Bangladesh is considering stricter value-addition requirements for export-oriented industries under the proposed Import Policy Order 2026–2029, aiming to reduce reliance on imported raw materials and strengthen domestic backward linkage industries.
According to the draft policy reviewed by local media, exporters may be required to achieve significantly higher local value addition in order to qualify for cash incentives and duty benefits on imported raw materials.
A stakeholder consultation meeting was scheduled today, where Commerce Minister Khandakar Abdul Muktadir is expected to discuss the proposed policy with industry representatives ahead of finalisation.
If approved, the policy framework will remain effective until 31 December 2029.
One of the most significant proposed changes involves increasing the minimum value-addition requirement for garment exports produced using imported raw materials.
For children’s garments, the threshold could increase from 15 percent to 30 percent, while knit and woven apparel made from cotton and man-made fibres may require a minimum 30 percent value addition, up from the current 20 percent.
The draft policy also proposes stricter value-addition benchmarks for several other export sectors. Synthetic fibre-based underwear and specialised garments may need to achieve 40 percent value addition, while footwear exports could face a 30 percent threshold.
Ship exports may require 40 percent value addition, and wooden furniture exports could be subject to a 50 percent requirement under the proposed rules.
Another major proposal includes restricting imports of knitted fabrics, a move that has triggered concern among apparel industry leaders who argue that local production capacity remains insufficient to fully meet export demand.
Bangladesh Garment Manufacturers and Exporters Association President Mahmud Hasan Khan said while knitwear manufacturers may be able to meet a 30 percent threshold, the requirement would be difficult for woven garment exporters under current market conditions.
Similarly, Bangladesh Knitwear Manufacturers and Exporters Association President Mohammad Hatem warned that imposing a blanket restriction on knit fabric imports could hinder product diversification and create additional pressure on the domestic dyeing sector.
Industry representatives also highlighted ongoing challenges related to gas shortages, inconsistent energy supply and limited investment capacity, arguing that the current industrial environment is not suitable for abrupt import restrictions.
Former WTO Cell Director General Md Hafizur Rahman suggested that the higher value-addition requirements may partly be aimed at preventing export under-invoicing and money laundering, while also encouraging greater use of locally sourced materials.
However, he cautioned that stricter thresholds could negatively affect smaller export factories and employment generation.
The draft policy additionally proposes several trade facilitation measures, including the removal of the existing $500,000 cap on imports under sales contracts without letters of credit and greater flexibility in shipment timelines for imported machinery and goods.
The policy also includes revised import entitlement rules for export-oriented sectors, higher sample import limits for garment and leather manufacturers, and increased duty-free allowances for expatriate Bangladeshis sending goods to family members.
In a geopolitical provision, the draft order introduces a direct restriction on imports originating from Israel or transported through Israeli-flagged vessels.
Industry analysts believe the proposed policy reflects Bangladesh’s broader strategy to strengthen domestic industrial capacity, improve export competitiveness and prepare the economy for the post-LDC transition period.
