Rising targets, stalled reforms: Can Bangladesh deliver on FY26 export goals?
On Tuesday, the commerce ministry set an export target of $63.5 billion for goods and services in FY26 – a 16.5% increase over last year’s goal. In FY25, exports grew 8.5% year-on-year but still missed the target by 7.5%
Year after year, Bangladesh's government announces ambitious export targets. Year after year, exporters and economists question how those goals will be met when long-standing challenges remain largely unaddressed.
On Tuesday, the commerce ministry set an export target of $63.5 billion for goods and services in FY26 – a 16.5% increase over last year's goal. In FY25, exports grew 8.5% year-on-year but still missed the target by 7.5%.
Economists say such targets are rarely based on rigorous research, serving more as political or bureaucratic formalities than practical roadmaps. Exporters argue that the growth that does occur is largely due to their own efforts, with little tangible government support in resolving systemic obstacles.
"Incentives have been cut, and once Bangladesh graduates from LDC status, subsidies may no longer be possible. There's no clear alternative support plan," said Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
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Hatem listed energy shortages, banking complications, customs delays, congested ports, transport bottlenecks, and law-and-order issues as barriers that have persisted for years. He also noted the decade-long delay in establishing a central bonded warehouse to help small exporters import raw materials more efficiently.
The numbers vs the reality
M Masrur Reaz, chairman of Policy Exchange Bangladesh, said that without improvements in trade efficiency, diversification, and market promotion, "merely fixing export targets is pointless." He called for four- to five-year export strategies with concrete timelines for removing bottlenecks.
Commerce Secretary Mahbubur Rahman said the ministry will start meeting with industry leaders next week to identify and address one or two major bottlenecks in each sector.
Issues such as energy crisis, banking complications, customs and port delays, and transportation bottlenecks have gone unresolved for years.
Chronic bottlenecks
Exporters point to persistent gas shortages and severe port congestion. Trucks carrying goods to private inland container depots can wait three to seven days to unload, incurring daily fines of Tk3,000 per truck.
Even when demand exists, some exporters cannot accept new orders because of back-to-back letter of credit (LC) limits. More than half of exporters now face this issue, according to Hatem.
Payment delays for exports create further hurdles. When funds are late – often due to factors outside exporters' control – the central bank flags them, locking their Business Identification Number and halting further shipments.
Customs inefficiencies also continue to disrupt operations. Exporters report that even minor HS code errors can lead to 200% penalties and long delays in moving raw materials into production.
Despite years of talk about diversification, dependence on apparel has increased – from 80% to 85% of total exports last fiscal year.
Without focusing on efficiency in trade operations, product and market diversification, and market promotion, merely fixing export targets is pointless.
Global headwinds
Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), called the FY26 target "highly ambitious" given current global trade dynamics.
He warned that while US tariff changes may shift orders toward Bangladesh, they will likely come with lower prices. Competition will intensify in the EU as other exporters divert goods there, driving prices down.
He also noted reduced land port access for exports to India and potential market erosion in the UK following a trade deal granting India immediate tariff advantages.
Despite getting a good deal, the hard truth is that in the US market, tariffs will increase. This would shrink the US market size.
Conditional optimism
Despite the obstacles, industry leaders say the target could be achieved if domestic constraints are resolved.
BGMEA President Mahmud Hasan Khan Babu said many factories are running below capacity. "If the gas crisis, banking instability, customs inefficiencies, and law-and-order problems are fixed, we can exceed the government's target," he said.
Hatem echoed the sentiment: "If these problems are solved, we can export more than the target."
