Desk Report:

Bangladesh is scheduled to transition from the Least Developed Country (LDC) list in 2026. To this end, a phased plan to reduce incentives on all types of exports has been announced.

According to Bangladesh Bank sources on Tuesday, the export sector may face a challenge if the export incentives/cash assistance are withdrawn altogether after LDC graduation. That is why the government has decided to gradually reduce the rate of cash assistance/incentives in various phases from now on.

Earlier, cash assistance ranging from 1 percent to 20 percent of export earnings was provided to encourage exporters and make them more competitive in the international market.

Now after the new announcement, the maximum rate has been fixed at 15 percent and minimum at 0.5 percent. It will be applicable from January 1 to June 30 this year, according to the notification.

According to the announcement, 43 sectors including ready-made garments, agriculture, leather have been given subsidy or cash assistance against the export of goods but the rates have been reduced.

According to the new guidelines, exporters will get cash assistance at the rate of 1.50 percent in the ready-made garments sector, which was earlier 1 percent. Cash assistance on leather and leather products has been reduced from 15 percent to 12 percent. Subsidy on jute has been reduced from 20 percent to 15 percent. The subsidy on the export of plastic products was 10 percent, now it will get 8 percent. The government has also reduced export subsidies in other sectors.