Cash incentive for domestic textile exports raised to 5%
The policy aims to encourage exporters to source more yarn and fabrics locally, with industry stakeholders expecting the move to boost domestic value addition and strengthen the country's competitiveness in global markets.
Highlights:
- Cash incentive increased from 1.5% to 5%
- Applies to exports in FY2026–27
- Move aims to boost domestic value addition
- Exporters must prove local raw material sourcing
Bangladesh Bank has increased the cash incentive for exports of domestically sourced textile products to 5% from 1.5% for FY2026-27, aiming to boost local value addition and strengthen export competitiveness, according to a circular issued today (12 July).
The enhanced support will apply to export-oriented domestic textile products receiving alternative cash assistance instead of bonded warehouse and duty drawback facilities.
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The move is expected to particularly benefit the country's readymade garment sector by encouraging greater use of locally produced yarn and fabrics.
To qualify for the incentive, exporters must meet specific conditions. Members of the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, and other relevant trade bodies will be required to submit documentary proof that their raw materials, including yarn and fabrics, were sourced from domestic suppliers.
Industry stakeholders said the higher incentive would encourage the use of local inputs, increase domestic value addition and enhance the competitiveness of Bangladesh's export sector in global markets.
