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The government has extended export cash incentive facilities until June 30, 2026, continuing a long-standing policy measure to support exporters amid ongoing global economic challenges.
According to a notification issued by the Finance Division of the Ministry of Finance on Wednesday, exporters will remain eligible to receive cash incentives at existing rates for shipments made during the extended period. The facility was earlier scheduled to expire on December 31, 2025.
The extension comes at a time when Bangladesh’s exporters are facing subdued global demand, higher production and logistics costs, and stricter compliance requirements in major markets such as the European Union and the United States.
In January 2024, the government began restructuring export subsidies, reducing rates for 43 product categories from between 1.0 and 15.0 per cent to 0.3–10.0 per cent, triggering strong opposition from businesses that are now calling for a rollback to earlier rates.
Earlier, exporters had expressed concerns that any abrupt withdrawal of cash incentives could hurt competitiveness, particularly for non-readymade garment sectors. Bangladesh has traditionally used such incentives to encourage export diversification, offering relatively higher support to sectors including leather and leather goods, agro-processed products, light engineering, and IT-enabled services.
Exporters have also repeatedly called for greater policy predictability, arguing that frequent changes to incentive structures complicate pricing and long-term export contracts. The latest extension is expected to provide some stability for businesses planning shipments over the next fiscal year.
The notification added that all existing rules, conditions, and verification procedures for claiming export incentives will remain unchanged.
Talking to The Financial Express, BKMEA President Mohammad Hatem said the government should reconsider restoring higher cash incentive rates, considering the interests of local spinning mills and apparel exporters.
He also requested for refixing the incentive rate from the current 1.5 per cent to 5.0 per cent would benefit domestic millers and increase local value addition—an important requirement under the rules of the newly imposed US reciprocal tariff.
Mr Hatem also noted that under WTO rules, countries are allowed to provide such subsidies for a three-year grace period after graduating from least developed country (LDC) status.