Bangladesh government has further reduced export subsidies across almost all sectors to alleviate pressure on the treasury and prepare exporters for global competition without state support as Bangladesh graduates from least developed country (LDC) status in 2026. Last fiscal year, between February and June, cash assistance ranged from 1% to 15% on export earnings to boost exporters’ competitiveness. Previously, the highest rate was 20%.
Starting the 2024-25 fiscal year, Bangladesh Bank announced a maximum export incentive rate of 10% and a minimum of 0.3%. For apparel makers, cash assistance in all markets has been halved from 0.50% to 0.30%, and incentives for entering new markets reduced from 3% to 2%.
Other affected sectors include jute, leather, frozen fish, and agro products. Exporters of agro products, potatoes, and processed meat will receive the highest incentive of 10%, down from 15%. Previously, these exporters enjoyed a 20% incentive before February this year. Crust leather exports will now receive a 6% incentive.
Currently, 43 sectors are eligible for aid, with the government spending about Tk 9,025 crore annually over the past three years. The World Trade Organization’s rules prevent continuing cash incentives as export subsidies when transitioning from LDC to developing nation status.
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