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The central bank on Tuesday announced fresh cash incentives for 43 export items for the next six months ending on June 30 by reducing the stimulus rates.
Earlier in August 2023, the Bangladesh Bank announced cash incentives applicable to 43 exportables for the entire fiscal year from 01 July 2023 to 30 June 2024.
But it revised the rates in the middle of the fiscal year considering the WTO rules which are applicable when a country graduates from its LDC status.
When contacted, a BB official said they revised downward incentives as Bangladesh would have to withdraw the facility from 2026 at a time when it would graduate from the club of LDCs.
"If we withdraw incentives at a time from all 43 products, it will have an adverse impact on overall shipment. So, we have planned to reduce the facility in phases."
"As part of the gradual reduction, we have issued the circular for the next six months up to 30 June 2024 by decreasing the rate of incentives," he told the FE.
On average, the government previously used to provide incentives between 1.0 per cent and 20 per cent. Now, it has revised downward between 0.5 and 15 per cent.
The ready-made garment industry will get 0.50 per cent cash incentive for the next six months against 1.0 per cent earlier, according to the circular.
For product and market diversification of the clothing industry, the exporters used to get a 4.0-per cent incentive, which has now come down to 3.0 per cent.
Agricultural products will get a 15-per cent incentive against 20 per cent earlier. Potato exporters will get a 15-per cent incentive from the previous 20 per cent.
Light engineering products used to get a 15-per cent cash incentive, but it has now reduced to 12 per cent.
On the other hand, diversified jute products will get a 15-per cent incentive against the earlier 20 per cent.
Furniture export will get a 10-per cent incentive against 15 per cent previously.
The vessels or ship-making industry will get an 8.0-per cent incentive from the earlier 10 per cent.
Active pharmaceutical ingredients used to get 20 per cent for exports, but it is down to 10 per cent now.
Plastic goods export now 8 per cent from 10 per cent.
On the other hand, 'agar' and 'attar' exports will now get 10 per cent from the previous 20-per cent stimulus.
Pharmaceutical products, instruments and appliances will get an 8.0-per cent incentive from 10 per cent.
Conventionally, export incentive applications will continue to undergo auditing by firms approved by the central bank and selected by the respective banks.