ndc export strategy

Export Strategy of BangladeshExport Strategy of Bangladesh

Feroz AhmedFeroz AhmedSecretarySecretary

Ministry of CommerceMinistry of Commerce

Prepared for presentation at the NDC Course Prepared for presentation at the NDC Course 22 May 200822 May 2008

Some Basic Statistics on Trade Some Basic Statistics on Trade Position of BangladeshPosition of Bangladesh

Population (in million, 2006)Population (in million, 2006) 144.345144.345

GDP (Million U.S $, 2006)GDP (Million U.S $, 2006) 61,96161,961

Current Account BalanceCurrent Account Balance

(Million US$)(Million US$)

-176-176

Trade Per Capita Trade Per Capita

(US$, 2004-2006)(US$, 2004-2006)

177177

Trade to GDP RatioTrade to GDP Ratio

(2004-2006)(2004-2006)

42.142.1

Some Basic StatisticsSome Basic Statistics

Rank in World Trade, 2006:Rank in World Trade, 2006:

Exports ImportsExports ImportsMerchandise 72 66Merchandise 72 66Commercial Services 120 79Commercial Services 120 79

Share in World TradeShare in World Trade : :

Exports Imports Exports Imports 0.10% 0.13% 0.10% 0.13%

Some Basic StatisticsSome Basic StatisticsBreakdown in exports:Breakdown in exports:

Agricultural products 7.2%Agricultural products 7.2%Fuels & mining products 0.7%Fuels & mining products 0.7%Manufactures 92.1%Manufactures 92.1%

Breakdown in imports:Breakdown in imports:

Agricultural products 21.0%Agricultural products 21.0%Fuels & mining products 14.7%Fuels & mining products 14.7%Manufactures 63.7%Manufactures 63.7%


CCommercial Service Trade:ommercial Service Trade:

Exports (mln US$) 493Exports (mln US$) 493Imports (mln US$) 2320 Imports (mln US$) 2320

Share in World’s total Export (in 2006): 0.02%Share in World’s total Export (in 2006): 0.02%

Breakdown in Service Export:Breakdown in Service Export:

Transportation 23.80 %Transportation 23.80 %Travel 14.80 %Travel 14.80 %Other commercial services 61.4 % Other commercial services 61.4 %


Share in World’s total Import (in 2006): Share in World’s total Import (in 2006): 0.09 %0.09 %

Breakdown in Import:Breakdown in Import:

Transportation 76.80 %Transportation 76.80 %Travel 6.80 %Travel 6.80 %Other commercial services 16.4 % Other commercial services 16.4 %

SAARC Trade in MerchandiseSAARC Trade in Merchandise

•

CountryCountry World Rank in Exports

World Share in Exports(%)

World Rank in Imports

World Share in Imports(%)

Bangladesh 72 0.10 66 0.13

Bhutan 165 0.00 183 0.00

India 28 1.00 17 1.41

Maldives 169 0.00 136 0.01

Nepal 146 0.01 135 0.02

Pakistan 65 0.14 50 0.24

Sri Lanka 83 0.06 80 0.08

SAARC Trade in Services SAARC Trade in Services

•

CountryCountry World Rank inExport

World Share in Exports

World Rank in Imports

Share in World Imports

Bangladesh 120 0.02 79 0.09

Bhutan 177 0.00 179 0.00

India 10 2.68 13 2.41

Maldives 121 0.02 160 0.01

Nepal 144 0.01 134 0.02

Pakistan 78 0.08 51 0.31

Sri Lanka 87 0.06 78 0.09

World’s Biggest Exporters and Importers of World’s Biggest Exporters and Importers of goods & servicesgoods & services

•

Merchandise Merchandise exportsexports

Service Service exportsexports

MerchandiseMerchandise

ImportsImports

Service Service ImportsImports

CountryCountry RankRank ShareShare

(%)(%)

RankRank ShareShare

(%)(%)

RankRank ShareShare

(%)(%)

RankRank ShareShare

(%)(%)

GermanyGermany 11 9.209.20 33 6.126.12 22 7.327.32 22 8.278.27

USAUSA 22 8.598.59 11 14.1114.11 11 15.4615.46 11 11.6211.62

ChinaChina 33 8.028.02 88 3.323.32 33 6.386.38 66 3.793.79

JapanJapan 44 5.385.38 44 4.454.45 55 4.684.68 44 5.445.44

FranceFrance 55 4.064.06 55 4.154.15 66 4.314.31 55 4.114.11

NetherlandNetherland 66 3.833.83 99 2.992.99 88 3.353.35 99 2.952.95

UKUK 77 3.713.71 22 8.268.26 44 4.994.99 33 6.496.49

ItalyItaly 88 3.403.40 77 3.543.54 77 3.623.62 77 3.713.71

Bangladesh Export 1974-75 to 2007-08Bangladesh Export 1974-75 to 2007-08(Figures in Million US$)(Figures in Million US$)

YearYear Million $Million $ % growth% growth

1974-751974-75 382.68382.68 2.942.94

1979-801979-80 749.44749.44 21.1021.10

1984-851984-85 934.42934.42 15.2215.22

1989-901989-90 1523.701523.70 17.9717.97

1994-951994-95 3472.563472.56 37.0437.04

1999-001999-00 5752.205752.20 8.278.27

2004-052004-05 8654.528654.52 13.8313.83

2005-062005-06 10526.1610526.16 21.6221.62

2006-072006-07 12177.8612177.86 15.6915.69

2007-08 (up to March)2007-08 (up to March) 10159.7810159.78 12.4312.43

Bangladesh Export 1972-73 to 2007-08Bangladesh Export 1972-73 to 2007-08 (Figures in Million US$)(Figures in Million US$)

Export from Bangladesh: Yr 1972-73 to Yr 2007-08

02000400060008000

100001200014000

1974-75 1979-80 1984-85 1989-90 1994-95 1999-00 2004-05 2005-06 2006-07 2007-08(up toMarch)

FY

Perfo

rman

ce in

US$

Export Destinations(Share) by RegionExport Destinations(Share) by Region

Regions Regions 2003-042003-04 2004-052004-05 2005-062005-06 2006-072006-07

European Union (25)European Union (25) 56.2956.29 53.40%53.40% 52.28%52.28% 52.56 %52.56 %

America RegionAmerica Region 30.1130.11 32.29%32.29% 33.32%33.32% 32.74 %32.74 %

Asia region Asia region (excluding M. East)(excluding M. East)

7.577.57 8.69%8.69% 8.84%8.84% 8.52 %8.52 %

Middle EastMiddle East 1.931.93 2.53%2.53% 2.54%2.54% 2.75 %2.75 %

AfricaAfrica 1.101.10 0.74%0.74% 0.63%0.63% 0.64 %0.64 %

OceaniaOceania 0.460.46 0.45%0.45% 0.29%0.29% 0.25 %0.25 %

East EuropeEast Europe 0.240.24 0.28%0.28% 0.31%0.31% 0.35 %0.35 %

OthersOthers 2.302.30 1.62%1.62% 1.79%1.79% 2.19 %2.19 %

Export Destinations by Region(2006-07)Export Destinations by Region(2006-07)

Major Importing Countries of Bangladesh Exportables during 2006-07

European Union (25),

52.56%

Africa, 0.64%

Oceania, 0.25%

Middle East, 2.75%

East Europe, 0.35%

Asia region (excluding M. East), 8.52%

America Region, 32.74%

Others, 2.19%

Export by CommoditiesExport by Commodities (2006-07) (2006-07)CommoditiesCommodities Million US$Million US$ Share(%)Share(%)

Woven garmentsWoven garments 4657.634657.63 38.2538.25

KnitwearKnitwear 4553.604553.60 37.3937.39

Frozen foodFrozen food 515.32515.32 4.234.23

Jute goodsJute goods 320.78320.78 2.632.63

LeatherLeather 266.08266.08 2.182.18

Home textileHome textile 256.97256.97 2.112.11

Agricultural productsAgricultural products 87.8287.82 0.720.72

Chemical productsChemical products 215.24215.24 1.771.77

Engineering productsEngineering products 236.91236.91 2.192.19

Raw juteRaw jute 147.15147.15 1.211.21

FootwearFootwear 135.94135.94 1.121.12

Other productsOther products 784.42784.42 6.446.44

TotalTotal 12177.8612177.86 100100

Export by CommoditiesExport by Commodities (2006-07) (2006-07)Value in mln US$Value in mln US$

Export By Commodities (2006-07)

Agri products87.82,(0.72%)

Chemical products, 215.24, (1.77%)

Home textile, 256.97,( 2.19%)

Leather266.08, (2.18%)

Jute goods 320.78, (2.63%)

Frozen food515.32, (4.23%)

Woven garments, 4657.63, (38.25%)

Other products, 784.42, 6.44%

Footwear, 135.94, (1.12%)

Engi products, 236.91, (2.19%)

Raw jute, Million 147.15, (1.21%)

Knitwear4553.6,(37.39%)

Exports by major groups of goodsExports by major groups of goods

Products Products

Share in Share in 1984-851984-85




PrimaryPrimary11 33.88%33.88% 7.49%7.49% 7.34%7.34% 6.83%6.83%

ManufacturedManufactured22 66.12%66.12% 92.51%92.51% 92.55%92.55% 93.17%93.17%

TraditionalTraditional33 64.2%64.2% 4.80%4.80% 4.92%4.92% 3.90%3.90%

Non-Non-traditionaltraditional44

35.80%35.80% 95.20%95.20% 95.70%95.70% 96.10%96.10%

Jute & Jute Jute & Jute goodsgoods

57.85%57.85% 4.66%4.66% 4.83%4.83% 3.84%3.84%

Non-juteNon-jute 42.15%42.15% 95.34%95.34% 95.16%95.16% 96.16%96.16%

Exports by major groups of goodsExports by major groups of goodsNotes:Notes:1 1 Primary products include raw jute, vegetables, Primary products include raw jute, vegetables, frozen food, tobacco, cut flower/foliage, agro-frozen food, tobacco, cut flower/foliage, agro-processed food, etc.processed food, etc.2 2 Manufactured products include woven and knit Manufactured products include woven and knit garments, jute goods, engineering products, garments, jute goods, engineering products, chemicals, melamine and ceramic tableware, chemicals, melamine and ceramic tableware, footwear, leather & leather goods, footwear, leather & leather goods, pharmaceuticals, textile fabrics, bi-cycle, pharmaceuticals, textile fabrics, bi-cycle, electronics, etc.electronics, etc.3 3 Traditional items include raw jute, tea and jute Traditional items include raw jute, tea and jute goods (excluding carpets).goods (excluding carpets).4 4 Non-traditional items include woven garments, Non-traditional items include woven garments, knitwear, frozen food, chemical products, leather, knitwear, frozen food, chemical products, leather, home textile, pharmaceuticals, handicrafts, home textile, pharmaceuticals, handicrafts, footwear, textile fabrics, etc.footwear, textile fabrics, etc.

Exports by major groups of goodsExports by major groups of goods

Main Features are:Main Features are: Importance of raw jute diminished over Importance of raw jute diminished over

the years, and so were the primary and the years, and so were the primary and traditional products;traditional products;

Bangladesh has become an exporter of Bangladesh has become an exporter of manufactured goods over the years. manufactured goods over the years.

By 1990, Bangladesh’s export overridden By 1990, Bangladesh’s export overridden traditional items;traditional items;

The share of jute & jute goods was 58% The share of jute & jute goods was 58% in 1984-85. This has gone down to 23% in 1984-85. This has gone down to 23% in 1990-91, 10% in 1996-97, and 4.83% in in 1990-91, 10% in 1996-97, and 4.83% in 2005-06, 3.84% in 2006-07.2005-06, 3.84% in 2006-07.

Change in Export Price and Volume IndexChange in Export Price and Volume Index Primary Products:Primary Products:Year Price Volume Total ChanYear Price Volume Total Changege2003-04 +0.31% + 19.31 % +19.62%2003-04 +0.31% + 19.31 % +19.62%2004-05 +0.18% + 16.98% +17.16%2004-05 +0.18% + 16.98% +17.16%2005-06 -0.04% + 19.23% +19.19%2005-06 -0.04% + 19.23% +19.19%2006-072006-07 +5.33 % + 2.39 % +7.72 % +5.33 % + 2.39 % +7.72 % 2007-08(J-F) +6.39% +14.23% +20.62%2007-08(J-F) +6.39% +14.23% +20.62%

Manufactured Products:Manufactured Products:Year Price Volume Total ChangeYear Price Volume Total Change2003-04 +4.13% + 11.71 % +15.84%2003-04 +4.13% + 11.71 % +15.84%2004-05 +0.80% + 12.77% +13.57%2004-05 +0.80% + 12.77% +13.57%2005-06 -1.77% +23.59% +21.82%2005-06 -1.77% +23.59% +21.82%2006-07 -1.11 % +17.43% +16.32% 2006-07 -1.11 % +17.43% +16.32% 2007-08(J-F)2007-08(J-F) –0.64% +11.26% +10.62%–0.64% +11.26% +10.62%

Export as a percentage of ImportFinancial Financial YearYear

Export Export (mln.US$)(mln.US$)

Import Import (mln.US$)(mln.US$)

Export as a Export as a percentage of importpercentage of import

1984-851984-85 934934 26412641 35.37%35.37%

1989-901989-90 1523.701523.70 3758.703758.70 40.54%40.54%

1999-20001999-2000 5752.205752.20 84038403 68.45%68.45%

2002-032002-03 6548.446548.44 9658.009658.00 67.80%67.80%

2003-042003-04 7602.997602.99 10903.0010903.00 69.73%69.73%

2004-052004-05 8654.528654.52 13147.0013147.00 65.83%65.83%

2005-062005-06 10526.1610526.16 14746.0014746.00 71.38%71.38%

2006-072006-07 12177.8612177.86 15971.3515971.35 76.25%76.25%

2007-08 2007-08 (up to Feb)(up to Feb)

8932.598932.59 12633.2612633.26 70.71%70.71%

Constraints to Export GrowthConstraints to Export Growth

Demand & supply side constraints to export Demand & supply side constraints to export are:are:

Trade policies of partner countries;Trade policies of partner countries; Stringent EU rules of origin;Stringent EU rules of origin; High tariffs in US market for Bangladesh High tariffs in US market for Bangladesh

RMG- average 16%;RMG- average 16%; Standards & qualities of products;Standards & qualities of products; Lack of investment funds & working capital Lack of investment funds & working capital

and high interest rate; and high interest rate;

Contd….Contd….

ContinuedContinued

Shortage of skilled workers, lack of Shortage of skilled workers, lack of entrepreneurial and managerial skills;entrepreneurial and managerial skills;

Poor physical infrastructure;Poor physical infrastructure; Inefficient ports, high transport costs, weak Inefficient ports, high transport costs, weak

institutions; institutions; Invisible costs of doing business; Invisible costs of doing business; Environment & compliance issues, etc.Environment & compliance issues, etc.

Overview of Trade Policy Reform InitiativesOverview of Trade Policy Reform Initiatives

Promoting trade through trade policy reforms & Promoting trade through trade policy reforms & removal of structural obstacles since early 80s;removal of structural obstacles since early 80s;

Liberalization policy focused on simplification of Liberalization policy focused on simplification of import procedures, reduction of quantitative import procedures, reduction of quantitative restrictions (QRs), rationalization and diminution restrictions (QRs), rationalization and diminution of import tariffs, and maintaining a competitive of import tariffs, and maintaining a competitive exchange rate;exchange rate;

Import Policy 2006-09 contains 25 items in the Import Policy 2006-09 contains 25 items in the control list;control list;

Highest import tariff has been brought down to Highest import tariff has been brought down to 25% in FY06 from 300% in 1992-93;25% in FY06 from 300% in 1992-93;

No. of tariff slabs has come down to 4 (0%, 10%, No. of tariff slabs has come down to 4 (0%, 10%, 15%, 25%) in FY 07 from 24 in 1980s;15%, 25%) in FY 07 from 24 in 1980s;

Continued…..Continued….. Un-weighted customs duty rate fall from 57.2% in Un-weighted customs duty rate fall from 57.2% in

1991-92 to 13.01% in 2006-07; 1991-92 to 13.01% in 2006-07;

Average nominal tariff (customs plus para-tariff) Average nominal tariff (customs plus para-tariff) came down to 27.4% in 2005-06 from 40% in 1993-came down to 27.4% in 2005-06 from 40% in 1993-94;94;

Introduction of general promotional measures for Introduction of general promotional measures for exports - lower rates of interest on bank loans, exports - lower rates of interest on bank loans, duty free import of machinery & intermediate duty free import of machinery & intermediate imports, cash incentives, duty drawbacks, imports, cash incentives, duty drawbacks, exemption from VAT, etc.;exemption from VAT, etc.;

Anti-export bias fall from 59% in 1991-92 to 18% in Anti-export bias fall from 59% in 1991-92 to 18% in 2002-03;2002-03;

All these liberalization initiatives have contributedAll these liberalization initiatives have contributedsuccessfully in energizing export & minimize thesuccessfully in energizing export & minimize thegap between imports and exports substantiallygap between imports and exports substantially..

Continued…Continued…

In the 1990s real exports grew at an annual rate In the 1990s real exports grew at an annual rate of 12.5% with a 4.8% GDP growth rate against a of 12.5% with a 4.8% GDP growth rate against a growth rate of exports of 3.9% for the 1980s;growth rate of exports of 3.9% for the 1980s;

Separate policies for import and export;Separate policies for import and export;

Objective of the trade policy is to reduce Objective of the trade policy is to reduce poverty through employment creation, poverty through employment creation, generation of income and diversification of generation of income and diversification of markets and products of exports;markets and products of exports;

Import substitution policy is replaced by export-Import substitution policy is replaced by export-bias policy;bias policy;

Accelerated withdrawal of the government from Accelerated withdrawal of the government from the industry to promote private sector;the industry to promote private sector;


Importance on institutional capacity Importance on institutional capacity building- BSTI, BIFT, NITRAD, etc.;building- BSTI, BIFT, NITRAD, etc.;

Emphasis on HR development;Emphasis on HR development;

Adopt new and aggressive strategies for Adopt new and aggressive strategies for diversifying export products and markets;diversifying export products and markets;

Ensure good use of IT and introduce e-Ensure good use of IT and introduce e-governance, etc.; andgovernance, etc.; and

All these liberalization initiatives have contributedAll these liberalization initiatives have contributedsuccessfully in energizing export & minimize thesuccessfully in energizing export & minimize thegap between imports and exports substantially.gap between imports and exports substantially.

Main Features of Export RegimeMain Features of Export Regime

Bangladesh exports 167 commodities to 186 Bangladesh exports 167 commodities to 186 countries;countries;

In 1984-85, export was less than $1.0 billion. This In 1984-85, export was less than $1.0 billion. This shot up to $8.7 billion in 20 years in 2004-05, and shot up to $8.7 billion in 20 years in 2004-05, and 12.18 billion in 2006-07.12.18 billion in 2006-07.

Major export commodities are: RMG, frozen food, Major export commodities are: RMG, frozen food, leather, raw jute, jute goods, home textile.leather, raw jute, jute goods, home textile.

These 6 products together accounts for about 90% These 6 products together accounts for about 90% of the total export of Bangladesh. of the total export of Bangladesh.

Last 2 decades witnessed phenomenal rise in Last 2 decades witnessed phenomenal rise in exports led by readymade garments (RMG);exports led by readymade garments (RMG);

Continued…….Continued…….

RMG industry grew under the protection of MFA RMG industry grew under the protection of MFA quota, duty-free access to EC and other developed quota, duty-free access to EC and other developed countries and supportive policy reforms countries and supportive policy reforms undertaken by GOB;undertaken by GOB;

RMG is the largest manufacturing sector in terms RMG is the largest manufacturing sector in terms of income & employment.of income & employment.

More than 2.5 million workers in the RMG sector, More than 2.5 million workers in the RMG sector, 80% of whom are women working in more than 80% of whom are women working in more than 5,000 factories;5,000 factories;

RMG alone generates about 75% of the total export RMG alone generates about 75% of the total export revenue.revenue.

Growth of RMG Sector – Role of Policy SupportsGrowth of RMG Sector – Role of Policy Supports

Generous policy supports of the Generous policy supports of the government to RMG sector was government to RMG sector was instrumental to its growth during last two instrumental to its growth during last two decades;decades;

Policy supports include back-to-back Policy supports include back-to-back LCs, bonded warehouse facilities, cash LCs, bonded warehouse facilities, cash incentives (5%) for domestic textile incentives (5%) for domestic textile products incl. handloom replacing duty products incl. handloom replacing duty draw back system;draw back system;

Campaign for duty-free access to Campaign for duty-free access to developed markets-;developed markets-;

Simplified customs clearance procedure;Simplified customs clearance procedure;


Formation of Social Compliance Forum to Formation of Social Compliance Forum to address the issues related to compliance and address the issues related to compliance and standards;standards;

Encouragement of backward linkage Encouragement of backward linkage industries including primary textile sector;industries including primary textile sector;

Export credits at lower interest rates;Export credits at lower interest rates;

Allowing FDI outside EPZs;Allowing FDI outside EPZs;

Creation of government and private owned Creation of government and private owned EPZs.EPZs.

Export PolicyExport Policy

Issuing Export Policy on 3 Years basis. Present Issuing Export Policy on 3 Years basis. Present Export Policy 2006-09 guides the export issues for Export Policy 2006-09 guides the export issues for these three years.these three years.

Export Policy deals with matters related to policy , Export Policy deals with matters related to policy , conditions, requirements for conducting export conditions, requirements for conducting export activities and the strategies to accomplish the activities and the strategies to accomplish the objectives;objectives;

List of prohibited goods, list of goods exportable List of prohibited goods, list of goods exportable under conditions/restrictions, etc. are included in under conditions/restrictions, etc. are included in the policy. the policy.

Export Policy aims at transforming the Export Policy aims at transforming the comparative advantages into competitive comparative advantages into competitive advantages through addressing the supply side advantages through addressing the supply side constraints.constraints.


Supply-side constraints include issues related Supply-side constraints include issues related to compliance such as working conditions, to compliance such as working conditions, workers’ rights, work environment, social workers’ rights, work environment, social safety, etc. safety, etc.

Supply side constraints also requires attention Supply side constraints also requires attention to a host of other interlinked issues such as to a host of other interlinked issues such as port management, governance, corruption, port management, governance, corruption, transportation, infrastructure, sanitary & transportation, infrastructure, sanitary & phyto-sanitary (SPS) aspects, market access phyto-sanitary (SPS) aspects, market access conditions, etc. ; andconditions, etc. ; and

Export Policy is applicable to areas other than Export Policy is applicable to areas other than EPZs.EPZs.

Export Strategy Export Strategy

1. Diversification of export Market 1. Diversification of export Market

2. Duty Free, Quota Free Market Access2. Duty Free, Quota Free Market Access

3. Preferential Market Access3. Preferential Market Access

Bilateral AgreementBilateral Agreement

Regional: e.g. SAFTA, APTA, BIMSTEC etcRegional: e.g. SAFTA, APTA, BIMSTEC etc

Multilateral: e.g WTO, TPS-OIC etcMultilateral: e.g WTO, TPS-OIC etc

4. Promotional Activities: e.g. Participation in 4. Promotional Activities: e.g. Participation in international Fairs, Organizing Single international Fairs, Organizing Single Country fair abroad;Country fair abroad;

Continued…Continued…5. Diversification of Export Products:5. Diversification of Export Products: Highest priority sector: Highest priority sector: It includes 6 products such as It includes 6 products such as

(1)Software & ICT products, (2)Agro-products & agro-(1)Software & ICT products, (2)Agro-products & agro-processing goods,(3)Light engineering products processing goods,(3)Light engineering products including auto-parts & bi-cycle,(4)Footwear & leather including auto-parts & bi-cycle,(4)Footwear & leather products,(5)Home textile and, (6)Pharmaceuticals . products,(5)Home textile and, (6)Pharmaceuticals . These refer to products whose export potentiality is These refer to products whose export potentiality is very high, but due to various reasons they are lagging very high, but due to various reasons they are lagging behind and necessary support can promote their behind and necessary support can promote their export significantly; export significantly;

Special development sector: Special development sector: It includes 9 products It includes 9 products such as (1) Fsuch as (1) Finished leather;(2)Frozen fish; inished leather;(2)Frozen fish; (3)Handicraft ; (4) Electronic; (5) Fresh flower and (3)Handicraft ; (4) Electronic; (5) Fresh flower and foliage; (6)Jute products; (7)Hand-woven textiles from foliage; (6)Jute products; (7)Hand-woven textiles from hill areas; (8)Uncut diamond; and (9) Herbal medicine hill areas; (8)Uncut diamond; and (9) Herbal medicine and medicinal plantsand medicinal plants. These products have export . These products have export potentials but do not have strong production, supply potentials but do not have strong production, supply and export base.and export base.

Continued…Continued…6. Three committees to oversee and implement the 6. Three committees to oversee and implement the

decisions to promote exports: decisions to promote exports: (1) National (1) National Committee on Export (NCE) headed by the Prime Committee on Export (NCE) headed by the Prime Minister, (2)Task Force headed by the Commerce Minister, (2)Task Force headed by the Commerce Minister to implement the decisions of the NEC, Minister to implement the decisions of the NEC, and (3) Export Monitoring Group chaired by Vice and (3) Export Monitoring Group chaired by Vice Chairman, Export Promotion Bureau (EPB). Chairman, Export Promotion Bureau (EPB).

7. Export Promotion Bureau (EPB) is responsible for 7. Export Promotion Bureau (EPB) is responsible for promotion of Export. Five Business Promotion promotion of Export. Five Business Promotion Councils under public private partnership have Councils under public private partnership have also been working to promote 5 sectors likealso been working to promote 5 sectors like ICT, ICT, Light Engineering Products, Leather, Herbal & Light Engineering Products, Leather, Herbal & Medicinal Products, and Frozen Food.Medicinal Products, and Frozen Food.

8. Declaration of one product as Product of the year8. Declaration of one product as Product of the year

Continued.. Continued..

9. Awarding CIP and Export Trophy9. Awarding CIP and Export Trophy

10 . Providing Cash incentive10 . Providing Cash incentive

11.Capacity Building: 11.Capacity Building: Undertake projects for Undertake projects for capacity building of exporters, improving capacity building of exporters, improving quality of exportable products, product quality of exportable products, product diversification, compliance, monitoring, diversification, compliance, monitoring, transfer of technology etc..transfer of technology etc.. At present, Ministry At present, Ministry of Commerce is implementing 10 technical of Commerce is implementing 10 technical projects, like Quality Support Export projects, like Quality Support Export Diversification Program, Support to Diversification Program, Support to Bangladesh RMG Sector in the post MFA, Bangladesh RMG Sector in the post MFA, Small Project facilities, Bangladesh Trade Small Project facilities, Bangladesh Trade Support Program, Computerization of the Support Program, Computerization of the Office of Registrar Joint Stock Companies and Office of Registrar Joint Stock Companies and Firms, Capacity Building of FBCCI etcFirms, Capacity Building of FBCCI etc

Incentives available to Highest Priority Sector Incentives available to Highest Priority Sector & Special Development Sector& Special Development Sector

Project loan at reduced interest on priority Project loan at reduced interest on priority basis;basis;

Income tax rebate (5-7 years);Income tax rebate (5-7 years); Financial incentives including cash Financial incentives including cash

assistance or subsidy;assistance or subsidy; Export credit on easy terms and reduced Export credit on easy terms and reduced

interest rates;interest rates; Air transport facilities with concessionary Air transport facilities with concessionary

transport fares;transport fares; Tax refundTax refund

Continued….Continued….

bonding facility;bonding facility; Assistance for setting up infrastructures Assistance for setting up infrastructures

and related units to reduce production and related units to reduce production cost;cost;

Expansion of institutional and technical Expansion of institutional and technical facilities for developing product quality facilities for developing product quality and quality control;and quality control;

Assistance in marketing of products;Assistance in marketing of products; Assistance in foreign investment, etc.Assistance in foreign investment, etc.

Export Supports/Incentives of General natureExport Supports/Incentives of General nature

Use of a portion of the foreign currency earned by Use of a portion of the foreign currency earned by the exporter under the retention quota of the exporter under the retention quota of Bangladesh Bank for foreign trip, participation in Bangladesh Bank for foreign trip, participation in international fairs and seminars, import of raw international fairs and seminars, import of raw materials, spares and equipment, establishment of materials, spares and equipment, establishment of office abroad, etc.;office abroad, etc.;

Export development Fund – offers venture capital Export development Fund – offers venture capital at low interest rates, assistance for obtaining at low interest rates, assistance for obtaining foreign technical assistance, service and foreign technical assistance, service and technology, assist in sending marketing missions technology, assist in sending marketing missions abroad, assist in the establishment of sales & abroad, assist in the establishment of sales & display centers and warehousing facilities abroad, display centers and warehousing facilities abroad, assist in participation in product development & assist in participation in product development & marketing training programs for export promotion, marketing training programs for export promotion, etc.etc.

Continued….Continued…. Tax holidays (5 years for Dhaka, Chittagong Tax holidays (5 years for Dhaka, Chittagong

& Khulna and 7 years for other areas;& Khulna and 7 years for other areas; Agro-processed industries, ICT, to be Agro-processed industries, ICT, to be

relieved from income tax;relieved from income tax; Restructure the Export Credit Guarantee Restructure the Export Credit Guarantee

Scheme;Scheme; Up to 90% bank loan against irrevocable LC Up to 90% bank loan against irrevocable LC

or confirmed contracts;or confirmed contracts; Other incentives include: subsidy on Other incentives include: subsidy on

utilities, fixation of rates for industrial use utilities, fixation of rates for industrial use of services such as water, gas, electricity, of services such as water, gas, electricity, etc.;etc.;

Continued….Continued…. Duty draw back system of non-conventional and Duty draw back system of non-conventional and

new products;new products; Permission for selling rejected or stock lot Permission for selling rejected or stock lot

products to local markets by export industries on products to local markets by export industries on paying of applicable duties & taxes;paying of applicable duties & taxes;

Creation of an Export Credit Cell in Bangladesh Creation of an Export Credit Cell in Bangladesh Bank, and Special Credit Units for export Bank, and Special Credit Units for export promotions in Commercial Banks;promotions in Commercial Banks;

Creation of a powerful “Export Credit Monitoring Creation of a powerful “Export Credit Monitoring Committee”;Committee”;

Rebate on Insurance Premium for export of non-Rebate on Insurance Premium for export of non-conventional products;conventional products;

Cash incentives for export of non-traditional Cash incentives for export of non-traditional industrial productsindustrial products;;

Continued….Continued…. Up to 50% exemption on income tax;Up to 50% exemption on income tax; Duty free import of capital machinery and 10% Duty free import of capital machinery and 10%

spare parts;spare parts; Continuation of the bonded warehouse facilities Continuation of the bonded warehouse facilities

for the export industries;for the export industries; Encouragement of brands of products.Encouragement of brands of products. 80% products exporting industries to be treated as 80% products exporting industries to be treated as

export industries;export industries; Encourage establishment of linkage industries;Encourage establishment of linkage industries; Encourage investment on HR development and Encourage investment on HR development and

research & development activities;research & development activities; Reduced plane fare for export of vegetables and Reduced plane fare for export of vegetables and

fruits;fruits;

Continued….Continued…. Encouragement of export sub-contracting jobs;Encouragement of export sub-contracting jobs; Fixation of limits of sending samples for promotion of Fixation of limits of sending samples for promotion of

exports ($3500 annually)exports ($3500 annually) Facilities to import sample (up to $5000 annually) for Facilities to import sample (up to $5000 annually) for

RMG industries;RMG industries; Multiple entry visa for foreign investors;Multiple entry visa for foreign investors; Setting up world trade centre;Setting up world trade centre; Selection of Commercially important persons (CIPs);Selection of Commercially important persons (CIPs); Facilities for deemed exports;Facilities for deemed exports; Organization of international fairs;Organization of international fairs; Entre-pot and re-export facilities;Entre-pot and re-export facilities; Export without LCs; Export without LCs;

List of export Item under Cash incentivesList of export Item under Cash incentives CommodityCommodity Rate Rate

1.Frozen shrimp and other fish1.Frozen shrimp and other fish 10%10%

2.Products made of hogla, straw, coir of sugar 2.Products made of hogla, straw, coir of sugar cane:cane:

(a)(a) Local raw materials more than 80%Local raw materials more than 80%

(b)(b) Local raw materials more than 50%Local raw materials more than 50%

(a) 20%(a) 20%

(b) 15%(b) 15%

3.Bi-cycles3.Bi-cycles 15%15%

4. Crushed bone4. Crushed bone 15%15%

5. Agro and agro-products (vegetables/fruit) and 5. Agro and agro-products (vegetables/fruit) and agro-processing:agro-processing:

(i) Local raw materials more than 80%(i) Local raw materials more than 80%

(ii) Local raw materials more than 50%(ii) Local raw materials more than 50%

(i)(i) 20%20%

(ii)(ii) 15%15%

ContinuedContinuedCommodityCommodity Rate Rate

6. Local fabrics (incl. handloom)6. Local fabrics (incl. handloom) 5%5%

7. Jute products7. Jute products 7.5%7.5%

8. Leather products8. Leather products 15%15%

9. Tobacco9. Tobacco 10%10%

10. Potato10. Potato 10%10%

11. Hatching eggs and day old chicks of poultry 11. Hatching eggs and day old chicks of poultry industryindustry

15%15%

12. Liquid glucose produced at Iswardi EPZ12. Liquid glucose produced at Iswardi EPZ 20%20%

13. Light Engineering Products13. Light Engineering Products 10%10%

14. Halal Meat14. Halal Meat 20%20%

Recent steps to diversify exports Recent steps to diversify exports Improvement in port handling capacity & Improvement in port handling capacity &

management;management;

Improvement of overall governance position; Improvement of overall governance position;

Strengthening the Bangladesh Missions abroad Strengthening the Bangladesh Missions abroad and emphasis on economic diplomacy. and emphasis on economic diplomacy.

Income tax exemption on export business;Income tax exemption on export business;

Total exemption of export earning from tax for Total exemption of export earning from tax for handicrafts and cottage industries;handicrafts and cottage industries;

100% export-oriented RMG industries are subject 100% export-oriented RMG industries are subject to 0.25% tax at source if not enjoying tax holiday;to 0.25% tax at source if not enjoying tax holiday;

contd..contd.. Industrial units ineligible for tax holiday may Industrial units ineligible for tax holiday may

receive accelerated depreciation allowances at receive accelerated depreciation allowances at 100%;100%;

VAT exemption through refunds on services such VAT exemption through refunds on services such as C&F, customs broker services, up to 80% return as C&F, customs broker services, up to 80% return of bills on telephone, telex, fax, gas, electricity, of bills on telephone, telex, fax, gas, electricity, 60% WASA bills, shipping agent commission, etc. 60% WASA bills, shipping agent commission, etc.

Continued initiatives to expand markets in Continued initiatives to expand markets in countries including USA and other countries including USA and other regions/countries (SAFTA, BIMST-EC, APTA, TPS-regions/countries (SAFTA, BIMST-EC, APTA, TPS-OIC, D-8), etc.OIC, D-8), etc.

Negotiations at other multi-lateral, regional and Negotiations at other multi-lateral, regional and bilateral levels for preferential market accessbilateral levels for preferential market access ..

Thank YouThank You