During the first half of the current fiscal year 2025–2026 (July–December), the government has continued to provide export incentives and cash assistance in forty-three sectors. Depending on the commodity, the rate of cash aid and export incentives for exported items has been raised from 0.30 percent to a maximum of 10 percent. Bangladesh Bank has released a notification in response to the government’s decision.

According to sources, the government has extended by an additional six months the deadline for the full removal of financial incentives in the export industry for three reasons. It was scheduled to go into effect in July of next year. It has now been rescheduled for December.

The source indicated that the reason for the postponement of this deadline is due to the high tariffs imposed on Bangladeshi goods by US President Trump, India’s restrictions on the export of Bangladeshi products via land ports, and the instability in the industrial sector following last year’s political changes.

Over the past seven fiscal years, the total incentives allocated to the export sector amounted to Tk 46,715 crore, with the export-oriented ready-made garment industry receiving the majority (over 80 percent) of this financial support.

Last year, the former Awami League government implemented a two-phase reduction of export incentives. At that time, it was announced that Bangladesh would achieve developing country status by 2026 after graduating from the LDC list. According to World Trade Organization (WTO) regulations, no export incentives or cash assistance can be provided post-graduation from the LDC. If assistance is completely withdrawn after graduation, the export sector will encounter difficulties. Consequently, the government has opted to gradually reduce the assistance.

The ready-made garment and textile sector is the primary beneficiary of the cash assistance. Exporting ready-made garments made from domestic yarn to new markets will receive a maximum incentive of 5.9 percent, down from 9.1 percent prior to June of last year.

Currently, the second-largest export sector in the country is leather and leather products. Until December 31, there will be a 10 percent incentive for leather product exports and a 6 percent incentive for crust and finished leather. Additionally, a 10 percent cash assistance will be available for processed agricultural products.

According to exporters from the knitwear sector owners’ association BKMEA, dealers must go through a lot of work in order to receive financial support for exports. The government can lessen this by offering exporters incentives in the same manner that it does for remittance revenue. They claimed that India, our rival nation, is promoting investment through a variety of incentives. But in Bangladesh, the reverse is taking place. In the meantime, incentives have decreased in spite of rising expenses and new difficulties.