[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Trade with China and India: is there any shift?

Whether the political change in Bangladesh on August 5 has made an impact on the country's bilateral trade with India is a matter of discussion for understandable reasons. The media has already shed light on the matter, linking it with the deterioration of overall bilateral relations between the tw

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Trade with China and India: is there any shift?
Asjadul Kibria
Published :
Mar 15, 2025 23:29
Updated :
Mar 15, 2025 23:29

Whether the political change in Bangladesh on August 5 has made an impact on the country's bilateral trade with India is a matter of discussion for understandable reasons. The media has already shed light on the matter, linking it with the deterioration of overall bilateral relations between the two countries. In the discussion, the trend of bilateral trade with China has also emerged as an important factor. Some are eager to show that the country's bilateral trade with China is rising as it is declining with India after the ouster of the Hasina regime through a mass uprising led by students.

There is no doubt that India heavily backed the Hasina regime. Bangladesh's closest and biggest neighbour has also supported the now-ousted regime since 2009. The regime's fall is considered a setback for New Delhi, which is yet to accept the new reality in Bangladesh. India's unwillingness to accept the new reality in Bangladesh is clear. The strong allegation is also there that the BJP-led Indian government is trying to destabilise the interim government through various means. Indian media is also continuously spreading misinformation and disinformation against Bangladesh, adding fuel to anti-India sentiment.

On the other hand, Beijing signals its readiness to work with Bangladesh despite the changes, which is a promising development that is making China more popular with most Bangladeshis. There is also a move to enhance bilateral trade, which is reflected in a further increase in imports from China, marking a potential invigoration of Bangladesh economy.

Bilateral trade with India has increased significantly in the last decade with some fluctuations. Gone are the days when the trade deficit with India was a matter of disappointment. Bangladesh continues to source various raw materials and intermediate goods from the neighbouring country mainly due to geographical proximity and historical links. Bangladesh is also used to import food items and consumer goods from India. The major import items include textiles and textile articles, vegetable products, prepared foodstuffs, products of the chemical or allied industries, mineral products, machinery and mechanical appliances, electrical equipment, etc, to meet domestic demands.

Nevertheless, the size of Bangladesh's economy has been continuously growing over the decades. So, higher and diverse demand for various products and items has gradually made China the main import source. Currently, around one-fourth of the country's total imports are sourced from China, and this is not a unique feature for Bangladesh. Today, one-tenth of global imports are sourced from China. The United States of America (USA) is ahead of China, supplying around 13 per cent of global imports. Though India is the eighth top global importer, it still provides less than three per cent of global imports of goods.

The rise of China as a global export powerhouse started to become evident at the beginning of the current century. However, the background work was done more than three decades before that. During the 1970s, China started a set of reforms to transform its economy from a communist model to a market economy mixed with socialism. So, the country also started to open up to the world gradually. At that time, China's share of global trade was less than one percent.

During the first decade of the current century, two critical events pushed China to become a global manufacturing powerhouse. One is the emergence of global value chains (GVCs), a system where different stages of production are spread across different countries to take advantage of their unique strengths, and another is China's accession to the World Trade Organization (WTO). Using the leverage of intertwined events, China has become a global trade giant at a rapid pace that no country has been able to attain so far. India was far behind in this regard due to the country's slow pace of trade liberalisation coupled with inadequate reforms to transfer it into a full-fledged market economy.

Bangladesh's bilateral trade with China started to surge at the beginning of the second decade of the current century. Though China offers flexible market access, Bangladesh has yet to tap it for various reasons, so the country's exports to China have yet to reach the $1 billion level. But, imports from China continued to grow, ballooning the trade deficit with the world's second-biggest economy. In the last fiscal year (FY24), Bangladesh's trade deficit with China reached around $16 billion. In contrast, the trade deficit with India was recorded at $7.44 billion.

Undoubtedly, intensified anti-Indian sentiment in Bangladesh cast a shadow on bilateral trade to some extent. As reported in some media, the country's imports from India have declined following the call for boycotting Indian products. After the 12th national parliament election in January last year, in which Hasina secured a fourth term while the opposition boycotted the polls, a massive 'India Out' campaign was launched as a protest against India's interference in Bangladesh politics. The campaign forced many stores to remove Indian goods from shelves. During the July uprising, a period of significant civil unrest, anger against India intensified for its persistent backing of Hasian's oppressive move to curb the protest movement. After the fall of Hasina, anti-Indian sentiment burst across the country, which is also reflected in the reduction of imports from India, according to some media reports. These reports also linked the rise in imports from China with the decline in imports from India last year.

It is, however, not easy to suddenly change the source of import on a large scale, as finding the alternative source requires some time. Statistics available from Bangladesh Bank showed that imports from India increased by 15 per cent in the last quarter of 2024 compared to the same quarter of 2023. At the same time, imports from China increased by 6.60 per cent.

Looking at the decade-long data provides more insights into the rise in imports from China than India. In FY10, imports from China accounted for around 55 per cent of combined imports from China and India. The ratio increased to 60 per cent in FY20 and further increased to 67 per cent in the first half of FY25. It means there is a linear trend, with some fluctuations in imports from China and India. Again, the ratio of imports from China was 26 per cent of the total imports in Bangladesh in FY23, which increased to 26.31 per cent in FY24 and 28.32 per cent in the first half of FY25. The ratio of imports from India was 13.90 per cent in FY23, which also increased to 14.23 per cent in FY24 but dropped slightly to 14 per cent in the first half of FY25.

Thus, the latest fluctuation in imports from India is not entirely linked to the deterioration of the bilateral relation, which is also reflected in the export trend. According to Bangladesh Bank statistics, Bangladesh exports to India increased to $502 million in the last quarter of 2024 from $391.20 million in the third quarter of the last year. At the same time, exports to China increased to $171.40 million from $155.80 million respectively. So, the buzz that the Indo-Bangla trade is shifting fast to the Sino-Bangla trade is misleading.​

 

[Saif]

CPD wants budget anchored in economic stability

Restoring macroeconomic stability should be the top priority for policymakers amid a challenging environment for the interim government, the Centre for Policy Dialogue (CPD) wrote in its budget recommendations yesterday.

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CPD wants budget anchored in economic stability

Restoring macroeconomic stability should be the top priority for policymakers amid a challenging environment for the interim government, the Centre for Policy Dialogue (CPD) wrote in its budget recommendations yesterday.

"This requires targeted interventions to address inflationary pressures, stabilise the exchange rate, and ensure fiscal prudence," it said.

The think-tank presented its recommendations for the upcoming national budget for fiscal year (FY) 2025-26 at the CPD office in Dhaka.

The CPD said that the interim government inherited an economy characterised by high inflation, subdued revenue collection, sluggish budget implementation, a liquidity crunch in the banking sector, and fast-depleting foreign exchange reserves.

Fahmida Khatun, executive director of the CPD, remarked, "The upcoming budget must prioritise the protection of vulnerable and disadvantaged groups and economic recovery.

"Short-term corrective actions are needed, along with medium-term reforms in resource mobilisation, public finance management, and spending efficiency," she said.

DO NOT HIKE GAS PRICES

The CPD proposed not hiking gas prices, saying it would adversely impact the inflation scenario -- particularly concerning non-food items.

The warning was sounded as consumer prices, despite easing in the last two months, have stayed over 9 percent since March of 2023, eroding purchasing power, especially for low-income households.

Last month, the Bangladesh Energy Regulatory Commission proposed increasing gas prices for new industries to Tk 75.72 per cubic metre, up from the current Tk 30, which drew widespread opposition.

"At this stage, if the proposal to hike gas prices is accepted, it will likely impact inflation adversely. The uncertainty in the global economy owing to the tariff war might add to this," Fahmida added.

The Bangladesh Bank's target to contain inflation within a 7-8 percent range by end-June 2025 is likely to be missed if gas prices are raised, she said.

RAISE TAX-FREE INCOME LIMIT TO TK 4 LAKH

The CPD also recommended raising the tax-free income threshold to Tk 4 lakh in the next fiscal year's budget to ease the burden on taxpayers amid high inflation.

Currently, the tax-free income threshold stands at Tk 3.50 lakh, which was set in the current fiscal year.

"Inflation eased in the last three months, perhaps due to the seasonal effects and policy intervention. However, it rose earlier in the current fiscal year. Furthermore, food inflation rates were substantially greater in rural areas than in cities," Fahmida said.

"People are depleting their savings to buy food. In this situation, we believe it [raising the floor] will be logical."

ALLOCATE BUDGET FOR JULY UPRISING INJURED AND MARTYRS

The CPD recommended allocating financial assistance in the upcoming national budget to support the families of those killed and injured in the July uprising last year, which led to the ouster of the Awami League government.

"During the July movement, nearly 1,400 people were killed, and 14,025 others were injured," said Khatun, citing reports from the Office of the United Nations High Commissioner for Human Rights.

"It is crucial to allocate funds for these individuals and their families."

The think tank also urged the interim government to introduce a scholarship programme to finance the education of those injured or disabled during the uprising until they complete their undergraduate degrees.

OVERHAUL NBR, REVISE VAT CUTS

The CPD also called for reforms to the National Board of Revenue (NBR), including developing a modern tax structure, digitisation, creating a consistent tax policy, and establishing a hassle-free tax payment system.

Besides, the CPD recommended withdrawing a 5 percent value-added tax (VAT) on tuition fees for English-medium schools.

Furthermore, CPD suggested exempting all taxes on imported books.

It also proposed reducing the corporate tax rate for private universities, medical colleges, dental colleges, engineering colleges, and institutions offering information technology education from the existing 15 percent to 10 percent.

TRUMP'S TARIFF WAR WON'T HELP BANGLADESH

At the event, Prof Mustafizur Rahman, a distinguished fellow of the CPD, rejected the notion that Donald Trump's return to power and his tariff policies would open new export opportunities for Bangladesh.

Instead, he cautioned that Bangladesh's export prospects could become "constrained and stagnant".

"There is an assumption that the tariffs on China could benefit Bangladesh, as we are competitors in the US market," Rahman said.

"However, after the US imposed a 25 percent tariff on China in 2016, our exports to the US initially declined, despite a rebound this year. So, I don't believe there is a direct benefit for us," he added.

One key reason is that China's ready-made garment (RMG) exports to the US largely consist of man-made fibre garments rather than cotton-based products.

"In contrast, Bangladesh's RMG exports are almost entirely cotton-based. Therefore, in the market segment where China faces tariffs, Bangladesh does not directly compete with them.

"It is crucial to recognise the diversity within the RMG sector when analysing these trends," he said.

Secondly, various economists have pointed out that the tariff war initiated by Trump could have a negative impact on global economic growth, including that of the United States, Rahman said.

"A slowdown in US economic growth would reduce consumer demand and contribute to inflation, ultimately leading to a decline in overall import demand," he said.

For export-dependent countries like Bangladesh, this means that demand for products in the US market could also be negatively affected.

This ongoing global tariff war could have far-reaching adverse effects on global growth. The potential decline in US economic growth and demand could limit and even stagnate our export opportunities.

"Such a situation is undesirable," Rahman said.

"We hope that ongoing discussions, including those between Canada and the US, will prevent this situation from worsening further. If the situation deteriorates, it will not yield any positive outcomes for the global economy or Bangladesh."​

 

[Saif]

Nothing to be disappointed over country’s economic aspects: Dr Salehuddin

Finance adviser Dr Salehuddin Ahmed on Tuesday said that there is nothing to be disappointed over the various aspects of the country’s economy. “About the economy, I know very well what is happening inside. So, there is nothing to be disappointed,” he said. The finance adv

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Nothing to be disappointed over country’s economic aspects: Dr Salehuddin
BSS
Published :
Mar 18, 2025 20:05
Updated :
Mar 18, 2025 20:05

Finance adviser Dr Salehuddin Ahmed on Tuesday said that there is nothing to be disappointed over the various aspects of the country’s economy.

“About the economy, I know very well what is happening inside. So, there is nothing to be disappointed,” he said.

The finance adviser was briefing reporters after chairing two separate meetings on the Advisers Council Committee on Economic Affairs and Government Purchase, held at the Cabinet Division Conference Room at Bangladesh Secretariat today.

When asked about Bangladesh’s preparations over the LDC graduation in 2026, he said that the government has been pursuing a Smooth Transition Strategy (STS) in this regard. “Smoot doesn’t mean a fall all on a sudden rather like the descent of an airplane and we’re approaching it,”

The finance adviser said that many countries are looking forward to Bangladesh since the performance of the country is overall satisfactory despite some flaws. “Even many countries are saying that if we can do that, then they will become encouraged. We’ll also see that our pride will be increased. Perhaps some preparations may be needed, but we’re taking such preparations,”

Replying to another question, he said that the congestion in unloading of goods has been cleared at the Chattogram Port.

When asked about the availability of edible and soybean oil in the market, he said that the issue is under attention of the government, saying that the businessmen often pursue many ways …. “But, we’re trying our best in this regard. No matter the businessmen became clever, we’ll have to be more intelligent to deal with the situation.”

Replying to another question, the finance adviser said that the Ministry of Commerce has been advised to look into the matter while the ministry and also the commerce adviser are managing it properly.

When asked whether the recent statement on Bangladesh made by Director of National Intelligence of the US Tulsi Gabbard, would impact the bilateral relationship, Dr Salehuddin Ahmed said that it would not impact Bangladesh’s economy in terms of multilateral or bilateral relations.

Regarding a recent article on Bangladesh by a journalist from The Guardian, the finance adviser said, “Earlier, we were on the verge of a ditch. But, now we’ve turned around and moving forward”.

He also said, “They write a lot of things. Does everyone from outside know everything? They write with their own perspectives and opinions.”​

 

[Saif]

The legacy of colonialism & the rise of billionaire oligarchy: a call for economic justice

In a world increasingly defined by extreme wealth and deepening inequality, the 2025 Oxfam report, "Takers, Not Makers", sheds light on the stark realities of a global economic system that perpetuates injustice. The report reveals how the wealth of the world's wealthiest individuals has skyrocketed

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The legacy of colonialism & the rise of billionaire oligarchy: a call for economic justice
Matiur Rahman
Published :
Mar 18, 2025 22:39
Updated :
Mar 18, 2025 22:44

In a world increasingly defined by extreme wealth and deepening inequality, the 2025 Oxfam report, "Takers, Not Makers", sheds light on the stark realities of a global economic system that perpetuates injustice. The report reveals how the wealth of the world's wealthiest individuals has skyrocketed while billions of people continue to struggle with poverty, hunger, and the devastating impacts of climate change. At the heart of this inequality lies the enduring legacy of colonialism, a system that has shaped the modern world in ways that continue to benefit the wealthy few at the expense of the many.

The report paints a grim picture of a world where billionaire wealth is growing at an unprecedented rate. In 2024 alone, billionaire wealth increased by $2 trillion, with 204 new billionaires created-an average of nearly four new billionaires every week. This growth is three times faster than in 2023, and if current trends continue, the world could see five trillionaires within a decade. Meanwhile, the number of people living in poverty has barely changed since 1990, with 3.6 billion people still living below the World Bank's poverty line of $6.85 per day.

Contrary to the popular narrative that extreme wealth is a reward for talent and hard work, the report reveals that 60 per cent of the billionaire wealth is unearned. This wealth is derived from inheritance, cronyism, corruption, or monopoly power. In 2023, for the first time, more billionaires gained their wealth through inheritance than through entrepreneurship. This trend is creating a new aristocracy, where extreme wealth is passed down through generations, largely untaxed. Two-thirds of countries do not tax inheritance to direct descendants, and half of the world's billionaires live in countries with no inheritance tax at all.

The rise of monopolies has further exacerbated this inequality. Monopolistic corporations, such as Amazon and Aliko Dangote's cement empire, dominate markets, set prices, and exploit workers, driving up the wealth of their billionaire owners. Oxfam calculates that 18 per cent of billionaire wealth comes from monopoly power. This concentration of wealth and power in the hands of a few undermines competition, stifles innovation, and perpetuates inequality.

To understand the nature of today's inequality crisis, the report argues, we must confront the long shadow of colonialism. Colonialism, both historical and modern-day, has shaped the global economy in ways that continue to benefit the richest people in the Global North at the expense of the Global South. Historical colonialism, characterised by the formal occupation and domination of rich countries over poorer nations, was a period of brutal wealth extraction. The richest elites in colonial powers, such as the UK and Belgium, were the prime instigators and beneficiaries of this system. For example, between 1765 and 1900, the richest 10 per cent in the UK extracted $33.8 trillion (in today's money) from India alone-enough to carpet the surface area of London in £50 notes almost four times over.

The legacy of colonialism is not just a historical footnote; it continues to shape the modern world. The report highlights how the global economy is still structured to extract wealth from the Global South to the Global North. In 2023, the Global South paid over $30 million an hour to the richest 1 per cent in the Global North through the global financial system. This extraction is facilitated by global institutions such as the World Bank, the International Monetary Fund (IMF), and the United Nations Security Council (UNSC), which remain dominated by wealthy nations. For example, an average Belgian citizen has 180 times more voting power in the World Bank than an average Ethiopian.

The report underscores the profound human cost of this deeply unequal system. Colonialism and its legacies have created a world torn apart by racism, division, and exploitation. Poisonous ideas of racial hierarchy, which underpinned historical colonialism, continue to shape societies today. In Australia, a third of First Nations peoples are in the poorest 20 per cent of the population, and they earn, on average, 72 per cent of what non-Indigenous Australians earn. In South Africa, nearly 30 years after the end of apartheid, white South Africans still earn three times more than their Black counterparts.

Colonialism has also entrenched gender inequality. Women in colonised societies lost power and economic autonomy with the arrival of colonial cash crops and were excluded from the global marketplace. Customary laws enshrined during the colonial period often reinforced European notions of gender roles, and women's existing political leadership was disregarded. Today, countries that were colonised by Britain are more likely to have laws criminalising homosexuality, reflecting the imposition of colonial social norms.

The economic engines of extraction continue to drive inequality. Global supply chains and export processing industries, often dominated by multinational corporations, exploit workers in the Global South, particularly women. Wages in the Global South are between 87 per cent and 95 per cent lower than wages in the Global North for work of equal skill. Between 1995 and 2015, the Global North extracted $242 trillion from the Global South through unequal exchange, perpetuating dependence and exploitation.

The report concludes with a powerful call for systemic change to address the root causes of inequality and injustice. It argues that the fight against modern-day colonialism must be a central focus of global efforts to create a more equitable world. Governments and institutions must take bold action to radically reduce inequality, repair the wounds of historical colonialism, and end systems of modern-day exploitation.

First, governments must set global and national goals to reduce inequality. The report proposes a global inequality goal that dramatically reduces inequality between the Global North and the Global South, with the incomes of the richest 10 per cent no higher than the poorest 40 per cent. This would require progressive taxation, investment in public services, and policies to ensure fair wages and labour rights.

Second, former colonial governments must acknowledge and formally apologise for the crimes committed under colonialism and provide reparations to the victims. The cost of these reparations should be borne by the wealthiest individuals and corporations that have benefited the most from colonialism. Reparations are not just about financial compensation; they are about restitution, rehabilitation, and ensuring that such injustices are never repeated.

Third, global institutions such as the IMF, the World Bank, and the UN must undergo radical governance reforms to end the dominance of wealthy nations and corporations. These institutions must prioritise the needs of the Global South and promote economic sovereignty, fair trade, and sustainable development. The report also calls for the repeal of unequal free trade policies and the promotion of South-South cooperation to reduce reliance on former colonial powers.

Finally, the report emphasises the need to tax the richest to end extreme wealth. Global tax policy should be reformed to ensure that the richest individuals and corporations pay their fair share, with the proceeds used to fund public services, reduce inequality, and address the impacts of climate change.

The "Takers, Not Makers" report is a stark reminder of the deep-rooted inequalities that continue to shape our world. It challenges us to confront the legacy of colonialism and the systems of exploitation that perpetuate inequality today. The rise of billionaire wealth, built on extraction and privilege, stands in stark contrast to the struggles of billions of people living in poverty.

But the report also offers hope. It shows that inequality is not inevitable; it is the result of policy choices and systems that can be changed. By taking bold action to reduce inequality, repair the wounds of colonialism, and create a more just global economy, we can build a future where everyone has the opportunity to thrive. The fight for economic justice is not just a moral imperative; it is a necessary step towards a more equitable and sustainable world. As the report reminds us, the time for action is now.

Dr Matiur Rahman is a researcher and development worker.​

 

[Saif]

https://thefinancialexpress.com.bd/trade/trade-competitiveness-rises-as-taka-value-falls

Trade competitiveness rises as taka value falls
Jasim Uddin Haroon
Published :
Mar 19, 2025 00:07
Updated :
Mar 19, 2025 00:07

Bangladesh's trade competitiveness on the global market rises as the taka, which was significantly overvalued against the US dollar in January, reasonably depreciated in February.

In the past month of February, the real value of the local currency should have been Tk 124.27, but the nominal value stood at Tk 122, making it marginally overvalued by Tk 2.27, according to Bangladesh Bank calculations.

In the previous month, January 2025, the taka was overvalued by Tk 3.67.

An overvalued currency negatively impacts the country's trade competitiveness with international partners.

The central bank calculates the real effective exchange rate (REER) index that stood at 101.86 in February, down from 103.01 in January.

When adjusted using the exchange rate, the real exchange rate should be at Tk 124.27 against one greenback.

The central bank or Bangladesh regularly updates the government on the nominal, nominal effective and real effective exchange rates of the taka against an 18-currency basket, which accounts for more than 85 per cent of the country's trade.

In economics, a REER value of 100 suggests trade competitiveness is balanced. Any value above 100 indicates an overvalued currency, making exports less competitive.

Central bankers told the FE that the inflation in the country got reduced to some extent and it was one key reason behind the fall of the REER.

"Our efforts are being made to bring the REER down to 100," said one of the BB officials.

He said Bangladesh's inflation rate is still higher than that of its trading partners, which is a major reason for the currency's overvaluation.

Earlier, during the tenure of previous central-bank governor Abdur Rouf Talukder, the taka was overvalued by Tk 6.0-7.0.

He says while overvalued currency impacts export competitiveness, the situation has improved over time.

Dr Zahid Hussain, an independent economist, says Bangladesh's inflation rate is higher compared to its trading partners. "As a result, our exports are relatively less price-competitive."

He notes inflation in Bangladesh dropped to some extent but the inflation in the country's major trading partners also edged down. "Such drop in inflation also impacts the REER."

Bangladesh's inflation rate was nearly 9.32 per cent in February 2025, down by 0.62 percentage points from January.

Inflation in China, Bangladesh's largest trade partner, fell into negative territory in February, while in India, the second-largest trade partner, was 3.6 per cent and Eurozone rate 2.4 per cent.

Chairman and CEO of Policy Exchange Bangladesh Dr M. Masrur Reaz emphasizes that an overvalued currency affects trade competitiveness, particularly in export.

He mentions that Bangladesh's exports grew 10.53 per cent during July-February of the current fiscal year. "It could have been much higher if competitiveness was fully in place."

The Bangladesh taka, against the USD, depreciated by 3.28 per cent during July-February of FY25 compared to the depreciation by 1.49 per cent during July-February of FY24, according to Bangladesh Bank statistics.

As an import-dependent country, Bangladesh relies on imports for both domestic consumption and export production. A sharp depreciation would significantly increase import costs.

However, to modernize its exchange rate and monetary policy, Bangladesh Bank introduced several reforms on December 31, 2024.

The regulator introduced a Crawling Peg Exchange Rate System for the spot purchase and sale of USD with a Crawling Peg Mid Rate (CPMR) at Tk117.00 per USD in May 2024.

Scheduled banks are instructed to purchase and sell dollars freely around the CPMR to both customers and interbank buyers since May 2024.

Along the same line of intensions for modernizing exchange-rate policy and monetary policy on 31 December 2024 BB launched a new foreign-exchange intervention strategy for publishing daily reference benchmark based on weighted average of freely quoted exchange rates in the market transactions.

In addition, BB has instructed authorised dealers to provide information on all foreign-exchange transactions at and above USD 100,000 twice a day and make the business day's exchange rate visible to the customers on digital screen as well as on their website.

Moreover, on 2nd January 2025, with the intension of streamlining foreign- exchange operations and eliminating discriminatory currency practices the regulator introduced a maximum allowable spread of one taka between buying and selling rates for foreign currencies, with a uniform spot rate irrespective of size of transactions.​

 

[Saif]

Could the interim govt bring relief to macroeconomy?

 

[Saif]

BCI calls for tax reforms to support industrial growth

The Bangladesh Chamber of Industries (BCI) has called for urgent reforms to enhance industrial competitiveness in the rapidly evolving global market, saying they would subsequently ensure sustainable growth.

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BCI calls for tax reforms to support industrial growth

The Bangladesh Chamber of Industries (BCI) has called for urgent reforms to enhance industrial competitiveness in the rapidly evolving global market, saying they would subsequently ensure sustainable growth.

The reforms were sought through proposals for the national budget for the fiscal year 2025-26, submitted to the National Board of Revenue (NBR) by BCI President Anwar-ul Alam Chowdhury Parvez yesterday.

The proposals highlighted the challenges of Bangladesh's upcoming graduation from a least developed country to a developing one, along with ongoing issues such as rising energy costs, inflation, and slow infrastructure development.

While the graduation will usher in significant economic progress, it also means the country will lose vital trade privileges, particularly the benefits of the Generalised System of Preferences for exports, said Parvez.

The BCI urged the NBR to address these challenges by implementing policies that would support industries during this transition, ensuring they remain competitive in global markets despite losing preferential access.

The ongoing energy crisis, inflation, and slow progress of the Annual Development Programme (ADP) have been negatively affecting industries of all sizes, particularly small and medium enterprises (SMEs), which are facing significant financial pressure, said Parvez.

The BCI proposed several reforms aimed at reducing operational costs and improving the tax system to provide relief for businesses struggling with these challenges.

The government must adopt a tax framework that is not only revenue-centric but also conducive to industrial growth, said Parvez.

The BCI called for the simplification of the tax system to expand the income tax and VAT net, with the goal of increasing tax compliance across all sectors.

It proposed making tax registration mandatory for both government and private sector organisations to ensure that transactions are properly tracked and reported.

To further reduce costs for businesses, the BCI suggested that government fees related to land acquisition, licensing, and port services be aligned with administrative cost models rather than arbitrary fees.

This would bring Bangladesh's tax practices in line with World Trade Organization (WTO) guidelines, it said.

The BCI also advocated for reforms in customs and tax laws, aiming to streamline processes at the production, import, and export stages and improve the overall efficiency of the tax system.

The BCI recommended implementing a zero VAT rate on energy supplies for industrial and export sectors to help reduce production costs.

Additionally, it proposed tax relief for SMEs, particularly in rural areas, and suggested the introduction of bonded warehouses and distribution systems to help these businesses compete in the e-commerce market.

The BCI also called for special incentives for women entrepreneurs in the rural sector.

"We are optimistic that the NBR will pay heed to our proposals, which are designed to safeguard the interests of our industries and ensure continued progress," said Parvez.​

 

[Saif]

Remittances cross $2.25b in 19 days, up 78pc

Remittance inflows have surpassed $2 billion in the first 19 days of March, according to Bangladesh Bank data. On Thursday, the central bank reported that expatriates sent $2.25 billion during this period. Bangladesh Bank Assistant Spokesperson and Director Shahriar Siddique told reporters, &ldqu

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Remittances cross $2.25b in 19 days, up 78pc
bdnews24.com
Published :
Mar 20, 2025 18:29
Updated :
Mar 20, 2025 19:36

Remittance inflows have surpassed $2 billion in the first 19 days of March, according to Bangladesh Bank data.

On Thursday, the central bank reported that expatriates sent $2.25 billion during this period.

Bangladesh Bank Assistant Spokesperson and Director Shahriar Siddique told reporters, “In the first 19 days of March 2024, remittances stood at $1.27 billion.

“This year, the amount has reached $2.25 billion, reflecting a 78.4 percent growth,” he said.

According to central bank data, remittances totalled $1.66 billion in the first 15 days of March, meaning an additional $590 million arrived in the last four days.

Providing a broader perspective, Shahriar said remittances for the current fiscal year up to Mar 19 stood at $20.74 billion.

During the same period fiscal year 2023-24, the figure was $16.34 billion, marking a 26.9 percent growth.

Bangladesh Bank data shows that the highest remittance inflow in the country’s history was recorded in December 2024 at $2.64 billion.

The second-highest amount was received in February 2024, totalling $2.53 billion.

A treasury head at a private bank attributed the recent rise in remittances to greater market stability, telling bdnews24.com: “The volatility in the dollar market has eased, and exchange rates are now more stable.

“The influence of hundi operators has declined, and expatriates usually send more money before Eid. These factors have contributed to higher remittance inflows through banking channels.”

In late January, the dollar rate surged to Tk 128, with banks reportedly purchasing remittances at Tk 126 due to increased demand.

In response, Bangladesh Bank capped the remittance rate at Tk 122 per dollar at the end of January, allowing banks to pay up to Tk 1 more.

At that time, Governor Ahsan H Mansur issued verbal instructions for uniform exchange rates on remittances and exports across all banks.

He also mandated a maximum Tk 1 spread on dollar transactions, warning of penalties for non-compliance.​