Budget measures to benefit RMG industry: BGMEA

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has applauded the government announcement to keep the source tax on exports and corporate tax for industries unchanged in the proposed budget for the fiscal year 2025-26. 

The current budget is particularly significant for the ready-made garment (RMG) sector, which faces immense pressure from local and international challenges, including recent US retaliatory tariffs, India's cancelled transhipment, high bank interest rates, rising wages, and frequent increases in gas and electricity prices, the BGMEA said in a press release after the budget proposals presented by Finance Adviser Salehuddin Ahmed today (2 June).

In a positive development for industry, the budget outlines plans to reduce the overall cost of electricity generation by 10% to gradually decrease subsidies in the power sector, said the BGMEA. Furthermore, a decision has been made not to raise electricity prices shortly to control inflation, which the BGMEA deems a highly beneficial step for industries, it said.

The association said that with Bangladesh set to graduate from LDC status in 2026, the RMG industry, contributing 84% to exports, anticipates even greater challenges. In this context, the BGMEA had submitted several budget proposals aimed at addressing current issues and maintaining the industry's competitive edge post-graduation, it said.

The BGMEA also welcomed proposals for a Tk125 crore fund for women entrepreneurs, Tk200 crore for research to leverage blue economy potential, Tk100 crore to combat climate change risks, and another Tk100 crore special fund to create young entrepreneurs.

The association said if inflation eases down to 6.5%, as a target set the budget, it will be beneficial to low-income individuals, including garment workers. It also lauded proposals to increase both the amount and number of beneficiaries under certain social safety net programmes.