High tariffs on raw materials hinder export diversification in Bangladesh: Economist | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Thursday
July 24, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
THURSDAY, JULY 24, 2025
High tariffs on raw materials hinder export diversification in Bangladesh: Economist

Economy

TBS Report
13 September, 2023, 09:50 pm
Last modified: 13 September, 2023, 09:56 pm

Related News

  • Dhaka proposes third-round tariff talks on Sunday, awaits US response
  • Tariff deal: Dhaka to submit draft today, US yet to confirm meeting date
  • Things don’t look good for Bangladesh: US brands warn exporters amid tariff hike
  • US tariff: 3rd round talks to be held on issues under non-disclosure agreement 
  • US wants a framework agreement with Bangladesh that includes their security concerns: Fouzul

High tariffs on raw materials hinder export diversification in Bangladesh: Economist

Bangladesh’s nominal tariff is 27.6%, whereas it is 22.4% in Sri Lanka, 18.1% in India, 9.7% in Thailand, 9.6% in Vietnam, 5.6% in Malaysia, and 8% in Indonesia

TBS Report
13 September, 2023, 09:50 pm
Last modified: 13 September, 2023, 09:56 pm
An aerial view of Chattogram Port. File Photo: Mohammad Minhaj Uddin/TBS
An aerial view of Chattogram Port. File Photo: Mohammad Minhaj Uddin/TBS

Bangladesh's high tariffs on the import of raw materials are a major barrier to the diversification of its export baskets, economist Zaidi Sattar said at a seminar on Wednesday.

"Bangladesh's average nominal tariffs are currently higher than the average tariffs of low-income, middle-income, and high-income countries, as well as those of most competitors," said Zaidi Sattar, chairman of the Policy Research Institute of Bangladesh (PRI).

In a keynote presentation, he mentioned that Bangladesh's nominal tariff is 27.6%, whereas it is 22.4% in Sri Lanka, 18.1% in India, 9.7% in Thailand, 9.6% in Vietnam, 5.6% in Malaysia, and 8% in Indonesia.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The Bangladesh Institute of Development Studies (BIDS) organised the seminar titled "Tariff Protection and Export Diversification Are Not Mutually Exclusive: The Bangladesh Phenomenon" at its office in the capital.

Chaired by BIDS Director General Binayak Sen, Salehuddin Ahmed, former governor of the Bangladesh Bank, and Ferdaus Ara Begum, chief executive officer of the Business Initiative Leading Development (BUILD), among others, spoke at the event.

"Tariffs are now the principal instrument of protection, serving as an incentive for import-substitute production," Zaidi Sattar said, emphasising that high tariffs are a critical requirement for sustaining so-called infant industries without regard to their period of establishment or the efficiency implications of long-term protection.

He said almost all consumer goods produced domestically have the benefit of extremely high and differentiated levels of nominal and effective protection.

He said typically, nominal tariffs on outputs (mostly consumer goods) are significantly higher than tariffs on inputs; depending on how much value addition is generated by each firm or sector, effective rates of protection for most import substitutes could range from 100% to 400% or more.

Even anti-export bias policy is also one of the bottlenecks for export diversification, pointed out the economist.

According to him, Bangladesh exports 1,377 non-readymade garment products, with 174 products considered highly competitive, 408 items moderately competitive, and 795 items marginally competitive.

He said Bangladesh exports 346 non-RMG products, generating approximately $1 million in annual revenue, yet these sectors do not have access to bonded warehouse facilities.

"These products can play a significant role in enhancing export diversification if they are brought under bonded warehouse facilities," he noted.

He said products from the jute industry, the leather goods industry, and home textiles are highly competitive in the world market.

However, he said the National Tariff Policy 2023 opens doors for export diversification.

According to him, the focus of the policy will be on such import taxes as customs duty, regulatory duty, and supplementary duty, which are not "trade neutral".

But value-added tax (VAT), advance income tax, and advance VAT are considered trade neutral and are not under the purview of the tariff policy, he said.

However, the economist pointed out that export diversification, the increase in the share of various non-RMG exports in the export basket, has not gained traction despite two decades of policy focus on "thrust sectors", "high-priority sectors", and "special development sectors".

He said Bangladesh is adopting various policies and gearing up to address upcoming challenges as well as opportunities that will befall this rapidly developing economy leading up to and beyond the period of post-LDC graduation.

Of them, the tariff policy is clearly one of them focused on sustaining export expansion and diversification (products and markets), he said.

Zaidi Sattar said non-RMG exporters can now compete in the world market purely on the basis of labour cost advantages.

"This approach would immediately minimise the phenomenon of trade policy dualism that characterises our current trade policy - one policy for the RMG sector and another for the rest," he added.

Regarding non-RMG exports, the PRI chairman stated that the current incentive system makes sales in the domestic market far more lucrative than exporting, which demands substantial effort but yields low profit margins.

According to him, the tariff policy acknowledges that industrial protection is deeply rooted in Bangladesh's economic policy and practice.

Tariffs and para-tariffs are now the principal instrument of protection, which is the way to grant incentives to import substitute production, he added.

Salehuddin Ahmed, former governor of the Bangladesh Bank, stressed the need for cash incentives and other benefits, such as bonded warehouse facilities, to promote export diversification.

He said relying solely on the tariff policy will not be sufficient for the expansion of export diversification.

Ferdaus Ara Begum alleged that several sectors with the potential to contribute to export diversification do not have access to bonded warehouse facilities.

She suggested providing them with the facility rather than incentives

Top News

tariff / Import - Export / Raw material

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • BB asks female staff to wear 'modest' attire, discourages short-sleeved or length dresses, leggings
    BB asks female staff to wear 'modest' attire, discourages short-sleeved or length dresses, leggings
  • Representational image. Photo: Collected
    US yet to confirm third-round talks as tariff deadline looms
  • File photo of BNP Chairperson Khaleda Zia arriving at the Evercare Hospital from her Gulshan residence on 18 June 2025. Photo: UNB
    Khaleda Zia taken to Evercare Hospital for late night medical check-up

MOST VIEWED

  • Photo: Collected
    Bangladeshi man jailed for life in UK for murdering wife in front of their baby
  • Ctg port authority halts contractor recruitment for Kamalapur ICD operations for two months
    Ctg port authority halts contractor recruitment for Kamalapur ICD operations for two months
  • Fire at Cosmo School in Mirpur on 23 July 2025. Photo: TBS
    Fire breaks out at Cosmo School in Mirpur following generator explosion
  • Representational image. File Photo: Rajib Dhar/TBS
    Debate arises as edu adviser says postponed HSC exams of 22 and 24 July will be held on same day
  • The Government Seal of Bangladesh
    Govt mulls allowing trade unions with 20 workers, industry leaders warn of disorder
  • Photo: CA Press Wing
    Stronger stance needed on maintaining law and order: Political parties to CA

Related News

  • Dhaka proposes third-round tariff talks on Sunday, awaits US response
  • Tariff deal: Dhaka to submit draft today, US yet to confirm meeting date
  • Things don’t look good for Bangladesh: US brands warn exporters amid tariff hike
  • US tariff: 3rd round talks to be held on issues under non-disclosure agreement 
  • US wants a framework agreement with Bangladesh that includes their security concerns: Fouzul

Features

Photo: Collected

24 July: More than 1400 arrested, 3 missing coordinators found

6h | Panorama
Photo: Mehedi Hasan/TBS

Aggrieved nation left with questions as citizens rally to help at burn institute

1d | Panorama
Photo: Mehedi Hasan/TBS

Mourning turns into outrage as Milestone students seek truth and justice

1d | Panorama
Illustration: TBS

Uttara, Jatrabari, Savar and more: The killing fields that ran red with July martyrs’ blood

2d | Panorama

More Videos from TBS

ISPR reports 31 dead, official tally 29

ISPR reports 31 dead, official tally 29

7h | TBS Today
13 political parties meet with chief advisor; urge to announce election date

13 political parties meet with chief advisor; urge to announce election date

8h | TBS Today
Bangladesh and Pakistan unite to fight drugs

Bangladesh and Pakistan unite to fight drugs

9h | TBS Today
Case Study of Milestone Tragedy

Case Study of Milestone Tragedy

9h | TBS Today
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net