Bangladesh Bank has decided to reduce the incentives for exporting products. This decision has been taken keeping in mind the possible transition from the Least Developed Countries (LDC) list.

It was informed in a circular of Bangladesh Bank on Tuesday (January 30). According to the new decision of the central bank, the incentive rate has been reduced in almost all other sectors including readymade garments sector, jute and jute products, leather and leather products, frozen fish, agricultural products. The new guidelines will be effective from January 1 this year. 

It is said in Bangladesh Bank's circular that Bangladesh is going to move from the list of LDCs in 2026. As per World Trade Organization (WTO) rules, no export incentives can be granted on transition from LDCs.

It is also reported that the government has decided to gradually reduce the cash assistance or incentive rate in different stages without stopping the LDC altogether after graduation.

It may be noted that the special cash assistance to the ready-made garment sector has been reduced from 1 percent to 5.5 percent. Besides, no cash assistance will be given on products exported under five HS codes. Incentive rates for new export markets in the sector have been reduced by one percentage point to 3 percent.

Meanwhile, traders and bankers said that 56 percent of the textile sector is exported. Entrepreneurs commented that the exporters of this sector will suffer greatly as a result of such a sudden decision taken by the government.