Apparel exporters have urged the government to restore cash incentives to pre-2024 levels—3.0% for local yarn and 1.0% for general exports—and to remove complex procedural requirements that raise costs and slow payments.
At a meeting with the finance ministry, industry leaders argued these rates should remain until 2029, within the WTO’s three-year grace period after Bangladesh’s LDC graduation. They said restoring the yarn incentive from 1.5% to 3.0% would boost local millers and meet US reciprocal tariff rules, while reinstating the general incentive from 0.3% to 1.0% would help maintain competitiveness.
Exporters criticized delays of up to 18 months in disbursement and costly audit certifications, calling for simpler processes. Sector leaders, including BKMEA President Mohammad Hatem and BGMEA representatives, warned that the industry faces both domestic and external pressures, and stressed matching competitor nations’ support levels.
FBCCI officials proposed alternative supports—such as subsidies on utilities, salaries, and rent, or tax waivers—to prepare for the eventual phase-out of incentives after Bangladesh’s planned LDC graduation in November 2026. The government began cutting subsidies in January 2024, reducing rates for 43 product categories, prompting strong opposition and calls for a full rollback.
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