Govt changes incentive structure for exports

The government has brought some major changes to the incentive structure for exports in order to achieve a higher overseas sales target set for the current fiscal year.

Bangladesh Bank on Thursday released an incentive structure for 2017-18, granting stimulus to five sectors for the first time and increasing existing rates for four.

With the new additions, 27 sectors will receive 2 to 20 percent incentive on the price of the goods. The number of sectors entitled for the benefit was 22 in the last fiscal year.

The five new sectors which were awarded higher incentives are IT-enabled services and hardware (10 percent), shoes made of synthetic and fabrics (15 percent), active pharmaceuticals ingredients (20 percent), accumulator battery (15 percent), and goods produced from coconut fibre (20 percent).

The incentive for export of crust and finished leather has been doubled to 10 percent from existing 5 percent if the tanneries at Hazaribagh relocate to Savar, according to the BB circular.


Exporters will receive a 10 percent incentive for selling locally produced paper and paper products from existing 5 percent.

The incentive for handmade products, hogla, hey, and sugarcane fibre has been increased to 20 percent from 15 percent now, while the stimulus for export of potato has been raised to 20 percent from 10 percent. The export benefit for finished products from jute goods has gone up to 10 percent from 7.5 percent. The government has set aside Tk 4,500 crore for export subsidies in the current fiscal year, of which Tk 500 crore would go for jute goods. The export target for 2017-18 has been set at $37.2 billion, up 8.2 percent from that of the last fiscal year. Bangladesh earned $34.65 billion in exports in 2016-17 against a target of $37 billion.


The BB has more than halved the interest rate on loans from the green transformation fund. The rate of interest on loans for export-oriented textile, textile products and leather manufacturing industry has been lowered to six-month LIBOR plus 1 percent from the existing six-month LIBOR plus 2.25 percent.

The central bank issued a circular in this regard last week.

Source: The Daily Star


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