Thursday raised concern over the recently issued SRO 384/2025, warning that the current framework for duty-free import of raw materials beyond the bonded warehouse facility could discourage small exporters.
The concerns were voiced at a high-level dialogue titled “Duty-Free Import of Raw Materials beyond Bonded Warehouse Facility”, organised by Business Initiative Leading Development (BUILD) at its conference room in Dhaka.
In the keynote presentation, Md Nooruzzaman, Senior Research Associate at BUILD, said under the SRO, non-bonded exporters will be allowed to import raw materials duty-free against a 100 percent bank guarantee.
He said the requirement would be difficult for many exporters to afford, as the guarantee would be encashed only after export proceeds are realised, creating pressure on working capital and limiting cash flow.
To qualify for the facility, exporters must ensure at least 30 percent value addition and maintain mandatory VAT compliance through regular online submissions.
Nooruzzaman said that while these conditions aim to ensure transparency, the facility is currently limited to only eight sectors including furniture, electronics and light engineering, excluding many potential export-oriented industries.
The working session was moderated by Dr Wasel Bin Shadat, Research Director of BUILD.
Mohammad Naziur Rahman Miah, First Secretary of NBR, said formulating SRO 384 had been a challenging task and stressed that it was not a fixed document.
“It will be updated over time based on experience and requirements,” he said, adding that the eight sectors were initially included due to demonstrated interest and the list could be expanded if other sectors come forward.
Referring to recent reforms, he said NBR had abolished the requirement of coefficients for bonded warehouse holders as well as UD and UP, opting instead for automation.
He said around 83 percent of UP processes have already been automated, with BGMEA, Customs and other relevant organisations now integrated, and assured that the system would continue to improve.
Md Shahidulla, Senior Deputy Secretary of BPGMEA, said local VAT authorities remain the controlling point for the facility.
He said exporters seeking benefits must hold IRC and ERC licences, which are different from customs bonded warehouse licences.
He also said that while DEDO has become fully operational, 100 percent duty drawback through DEDO has never been achieved in practice.
Calling for dynamic policy decisions, Saifur Rahman, Vice President of the Bangladesh Stainless Steel Pipe Manufacturers Association, stressed the importance of ease of doing business for export diversification.
He suggested following the Chinese model of PPP-based warehouses, noting that a committee was already working on the issue at NBR.
Md Abdur Rauf, CEO of the Bangladesh Furniture Exporters Association, urged the government to focus on value addition criteria rather than UP, UD and bank guarantees in export facilitation.
He also called for reducing lead time while enforcing strong punitive measures against misuse.
Criticising the 100 percent bank guarantee requirement, M S Siddiqui, CEO of Bangla Chemical, said such a provision is not a global practice.
He argued that revenue policies should be formulated by independent bodies instead of concentrating all authority within NBR and said the market should determine exportable products rather than imposing negative lists.
Former BAPA vice-president Shoaib Hasan proposed allowing 30 percent duty-free import of raw materials based on export performance, saying such an incentive could potentially double export volumes.
Mainul Islam, Deputy Manager of SME Foundation, urged NBR to align policies with the Ministry of Industries and recommended including priority sectors under the National Industrial Policy 2022 and the Product of the Year declared annually by the Ministry of Commerce in the positive list.
He said SME Foundation could create a sponsor guarantee fund for SME exporters if legally permitted.
Highlighting operational challenges, Sharif Nawrin Akter, AGM of LFMEAB, suggested that bank guarantee realisation should be done in phases.
She also said the current export time limit of nine months, extendable by only three months, was too short considering order cancellations and delays in export proceeds, and proposed extending it to at least two tax periods.
Shankar Kumar Roy, Executive Director of the Bangladesh Cement Manufacturers Association, urged inclusion of the cement sector in the positive list, citing its strong domestic base and export potential.
Summing up the session, Ferdaus Ara Begum, CEO of BUILD, said the organisation had taken note of all the recommendations and would prepare a detailed report to be shared with NBR.