Trade
3 days ago

Scrapping Flag Vessel Act sought to boost ocean-going shipping industry

$3.5b investment stuck amid policy uncertainty; tax relief under consideration

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Industry leaders have called for the repeal of the Bangladesh Flag Vessel (Protection) Act 2019, terming it outdated and a major barrier to the growth of the country’s ocean-going shipping and shipbuilding industries.

Speaking at a seminar titled Investment Potentials in the Ocean-Going Vessel Industry, leading shipping entrepreneur Azam J Chowdhury said the law—introduced to reserve 50 per cent of government cargo for Bangladeshi-flagged vessels—has mainly benefited state-run carriers such as Bangladesh Shipping Corporation (BSC), while private operators owning over 100 vessels have been left out.

“When the law was enacted, BSC had only three ships. Today, private operators handle most of the freight but receive no government privileges,” Chowdhury noted. He also highlighted bureaucratic hurdles, including the requirement for ministerial approval to sell ships, and urged reforms to prepare for upcoming International Maritime Organization (IMO) rules mandating zero-emission fuels by 2029.

Shipping Senior Secretary Mohammed Yusuf acknowledged that over 100 shipyards are struggling due to high import duties on raw materials, unlike sectors such as garments that enjoy duty exemptions. “We’re working to remove raw material taxes and simplify VAT processes to revive the industry,” he said.

Presenting the keynote, Dr Zaidi Sattar, Chairman of the Policy Research Institute (PRI), warned that rising protectionism and climate regulations are reshaping global shipping. He stressed the need for Bangladesh to diversify exports and strengthen maritime capacity to remain competitive.

ERF President Doulot Akter Mala said 14 investors have so far injected $3.5 billion into the sector, but policy instability has created uncertainty. She added that the industry currently earns around $1.7 billion in remittances annually and has vast potential for expansion.

Speakers urged the government to develop an integrated policy connecting shipping, shipbuilding, ports, and transport infrastructure—framing maritime development as a cornerstone of national economic sovereignty.

tonmoy.wardad@gmail.com

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