B Mirror Report: The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the government to allow newly established factories to import raw materials under the Free of Cost (FOC) facility provided by foreign buyers.

In a letter sent to the Secretary of the Ministry of Commerce on April 27, BGMEA requested necessary directives to grant such approval. The letter was also forwarded to the National Board of Revenue (NBR).

According to BGMEA, international buyers frequently place export orders in the apparel sector on an FOC basis, supplying raw materials without cost. At a time of foreign currency constraints, this arrangement could prove highly beneficial for the country.

Under the FOC system, manufacturers are not required to open back-to-back letters of credit against foreign currency, allowing the full export proceeds to remain in the country. Additionally, since imports and exports under this system are conducted through bonded warehouse facilities, which are registered and audited, risks of duty evasion or money laundering remain minimal.

However, despite the Import Policy Order 2021–2024 allowing new factories to import up to six months’ worth of raw materials based on production capacity, the absence of clear directives in relevant statutory regulatory orders (SROs) issued by the NBR has left new enterprises unable to access the FOC facility.

BGMEA warned that this limitation is hindering the acceptance of new export orders, potentially affecting export growth and reducing opportunities for foreign currency earnings.

The association cited the case of Gazipur-based Angel Grace Fashion Ltd, a newly licensed export-oriented garment factory. Despite having secured FOC-based export orders worth approximately $1.65 million, the company has been unable to proceed due to import-related complications.

The letter noted that if the situation persists, the company could face financial losses, and the payment of wages and benefits for around 1,300 workers may become uncertain.

In this context, BGMEA has called on the Ministry of Commerce to instruct the NBR to take necessary measures, in line with the import policy, to allow new factories to import raw materials under the FOC facility in the interest of the country’s export trade.