Highlights:
- Cash incentive increased from 1.5% to 5%
- Applies to exports in FY2026–27
- Move aims to boost domestic value addition
- Exporters must prove local raw material sourcing
Bangladesh Bank has raised the cash incentive for exports of domestically sourced textile products to 5% from the previous 1.5% for the fiscal year 2026–27, in a move aimed at strengthening the country’s textile and apparel exports.
The revised incentive rate was announced in a circular issued today (12 July).
The amendment follows FE Circular No. 17, issued by the Foreign Exchange Policy Department (FEPD-1) on 5 July, which enhanced the alternative cash assistance provided instead of bonded warehouse and duty drawback facilities for export-oriented domestic textile products.
The higher incentive is expected to particularly benefit Bangladesh’s readymade garment (RMG) sector by encouraging manufacturers to source more raw materials from local suppliers.
To qualify for the incentive, exporters must meet specific conditions set by the central bank. Members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and other relevant trade bodies will be required to submit documentary evidence proving that raw materials, including yarn and fabrics, were sourced domestically.
Industry stakeholders say the increased incentive is expected to boost domestic value addition, promote greater use of locally produced textile inputs and enhance the competitiveness of Bangladesh’s exports in international markets.
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