Who gains from FY27 budget's raw-material duty hikes?

The government has proposed increases in import duties on several industrial raw materials in the proposed FY2026-27 budget, aiming to support domestic manufacturers. 

However, businesses that depend on those inputs warn the measures will raise production costs, erode competitiveness and ultimately be passed on to consumers through higher prices. 

Under the proposed Finance Bill, the import duty on PVC resin and PET resin has been doubled from 5% to 10%, while the duty on polyester staple fibre has been increased from 1% to 5%. 

Industry stakeholders argue that local producers are still unable to fully meet domestic demand and often sell at higher prices than imported alternatives. 

Who benefits?

They say the duty hikes are likely to benefit a small number of domestic manufacturers, particularly Meghna Group and TK Group. 

Meghna Group's Meghna PVC Limited produces both PVC and PET resins, and the higher duties could strengthen its position in the local market. 

However, BM Islam, senior executive director of Meghna Group, rejected claims that domestic supply is insufficient. 

"We can meet around 65% of PVC resin demand and nearly 100% of PET resin demand. If demand rises, we can further expand production," he told The Business Standard.

In the polyester staple fibre segment, TK Group's Modern Poly Industries Ltd and Modern Syntex are the country's leading producers. 

A senior company official, speaking on condition of anonymity, said their production capacity is equivalent to about 48% of domestic demand. 

"A 5% duty is not excessive protection. If Bangladesh wants to build local industries, some level of protection is necessary. Otherwise, we will remain dependent on imports," he said.

He added that developing a stronger domestic raw-material base will become increasingly important after Bangladesh graduates from least-developed country (LDC) status and faces stricter local value-addition requirements. 

Textile mill owners, however, argue that higher input costs for downstream manufacturers could undermine competitiveness, discourage local production and increase reliance on imported finished goods.