Garment and textile manufacturers and exporters in Bangladesh are concerned about the decision not to grant electricity and gas connections to new industrial units outside government-designated economic zones. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president, S M Mannan Kochi, stated that this decision would deter investment flow into the country, as most economic zones lack necessary infrastructure like water and electricity supplies. The cabinet committee on economic affairs decided on March 21st to restrict electricity and gas supply to new factories outside designated zones, with the Bangladesh Bank issuing a circular to enforce this. Despite a previous circular in 2020, this decision hadn’t been strictly implemented until now.
Business leaders argue that this move would exacerbate the crisis in the garment industry, hindering growth and discouraging entrepreneurs from establishing new factories. They urge the government to exempt the garment industry from this provision for at least five more years and emphasize the need for uninterrupted power and gas supply. Additionally, they discuss issues related to customs, VAT, income tax, and urge for smoother processes to facilitate industry development. They recommend reducing the tax at source to mitigate production cost impacts and maintain competitiveness. These concerns and recommendations are expected to be considered in the upcoming budget in June, with an emphasis on retaining competitiveness post-graduation from least-developed country status and attracting investments into promising sectors.
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