Bangladesh likely to review export incentive reduction decision

He revealed this during a meeting with the garment manufacturers recently, who expressed their concerns about the potential negative impact of the incentive cuts on the apparel sector.

Previously, the government had been offering cash subsidies ranging from 1 to 20 per cent to exporters, particularly in the garment sector, to enhance their global competitiveness.

However, as of the end of January this year, authorities implemented a reduction in incentives, adjusting the rates to range from 0.5 per cent to 15 per cent.

The revised rates are applicable to shipments made between January 1 and June 30 of the current year.

Notably, incentives for the top five garment items, which contribute to 56 per cent of the country's annual apparel shipments, were also withdrawn.

It may be mentioned here that prior to the January 31 notification, apparel exporters enjoyed 4 per cent incentive for using local fabrics, coupled with added 2 per cent for shipments within the eurozone.

They also received 4 per cent incentive for shipments to emerging markets, excluding the EU, US, Canada, and the UK even as the average incentive across all markets stood at 1 per cent.

Meanwhile, apparel exporters have voiced concerns, alleging an approximate 80 per cent reduction in export subsidies because adding this has created significant challenges towards maintaining competitiveness in the global market.

Fibre2Fashion News Desk (DR)