Govt forms body to outline action plan for non-RMG export boost

• Finance ministry forms inter-ministerial committee tasked with developing action plans
• The sectors include leather, jute, agriculture, processed agri products, pharmaceuticals
• Committee will assess challenges that non-RMG sectors may face post-LDC
• It will propose solutions to mitigate these challenges

The finance ministry is formulating an action plan to identify additional forms of support, beyond cash incentives, to enhance the export capacity of key sectors other than ready-made garments.

Additionally, the government on 10 February formed a platform to promote non-RMG potential export sectors, according to an official order.

The ministry has formed an inter-ministerial committee to develop action plans and platforms to boost the export capacity of leather, jute, agriculture, processed agricultural products, and pharmaceutical sectors.

The committee, chaired by an additional secretary from the finance ministry, includes representatives from the ministries of commerce and industries, the Bangladesh Bank, the National Board of Revenue, the Bangladesh Investment Development Authority, the Bangladesh Trade and Tariff Commission, the Export Promotion Bureau, and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

The committee will submit its initial report by 25 February, according to the official order issued to this end.

Apart from identifying obstacles to boosting export capacity in these sectors, the committee will present its commendations to the government about financial and non-financial policy support.

It will assess the challenges the sectors may face if export incentives end after Bangladesh graduates from the least developed country (LDC) status in 2026 and propose solutions.

When asked, FBCCI Administrator and former WTO Cell director general Md Hafizur Rahman told The Business Standard, "Despite efforts to diversify exports, no committee has focused specifically on these sectors. Therefore, forming this committee to provide special incentives before LDC graduation is a timely decision."

He said the cash incentives for ready-made garment exports are low, and LDC graduation will have little impact on them as the GSP Plus will be available in the EU until 2029.

He said the cash support for leather, jute, agricultural, and pharmaceutical exports is high, with some sectors receiving up to 15%. Without alternative incentives, these sectors may face negative impacts post-LDC graduation, making the initiative to maintain and boost their export capacity commendable.

A committee member, speaking on condition of anonymity, told TBS that cash assistance to all sectors was reduced during the last fiscal year's budget preparation, with plans to completely withdraw it in the government's June 2026 budget.

He said studies have shown that exports will be impacted if cash assistance is stopped after LDC graduation and recommended providing alternative incentives, including subsidies on electricity bills, to address this.

No specific decision has been made on alternative incentives for export-oriented sectors, but an initiative has been taken to finalise an action plan before the next budget, with a specific announcement expected in the new budget, he added.