Govt extends export incentives for 43 sectors until June 2026

The government has decided to continue export incentives and cash assistance for 43 sectors until June 2026.

According to a circular issued by Bangladesh Bank on Wednesday, cash assistance on shipped goods will remain between 0.30 percent and 10 percent depending on product categories.

The ready-made garment (RMG) and textile sectors will continue to be the main beneficiaries of the incentives.

For apparel exports, RMG products made from local yarn and shipped to new market destinations will receive a maximum incentive of 5.9 percent, down from 9.1 percent before June last year.

In the leather sector, which is the country’s second-largest export industry, exporters will receive 10 percent cash assistance for leather products and 6 percent for crust and finished leather.

Processed agricultural products will continue to enjoy a 10 percent cash subsidy, while diversified jute goods will receive 10 percent, jute products 5 percent and jute yarn 3 percent.

Several emerging and traditional sectors will also continue to receive support.

Light engineering products will get 10 percent, furniture 8 percent, pharmaceutical raw materials 5 percent, bicycles and motorcycles 3 percent, and handicrafts, including products made from hogla, straw and coconut fibre, will continue under previous rates.

Incentives ranging from 1.5 percent to 8 percent will remain in place for frozen shrimp, electronics, plastic goods, ship exports and various animal by-products.

The previous government reduced export incentives twice in 2024 in line with World Trade Organization guidelines.

Under WTO rules, countries graduating from Least Developed Country status to developing country status, a milestone Bangladesh is set to reach, are required to gradually phase out direct export subsidies.

However, the Ministry of Finance has decided to delay the complete withdrawal of these incentives due to ongoing global and domestic economic challenges, including possible US tariffs on Bangladeshi products, Indian restrictions on Bangladeshi exports through land ports, and industrial instability following the political transition in 2024,said officials.