Free raw material import, 3-year bond licence for non-RMG sectors likely
The government is also considering extending to non-RMG exporters the facility of importing raw materials free of cost (FOC) from foreign buyers, a benefit currently available to garment exporters.
The government is considering a package of fresh facilities for non-RMG export sectors in the upcoming budget as part of efforts to diversify exports and reduce dependence on the garment industry.
One of the key measures under consideration is transferring the authority to issue utility declarations (UDs) – which determine exporters' raw material entitlement – from customs bond offices to relevant trade associations. Initially, this authority may be granted to associations representing terry towel and home textile exporters, as well as leather goods exporters.
Under the proposed system, association members would no longer need to visit customs bond commissionerate offices to obtain UDs. Instead, they would be able to secure raw material entitlement certificates directly from their respective associations.
The move is expected to reduce harassment and lower additional business costs.
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The government is also considering extending to non-RMG exporters the facility of importing raw materials free of cost (FOC) from foreign buyers, a benefit currently available to garment exporters.
In some cases, buyers provide the manufacturer the raw materials, and pay only the manufacturing cost.
In addition, the validity period of bond licences for non-RMG exporters may be extended from one year to three years, similar to the arrangement for the garment sector.
According to sources present at a policy-level meeting held at the finance ministry yesterday, these decisions were discussed and approved in principle.
Some of the measures may be formally announced in the upcoming budget proposal, the sources said.
The meeting was attended by Finance and Planning Adviser Dr Rashed Al Mahmud Titumir, the finance secretary and senior officials of the National Board of Revenue (NBR).
An NBR senior official who attended the meeting told The Business Standard on condition of anonymity, "The government's intention is to gradually hand over UD issuance authority to more associations. Initially, considering institutional capacity, the Terry Towel Association and the leather goods exporters' association are likely to receive this authority."
The official added that the government has taken a positive stance on granting FOC facilities to non-RMG exporters.
"To implement this, amendments will be required to the Import Policy Order (IPO), which falls under the jurisdiction of the commerce ministry," he said.
Attempts to contact Dr Rashed Al Mahmud Titumir for comment were unsuccessful.
Currently, while some leather goods exporters enjoy bond licence facilities, they still need to obtain permissions or utility permits (UPs) from customs bond commissionerate offices to import raw materials.
Exporters have long alleged that obtaining each utility permit involves additional costs and unofficial payments. Similar complaints have also been raised regarding the process of obtaining bond licences from customs bond offices.
To address such issues, the authority to issue UDs was previously delegated to the garment sector's two major associations, BGMEA and BKMEA.
Other export associations have since been demanding the same facility.
Non-RMG exporters believe extending the facility to additional associations would help reduce harassment and improve the business environment.
M Shahadat Hossain, president of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, told TBS, "If our association is given the authority to issue UDs for members, it will reduce harassment and lower the additional costs that exporters currently incur."
"This decision will contribute positively to ease of doing business and cost reduction," he said, adding that the association had been advocating for the measure for a long time.
According to data from the Export Promotion Bureau (EPB), Bangladesh exported goods worth $48.28 billion in FY2024-25, of which leather and leather products, along with home textiles, accounted for nearly $2 billion.
Data from Terry Towel and Linen Manufacturers and Exporters Association shows the association has 147 members, including around 50 factories directly engaged in exports.
Shahadat Hossain said easier access to UDs would create opportunities to increase exports and attract new investment into the sector.
