Interest rate cut under consideration as industries struggle: Commerce minister
Abdul Muktadir also said bond licences are currently renewed every three years
The government plans to reduce lending rates to support industries struggling with high costs, as double-digit interest rates and energy shortages continue to weigh on sectors such as textiles, Commerce Minister Khandaker Abdul Muktadir has said.
Speaking today (29 April) at the opening of the four-day Bangladesh International Textile, Knitting and Garment Industry Exhibition 2026 at the International Convention City Bashundhara in Dhaka, the minister said current borrowing costs are unsustainable for labour-intensive industries.
"With loans at double-digit interest rates, it is not possible for industries like textiles to survive, given their high costs. We are aware of this issue. We will reduce the interest rate. It has to be at a level that supports new investment and the growth of ongoing businesses. This is a priority condition," he said.
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He said industries are facing significant pressure due to both high financing costs and energy shortages. "With a cost of funds at 13% to 14%, it is practically impossible for textile or similar labour-intensive, low-margin industries to survive," he said, adding that such rates may be viable for high-tech sectors but not for primary industries.
The minister noted that the current energy shortfall is a major constraint. Against a demand for 4,300 million cubic feet per day, supply stands at around 2,600mmcfd, leaving a deficit of roughly 1,400-1,700mmcfd.
"It is not possible to increase LNG supply overnight," he said, citing infrastructure limitations. He added that Bangladesh currently operates two floating storage and regasification units with a combined capacity of 1,100mmcfd, running at about 90% efficiency and delivering around 935-950mmcfd.
The government plans to expand gas supply by tendering for additional regasification units to support industrial growth, he said.
Highlighting efforts to improve the business environment, the minister said the government will introduce a system to issue provisional licences immediately upon application, allowing businesses to start operations without waiting for full approvals.
"At present, obtaining 25 to 26 licences and clearances can take months or even years," he said, adding that while permanent clearance may still take six months to a year, businesses will be able to begin operations with provisional approval.
He also said the National Board of Revenue is working to simplify the renewal process for bond licences, which are currently renewed every three years.
The exhibition, jointly organised by the Bangladesh Knitwear Manufacturers and Exporters Association and Inforchain Digital Technology Ltd, features around 900 exhibitors from nearly 28 countries across 1,200 booths covering about 20,000 square metres.
Participants from countries including Canada, China, Taiwan, Belgium, France, Hong Kong, India, Indonesia, Japan, Vietnam, Malaysia, Turkey and the United Arab Emirates are showcasing machinery, dyes and chemicals, knitting and weaving technologies, and garment processing equipment.
The exhibition has been jointly organised by the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Inforchain Digital Technology Ltd.
Stakeholders expect the event, which will continue until Saturday, to contribute to technological upgrades, industry modernisation and expansion of international trade.
