B Mirror Report:The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has described the proposed national budget for FY2026-27 as welfare-oriented and business-friendly, saying it reflects a forward-looking approach to sustaining macroeconomic stability, facilitating business, and ensuring long-term policy certainty for investors.

In a budget reaction issued on Saturday night, BGMEA commended the finance minister for formulating a budget that shifts focus from growth-centric policies to broader, inclusive development with the long-term goal of transforming Bangladesh into a trillion-dollar economy by 2034.

The association said the proposed budget has placed significant emphasis on key sectors such as education, healthcare and social protection, making it unique and people-centric. It also welcomed the government’s target of achieving 6.5 percent economic growth in the next fiscal year and identifying 10 priority areas, including investment-led employment, a production-oriented economy, deregulation, financial sector stability and energy security.

According to BGMEA, these priorities are crucial for the country’s industrial and trade development and particularly important in supporting Bangladesh’s transition from the Least Developed Country (LDC) category.

However, the organisation noted that the ready-made garment (RMG) industry is currently facing significant challenges and requires policy support to maintain its competitiveness and contribution to employment and foreign exchange earnings.

BGMEA data showed that during the current fiscal year, export earnings from the RMG sector declined by 3.41 percent, average unit prices fell by 1.55 percent and back-to-back letters of credit (LCs) for raw material imports dropped by 7.93 percent due to the global economic slowdown and rising domestic costs. As a result, nearly 400 garment factories have closed over the past three years.

To support the sector, BGMEA put forward several proposals, including reducing the source tax on garment exports from the existing 1 percent to 0.65 percent and keeping it stable for the next five years, fully exempting income tax on cash incentives, removing dual taxation in subcontracting processes, ensuring specialised corporate tax rates for the sector, and withdrawing proposed additional import duties on polyester staple fibre (PSF), PVC resin and PET resin.

The association stressed that the garment sector remains the country’s largest source of foreign exchange earnings and a major generator of employment. To remain competitive in the post-LDC graduation era, Bangladesh must reduce business costs, ensure uninterrupted and affordable gas and electricity supplies, and simplify customs and port-related procedures.

BGMEA expressed hope that the prime minister and finance minister would positively consider its proposals in line with the budget’s investment-friendly policy direction.