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Objectives
Bangladesh
Introduction
Overview of Bangladeshs International Trade
Introduction
Overview
Indicator Name
Imports of goods and
services (current million
US$)
Exports of goods and
services (current million
US$)
Trade (% of GDP)
GDP growth (annual %)
1970
1980
1990
2000
2010
2014
747.58
20.82
23.38
18.97
29.32
37.80
44.99
5.62
0.82
5.62
5.29
5.57
6.12
Introduction
Overview
Indicators
FY 2010-11 FY 2011-12
FY 2012-13
FY 2013-14
FY 2014-15
6,46,340
6,88,490
7,29,897
7,74,136
8,24,532
9,15,830
10,55,200
11,98,923
13,43,674
15,13,600
6.01
6.06
6.51
6.46
6.52
Export
1,44,431
1,80,313
1,89,437
2,12,915
2,26,522
Import
2,40,028
2,80,963
2,72,328
3,04,185
3,14,209
Introduction
The
Export
Responsibility for
Approval of all trade related policies, including import and export policies
Domestic and international trade regulation, import and export policy
formulation; tariff policy formulation, and trade policy monitoring, WTO
coordination, regional trade agreements, export promotion, and accounting
services.
Registration of importers and exporters
Export promotion, textile quota administration
Tariff policy, anti-dumping and countervailing investigations, safeguards
Banking services, subsidies, cash incentive
Export finance, banking services, interest rate, subsidies, cash incentive
Customs, pre-shipment inspection, customs valuation, import tariffs and
other duties, tax holidays and tax concessions, duty drawbacks
Ministry of Agriculture
SAARC Agricultural Information Center
Agricultural policy, SPS
Department of Agricultural Extension
Bangladesh Agricultural Research
Council
Ministry of Fisheries and Livestock
Environmental and forest policy
Ministry of Environment and Forest
10
Responsibility for
Textile and jute policy
Industrial policy; Standards and quality control, Industrial
Property Rights
Standardization, quality testing and certification
Registration of patents, industrial designs, and trade marks
Board of Investment
Telecommunications services
Air transport; Tourism
Maritime transport
Energy policy
Poverty Reduction Strategy Paper
Road and rail transport
Copyrights
ACJ Cl
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Million USD
45,000
30,000
25,000
20%
20,000
15,000
0%
10,000
-20%
5,000
0
-40%
Import
Growth (%)
12
40,000
60%
35,000
40%
13
14
15
16
17
18
19
20
21
22
23
H.S.
Heading
03.06
12.07
12.11
13.02
23.07
27.10
27.11
27.13
29.29
29.30
38.08
56.08
24
25
26
ACJ Cl
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Million USD
35,000
50%
30,000
40%
25,000
30%
20,000
20%
15,000
10%
10,000
0%
5,000
-10%
0
-20%
Export
Growth (%)
28
29
30
Nature of Operation
The XPL was introduced in in 1978.it allowed the nontraditional exporters to receive import license. The
export performance Benefit (XPB) scheme replaced the Export Performance Licensing (XPL)/ Import
Entitlement Certificate (IEC) System on July 1, 1985. It allowed the exporters of nontraditional items to cash a
certain proportion of their earnings (known as entitlements) at a higher exchange rate of WES. In 1992 with
the unification of the exchange rate system, the XPB scheme ceased.
Bonded
Private Bonded Warehouses (PBWs) was introduced in 1985. This facility was assisted to exporters of RMG,
Warehouse
specialized textiles such as towels and socks, leather, ceramic, printed matter and packaging materials, who
are required to export at least 70 percent of their produce until 1993. Currently this facility was extended to all
exporters. Exporters of manufactured goods are able to import raw materials and inputs without payment of
duties and taxes. The raw materials and inputs are kept in the bonded warehouse. On the submission of
evidence of production for exports, required amount of inputs is released from the warehouse. The bonded
warehouse licensing reform implemented in May 2008
Duty Drawback A national system of custom and other duty duty payment was adopted in 1982-83. Exporters of manufactured
products are given a refund of customs duties and other taxes such as VAT paid on the imported raw
materials that are used in the production of goods exported. Exporters can also obtain drawbacks on the
value added tax on local inputs going into production. During fiscal year 1995-96, the government, in an
attempt to give incentive to the domestic textile and garments sector, allowed 25% compensatory assistance
to the industries of this sector. The Duty Exemption / Drawback office (DEDO) was established in 1986 in the
National Board of Revenue.
Duty Free
Since 1992, import of machinery and spare parts were made duty and other tax free for export oriented
Import of
industry. Import of machineries without payment of any duties for production in the export sectors.
Machinery
31
Interest Rate
Subsidy
Tax Holiday
Income Tax
Rebate
Retention of
Earnings in
Foreign
Currency
Nature of Operation
Back to back LC facilities were started its journey in 1985-86 (1984). It allowed the exporters to open L/Cs for
the required import of raw materials against their export L/Cs in such sectors as RMG and leather goods. The
system is considered to be one of the most important incentive scheme for the RMG export. The is important
trade financing concept for exporters. The local suppliers can take the advantage of financing by using inland
B2B L/C. these facility was extended to all exporters since in the mid of 1993.
The scheme was introduced in 1986. Since 1986, cash assistance of 15% of export value is granted to
specialized textile products where exporters choose not to use bonded warehouses and duty drawback
facilities. This facility is available mainly to exporters of textiles and clothing who choose not to use bonded
warehouse or duty drawback facilities. Currently, the cash subsidy is 25 percent of the free on board export
value. In recent times, cash subsidies have been offered to agro products exporters.
It allows the exporters to borrow from the banks at lower bands of interest rates of 8-10 percent against 14-16
percent of normal charge.
Tax holiday was in place since mid-70s .Tax Holiday First introduced under the Industrial Policy of 1991-93,
this incentive allows a tax holiday for exporter for 5-12 years depending on various conditions.
Income tax rebate was introduced in early 1980s (1985). Exporters are given rebates on income tax. Recently
this benefit has been increased. The advance income tax for the exporters has been reduced from 0.50
percent of export receipts to 0.25 percent. The total income of small cottage industry is outside the tax.
Exporters are now allowed to retain a portion of their export earnings in foreign currency. The entitlement
varies in accordance with the local value addition in exportable. The maximum limit is 40 percent of total
earnings although for low value added products such as RMG the current ceiling is only at 7.5 percent. The
foreign exchange retention is extended gradually. As of September 2006, exporters are allowed to retain 10%
(with high import content) to 50% (for low import content) of their f.o.b. export earnings in foreign currency
accounts denominated in U.S. dollars, pounds sterling, Deutsche marks, Japanese yen or euros.
32
Nature of Operation
Introduced in 1978 to insure loans in respect of export finance, it provides pre-shipment and post-shipment
(and both) guarantee schemes. Export loan refinancing by Bangladesh Bank in 1984. Commercial banks can
grant export loans from their own funds or from the refinancing facility of the Bangladesh Bank (Pre-shipment
& post-shipment) (& for 100% export oriented industries) in 1983.
Special
In late 70s when individual ownership economy revived in our country EPZ was created to attract capital
Facilities for
investment, employment generation and rapid industrialization. The Bangladesh Export Processing Zone
Export
Authority (BEPZA) was created under EPZA Act no. 36 of 1980. To promote exports, currently a number of
Processing
EPZs are in operation. The export units located in EPZs enjoy various other incentives such as tax holiday for
Zones (EPZs) 10 years, duty free imports of spare parts, exemption from value added taxes and other duties. In 1996
government introduced Bangladesh Private Export Processing Zones Act 1996 where private sectors are
allowed to establish EPZ through its own facilities.
Textile Policy In 1989, the Government announced its first ever textile policy which set as its objective the achievement of
self-sufficiency and development of export potential in textiles and textile goods.
The Unification The unification of exchange rate system 1992.Since 31 May 2003 the government has introduced fully market
of Exchange
based interest rates abolishing the system of flexible exchange rate.
Rate
Refund of VAT The VAT system was introduced on 29 July 1991.To support the export the VAT refunded scheme was
introduced in 1992.
33
34
35
36
Product
Certificate or permit
Any product as required by Certificate of origin
the importing country
Frozen fish
Goods of plant origin
Tea
Pharmaceutical products
Goods for international fairs or
exhibitions
Jute
Goods for repair
Ready-made garments
Live wild animals
Health-cum-quality certificate
Quarantine certificate
Export authorization
No objection certificate
No objection certificate
Bangladesh Bank
CCIE
Bangladesh Bank
Export Promotion Bureau
CCIE
Chief Conservator of Forest
37
38
39
40
41
42
43
44
45
ACJ Cl
47
Tariff reform
The policy of tariff reform and rationalization of tariff structure
was initiated in the late 1980s and reinforced in 1990s.
The first attempt was made to remove anomalies in tariff structure
in FY 1985-86.
Tariff reduction process was accelerated in early 90s.
The highest tariff was brought down from as high as 300% in FY
1991-92 to 50% in FY 1995-96 and again reduced to 40% in FY 198999.
The maximum tariff was further reduced to 25% in FY2005-06.
The number of tariff slabs has come down from 24 in the 1980s to
only 4 in FY 2005-06.
Applied MFN average lowered from 70.6% in 1992 to 14.9% in 2012.
However, at the same time, para tariffs had been increased from
3% to 13%. This had the effect that the rate of protection has
remained stagnant in the past decade at about 28%.
48
Tariff Structure
Average MFN tariffs declined markedly from 70.6% in FY1992 to
28.7% in FY1996 and further to 14.9% in FY2012, they remain
amongst the highest in the region.
Tariffs are ad valorem with few exceptions and are levied on the
c.i.f. value of imports.
Four-tier customs tariff structure.
Duties on basic raw materials, capital machinery and parts,
intermediate goods and finished products are 5%, 3%, 12%, and
25%, respectively.
The 0% rate on commodities like rice, wheat, onions, pulses, edible
oils, seeds, fertilizers, medicines and cotton.
The average rate for agricultural products continues to be higher
than for industrial imports.
Whereas 100% of agricultural tariff lines (WTO definition) are
bound, only 2.7% of industrial tariff lines are bound.
49
Tariff Structure
There are three types of tariff concessions: those on imports of
capital machinery and spares/parts by registered industrial
consumers, including export-oriented industries; those targeting
exporters; and those provided for a specific use or user (i.e. enduse provisions) such as the dairy and poultry, pharmaceutical,
leather and textile industries.
Only 20 HS eight-digit tariff lines are subject to specific duties. A
specific duty on some essential commodities is imposed to reduce
the tax burden on these commodities or minimize the impact of
customs duty on the price in the domestic market due to price
fluctuation. Specific duties are levied on: cement clinkers;
petroleum bitumen; vessels and other floating structures for
breaking up; ferrous waste and scrap; iron and non alloy steel
ingots; semi-finished products of iron or non-alloy steel; and
nonmonetary gold.
50
51
52
53
54
The
Bangladeshs
55
56
Section: 21 Sections
Subheading : (6 Digit-level)
57
58
Concluding Remarks
The
analyses of the IPO and the Export Policy show that these
policies have been developed in isolation. For the greater part the
IPO deals with import control and import policy without reference
to export policy, tariff policy or industrial policy.
The Export Policy has identified some priority sectors on which
special focus is placed for export purposes, but no exports can
take place if the specific industry is not properly developed.
Accordingly, the IPO, the industrial policy and the tariff policy,
amongst others, should be focused on enhancing the
competitiveness of these priority sectors. In the IPO, however,
very little reference is made to any of these sectors.
Several provisions of the IPO deal with imports for the RMG
sector, which is not one of the sectors identified by the Export
Policy, as the sector is already internationally competitive.
Cash incentives are not aligned to the highest priority sectors and
the special development sectors identified in the Export Policy
Analysis of existing trade policy framework of Bangladesh
59
Concluding Remarks
The
For
Thank you !
ACJ Cl