Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has expressed cautious optimism regarding the proposed national budget for FY2025–26, highlighting several measures it believes will bring much-needed relief to the country’s vital ready-made garment (RMG) industry.
In a press statement issued after the budget presentation by Finance Adviser Dr Salehuddin Ahmed on June 2, the BGMEA welcomed the government’s decision to maintain the existing source tax on export earnings and keep corporate tax rates for industries unchanged. These decisions come at a time when the sector is grappling with a host of serious domestic and international pressures.
Sector under stress
BGMEA noted that the RMG industry, which contributes 84% of Bangladesh’s total export earnings, is under intense strain due to several recent developments:
- Retaliatory tariffs by the United States, one of Bangladesh’s major export markets
- India’s cancellation of a key transshipment agreement, disrupting supply chains
- High bank interest rates, tightening access to credit for manufacturers
- Rising wage costs and frequent increases in gas and electricity prices, escalating production costs
In this context, the budget’s continuity in tax policies was termed a “stabilizing move” for an industry already navigating a volatile global environment.
Energy sector relief a “Positive Signal”
One of the key highlights of the budget, according to the BGMEA, is the government’s plan to reduce the overall cost of electricity generation by 10%. This measure aims to lower subsidy burdens in the energy sector over time while ensuring that no immediate hike in electricity prices takes place—a move the BGMEA called “highly beneficial” for export-oriented industries.
“Stabilizing energy prices while controlling inflation will not only support factories in managing their operating costs but will also help sustain competitiveness in global markets,” the statement read.
Forward planning for LDC graduation
With Bangladesh scheduled to graduate from Least Developed Country (LDC) status in 2026, RMG sector anticipates new hurdles, including the loss of preferential trade benefits in key export markets. The BGMEA stressed that its budget proposals were designed to help the industry retain its competitive edge post-graduation, and welcomed the government’s attention to some of its suggestions.
Support for Innovation and Inclusion
The association also applauded several development-oriented allocations in the budget:
- Tk 125 crore fund for women entrepreneurs
- Tk 200 crore for blue economy research
- Tk 100 crore to combat climate change risks
- Tk 100 crore for a special fund to support young entrepreneurs
These initiatives, the BGMEA said, align with the long-term vision of a resilient, inclusive, and innovation-driven industrial sector.
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