Overview Leather and Goods

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Acceleration of production and
expansion of trade result in growth of national wealth. Increased production in
export sectors may become the prime mover in the development cycle in a densely
populate of Bangladesh like our as this will generate employment opportunities
which in turn will generate savings and investment on consequent flow of
capital. The prime national objective of poverty alleviation will thus be
materialized. As a first step towards reaching this goal we need to look at the
country’s production infrastructure.

Our export trade is featured by the
dominance of a few commodities in a narrow market. Such dependence on at
limited number of export items targeted a limited market is not desirable for
economic development. We must, therefore, aim both at product and market
diversification or else our export trade will become stagnant in the near

Our export trade must keep pace with
the projected GDP growth @ 7% and make due contribution through increased
export earning. In this exercise it is imperative to identify new thrust
sectors, increased export of higher value added items, diversify product wise ,
ensure products quality, improve packaging, attain efficient productivity. We
should aim at marketing quality products at competitive price at the correct

The Export Policy 1997-2002 has been
designed to operate in the imperatives and opportunities of the market economy
with a view to maximizing export growth and narrowing down the gap between import
payment and export earnings



The principal objectives of epb are:

To achieve optimum national growth
through increase of export in regional and international market;

To narrow down the gap between the
country’s export earning and import payment through achievement of the export

To undertake timely steps for
production of exportable goods at a competitive price with a view to exporting
and strengthening existing export markets and making dent in new markets;

To take the highest advantage of
entering into the post Uruguay
liberalized and globalizes international market;

To make our exportable items more
attractive to the market through product diversification and quality

To establish backward linkage
industries and services with a view to using more indigenous raw materials,
expand the product base and identify and export higher value added products ;

To simplify export procedures and to
rationalize and solidify export incentives;

To develop and expand infrastructure;

To develop trained human resources in
the export sector;

To raise the quality and grading of
export products to internationally recognized levels.


The following strategies undertaken to attain export performance of epb

Simplifying export procedures
and helping the private sector achieve efficiency. The Govt. desires more and
more involvement of the private sector while the govt. will continue to play
its facilitating role;
Enhancing technological
strength and productivity and facilitating reduce cost and attain
internationally accepted standard of quality of exportable products and thereby
consolidate their competitiveness;
Ensuring maximum use of
local raw materials in the production of export goods and encouraging
establishment of backward linkage industries;
Participation in the
international trade fairs, specialized fairs, single country exhibitions abroad
and also sending out trade missions, with a view to consolidating our position
in the existing market and creating new markets;
Encouraging export of new
category high value added readymade garments and also encouraging the concerned
trade associations for establishment of a Fashion Institute;
For promotion of high
value added leather and leather goods export: providing various facilities including
bonded warehouse facilities for import of materials such as raw hides, pickled,
wet blue, crushed and finished leather, components and chemicals etc. to 100%
export oriented leather industries;
For promotion of export
of shrimp: Extension and modernization of traditional/semi-intensive method of
shrimp cultivation and ensuring quality as per buyer’s requirements;
For promotion of export
of jute and jute goods: Undertaking extensive publicity of jute and jute goods
as environment-friendly natural fibre and diversification of the uses of jute
For promotion of export
of tea undertaking programmes for establishing brand name and developing
linkage with established blending and distributing agents;
For promotion of export of agro based products: undertaking programmes
for raising quality standard and expansion of market;
For the promotion of
export of electrical and electronic goods ( including computer software and
data entry) : Building and ensuring conducive infrastructure; For the promotion
of export of engineering consultancy and other services and sub-contracting
involving, in a bigger way, Bangladesh missions abroad obtaining contracts;

Organizing regularly international
trade fairs and product-specific fairs with the country;

Making appropriate development and
expansion of infrastructure conducive to export;

Making arrangements for necessary technical and practical training for
development of skilled manpower in the export sector;

Ensuring maximum utilization of
financial and other assistance extended by the World Trade Organization to the
Least Developed Countries;

Ensuring maintenance of ecological
balance and pollution-free environment in the production of exportable goods;

Extending technical and marketing
assistance for development of new products and for finding appropriate
marketing strategies;

Taking necessary steps to assist
procurement of raw materials by the export oriented industries at world price;

A National committee on export has
been formed. The highest level committee on export promotion is headed by the
Prime Minister and consists of the Ministers for Foreign Affairs, Finance,
Commerce and Industries, Planning, Jute and Textile as well as senior
government officials and representatives of important trade associations. The
committee reviews the export situation, provides necessary directions and
readily resolves problems.

For immediate attention and action on
export related problem a task force has been formed under the chairmanship of
the Minister for Commerce.

With a view to exchanging ideas with
Chambers of Commerce and Industries, Exporters’ Associations and private sector
organizations in formulating export policy and strategies, and up lamenting
policy decisions an export council has been formed.

A task force shall also be formed to
recommend practical measures for export increase and monitoring the
implementation of incentives and facilities of thrust sector and crash
programme items.

Commodity Councils shall be formed
for jute, tea, shrimp, readymade garments and leather & leather products.

Leather and leather goods
industries, high and high value added readymade garments, computer software and
agro-processing sectors have been identified as thrust’ sectors in this export
policy. Although the leather and leather goods sector has enormous export
potential the sector has not been able, till date, to achieve desired results.
On the other hand, the readymade garments sector is expected to stage a breakthrough
in the export of high-priced, high value added garments of newer categories
after having survived successfully the initial phase of exporting low-end
garments. Like wise computer software and agro-processing sectors could not
record the desired level of export through the sectors offer bright prospects
for earning foreign exchange. These -four sectors have been declared, ‘Thrust
Sectors’, in this policy to ensure priority with the following lines of

Leather manufacturing units shall be
modernized in order to enable them to produce increased quality of finished
leather out of raw hides.With a view to reducing cost of production, steps
shall be taken to establish accessories industries for producing necessary
chemicals and other inputs within the country.

The existing Leather Technology
Institute shall be modernized for use as a ‘Common Facilities Centre’ for the
sues country leather units.

Import of raw hides including wet
blue and pickled leather, shall continue with the prevailing customs duty
(2.5%) and import license fee (2.5%) livable on the importation of raw leather
for three years.

Uniform policy on bank loan as
regards criteria and rate of interest shall be followed for credit to leather

The total credit excluded to the
leather sector shall be brought under a single bank and export will also be
affected through that designated bank.

After careful revision of the overall
situation prevailing in the leather industries, the time-limit for export of
crust leather has been extended up to the year 2000. Facilities for BMRE and
other transformation process shall be made available to all tanning units to
enable them to switcher by 2000, to processing crust/finished leather from wet
blue leather.

All out efforts would be made and
steps taken for production and export of high priced readymade garments in the
light of the prevailing market demand.

Immediate steps shall be taken to
establish a Fashion Institute pending establishment of the Fashion Institute
measures will be taken, under special arrangements, to extend expert services
to match the actual demand.

Liberal credit may be considered for
capacity building and hiring technology for producer of high quality garments.

Computer Software

For the development of human
resources in the software information of computer science, courses in all
universities including B.I.T. and Polytechnic Institute and selected colleges
shall be considered similarly for having a pool of skilled and trained instructors
basic computer scheme at graduation level may be introduced.

An Information Technology Village
making multifaceted facilities shall be established as part of infrastructure
development for promotion of export in this sector.

As a fillip to effective software
marketing appropriate provisions on protection of intellectual imports shall be
incorporated in the existing copyright Act.

For the development of the
agro-processing industries ‘Hortex Foundation’ has already been established.
Development activities of this sector under the Foundations programmes will go

In the light of the objectives and
strategies of the Export Policy 1997-2002, several new incentives and
facilities have been made available to the exporters. Besides, some existing
incentives have been modified and improved to make them more workable. The rest
of the existing facilities and incentives will remain unchanged. The incentives
as offered are enumerated below:

Fiscal Incentives

Restructuring of the Export Credit
Guarantee Scheme (ECGS): At present, there are four schemes, namely, the Export
Credit Guarantee (Pre-shipment), Export Credit Guarantee (Post-shipment),
Export Payment Risk Policy (Comprehensive Guarantee) and Whole Turnover
Pre-shipment Finance Guarantee, available under the Export Credit Guarantee
Scheme ( ECGS ) covering risks on export credit as well as probable commercial
and political risks occurring abroad. These schemes, however , are becoming
effective to the desired extent due to existence of various complicacies in
realizing their benefits. To strengthen the role of the Export Credit Guarantee
the schemes shall be restructured.

Convertibility of Taka

Taka has been made convertible in the
current account in lieu with the policy of export-led growth in the liberalized
world market. As a result, earning from the trading account shall be freely
convertible into foreign exchange for import of goods (barring a few banned
items). Under this arrangement, exporters shall be allowed to retain their
foreign exchange earnings in their respective foreign exchange accounts
gradually at higher proportion.

Utilization of Foreign Exchange by

So long exporters were allowed to
retain 20% of their FOB earnings in their respective foreign currency accounts
in US dollar or Pound Sterling. From now on they will be entitled to retain
either 40% of such earning or at a rate fixed by the government from time to
time on proper review. However, in cases of export products where the import
contents used in the manufacture of such items are relatively high (such as,
naptha,furnace oil, bitumen and other petroleum products, readymade garments
and electronic goods ) and in the case of export of services ( legal advice,
consultancy and similar professional services ), the exporters concerned will
be entitled to retain only 7.5% of their FOB export earnings. Immediately on
realization of export proceeds, the concerned banks will credit the exporters’
foreign currency account in proportion to their respective entitlements.
Exporters may utilize this foreign exchange for bonafide business purposes,
namely, undertaking business trips abroad, participating in export fairs and
seminars, importing raw materials, machineries and spares and even setting up
overseas business offices. Foreign exchange may also be kept in the renewable
fixed deposit account which will bear interest.

Export Promotion Fund (EPF)

The following assistance and support
would be provided out of  the Export Promotion Fund to producers/exporters
of new and non-traditional items including those under the crash programme for
product development and product and market diversification:

Venture capital on easy terms and
low interest rates ;

Assistance in obtaining foreign
technology and consultancy for product development and diversification;

(c) Assistance in fielding marketing missions abroad and participating in
international fairs for market compatibility of products;

Assistance in Establishing Sales and
Display Centers abroad and extending warehousing facilities ; (e) Assistance
for participation in overseas training programmes on product development and
marketing help develop technical skill and marketing expertise ;

Assistance in any other activity
related to product and market development.

Extension of Time-limit for
adjustment of Export Credit from 180 days to 270 days

At present export credit is allowed at concessional rate of interest for a
maximum period of 180 days. A section of exporters however cannot enjoy the
benefit of such concessionary credit facility due to structural characteristics
of certain commodities. Under such circumstances, the tiì¥Á5@

Limit of Export Credit: Exporters may
obtain export credit from commercial banks upto 90% of the value of their
irrevocable letter of credit/confirmed contract.   09

(c) Credit to first time applicant: With a view to encouraging
the new comers to enter into export trade the commercial banks will consider
their credit proposals on a priority basis.

(d) Monitoring the Over-all flow of export credit:

Bangladesh Bank will take necessary
steps to ensure that normal flow of export credit is maintained. The C.C. limit
of the exporters will be determined only on the basis of their export
performance in the preceding year. Tthis will not be subject to any general
credit squeeze measure. Such credit facilities will also be available to new

Overdue interest: No overdue
interest will be charged by the commercial banks in cases of export against
irrevocable letter of credit on sight payment basis. In such cases, however,
exporters will be required to submit necessary export documents within the
specified time.

(f) Export credit cell: As special export cell to supervise
and monitor the export financing has been functioning in Bangladesh Bank.
Besides, in every commercial bank a special unit has been created for
processing exclusive export credit proposals.

Export monitoring: A high-powered
committee has been functioning to assess the export credit requirement and 
to review and monitor the flow of export credit to ensure that adequate and
timely credit are made available to the exporters.

Inland back-to-back letter of
credit: Authorized dealers may establish inland back-to-back letter of credit
in favor of local suppliers of raw materials, against the corresponding master
letter of credit.

Rebate on insurance premium:

Special rebates are allowed on
premium covering fire and marine insurance to export-oriented industries
(non-traditional items). Such rebates will be available also to the exporters
of these items on shipment of goods.

Incentives for export of
non-traditional industrial products:

Incentives will be provided for
export of non-traditional/new industrial products, especially where value
addition is 50% or more.

Similarly, export firms having
exceeded the proportionate export target set for that product-sector will be
considered for incentives facilities.

Fiscal Incentives

Import facilities of raw materials
for export-oriented leather industries

To encourage increase in product ional export at competitive price of finished
leather customs duty and import license fee livable on import of wet blue and
pickled leather by export-oriented leather industries will be exempted.

Previously, 50% rebate on taxable
income generated from export earning was admissible under the Finance Act every
year. From now on 50% of the income tax on any income on export will be
exempted through incorporation of a new provision in the Income Tax Ordinance
itself rather than as a temporary relief hitherto granted under the Finance
Acts on a yearly basis.

Tax at source on all export earnings
shall be deducted at the rate of 0.25%

Payment of duty drawback through commercial banks

For quick disbursement of duty
drawback with a view to giving a competitive edge to our export in the
international market, payments will be made by the commercial banks immediately
on receipt of foreign exchange against all exports except the deemed exports,
determined on the basis of the principles laid down by the National Board of

Bonding facilities for
export-oriented industries

Bonded warehouse facilities have
generated special enthusiasm among the import-led export-oriented industries.
To sustain such interest the procedures for providing bonded warehouse
facilities to such industries will be further simplified, and will be extended
to all industries recognized as 100% export-oriented industries.

Duty-free Import of capital machinery
by export-oriented industries

Presently, items produced in the
Export Processing Zones (EPZ) are entirely exported. Likewise 100%
export-oriented industries located elsewhere in the country are also required
to export their produces entirely from this point of view as the objectives and
functions of the industries of both locations are identical. Duty free import
facility of capital machinery has also been extended to the 100% export
oriented industries outside the EPZ.

Alternative facilities in lieu of
customs bond or duty drawback for export-oriented domestic textile sector and
garments industries

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. In future also, these sectors will continue to receive reasonable
facilities. Such compensatory assistance will also be admissible to a composite
unit producing both fabric and garments or to the manufacturer only in case the
exporter is not the producer of the local fabric provided no bonded warehouse
or duty drawback facilities were availed of for such importation. If, however,
the exporter is an intermediary buyer, the facility will go to the original
producer of goods.

(a) Exporters of manufactured products
are entitled to draw back after the export is affected. The amount of duties
and taxes paid on importation of raw materials under any of the three systems,
namely, actual drawback, notional drawback and flat rate drawback. However, as
a simpler mechanism of getting drawback, the flat rate method shall continue to
receive greater weight age.

The rate of duty drawback payable on export of all traditional and
non-traditional items will be renewed at regular intervals and more and more, new products will be brought under
the duty drawback system.

Should jute clothes and bags be used in the packing of export goods VAT
paid on such products will be refunded.

Simplification of the procedure for
refund of VAT paid on export support services

To maintain competitiveness of export prices, VAT paid on export support
services, namely, C & F service, telephone, telex, fax, electricity,
insurance premium, shipping agent’s commission/bill will be refunded under a
simplified procedure.

Permission for sale of goods rejected for exportation:

20% of the rejected goods of the 100%
export-oriented industries including leather goods and readymade garments will
be admissible for sale in the local market subject to payment of usual duties
and taxes.

Declaring 80% export oriented leather
industries as 100% export-oriented industries:

Most of the leather industries are able to export at least 80% of their
products; rarely they are in a position to export 100 of their product. In
order to bringing about dynamism in the leather sector 80% export oriented
leather producing units have been declared 100% export-oriented industries.
Other 80% export-oriented industries to get identical incentives
available to 100% export-oriented industries:

Other 80% export oriented industries
(other than leather industries) will be given following incentives with a view
to encouraging their export operations:

Financial incentives including bank
loan as available to 100% export-oriented industries. However, the benefits
allowed to the 100% export-oriented industries by the National Board of Revenue
in respect of duties and taxes will not be applicable to them.

(b) Sale
permission up to 20% of their production in the local market on payment of
usual duties and taxes.

Reduced airfreight for export of all crash programme items including
fruits and vegetable:

(a) Airfreight at lower rate will be changed for export of all
crash programme items including fruits and vegetables.

(b) Withdrawal of royalty from foreign airlines extending
cargo services :

In order to ensure export of goods by cargo services of foreign airlines and
sell export goods at competitive price, the royalty being presently imposed by
Biman Bangladesh Airlines may, if necessary, be further reduced or may be
withdrawn altogether.

With the expansion of exports trade
disputes are also increasing. In many cases Bangladesh‘s image as an exporting
country is being tarnished because of such disputes. On the other hand,
Bangladeshi exporters are also incurring financial losses. To remove such
difficulties, the Export Promotion Bureau will initiate steps for settlement of
trade disputes through conciliation. For this, necessary amendment will be made
in the Charter of Export Promotion Bureau to enable them to perform this
responsibility effectively.

Recognizing small and medium size
agricultural farms as Industry:

To encourage production of fruits,
vegetables, fresh flowers, orchid etc. for export, agricultural farms of a
minimum size of 5 acres have been recognized as ‘Industry’ and become eligible
for all facilities of export-oriented industries.

Research and development:

Marketing of products in the
international market is becoming increasingly competitive due to globalization and
liberalization of trade. To sustain in the face of such stiff competition,
continuous quality improvement and market adaptability have become necessary.
For this purpose, industrial enterprises should be equipped with their own
Research and Development (R & D) facilities. For this duties and taxes on
machinery and equipments imported by export units will be gradually lowered.
Research institutions on the recommendation by the Export Promotion Bureau will
also be entitled to such benefit.

Export on the basis of

The sub-contracting service sector
has immense potential for export. All out efforts will be made to exploit the
opportunities in this sector especially in the automobile industry in Japan and the
printing industries in the western countries.

Assistance to contract services
abroad like Engineering Consulting Services Contract and Civil Construction
Contract etc.:

Contract Services like engineering,
consulting and civil construction contract abroad have been identified as
potential export sector. The following facilities are being extended to assist
this sector :

(a) Issuance of bid bond and performance bond, at 1% margin by
commercial banks for submission of tender and on receipt of work order

Allocation of fifty thousand dollars
annually to each organization to meet the expenditure like maintaining
communication, sending representatives, making overseas trips, purchasing
tender documents etc. before receipt of actual work order ;

Permission for setting up overseas
office and appointment of staff;

(d) Permission for Sadharan Bima’s Individual professional
guarantee/insurance in favor of project specialists ;

(e) Involving Bangladesh missions abroad to provide
information and assistance.

Annual ceiling for dispatch of export samples:

At present, the annual ceiling for
dispatch of samples to international trade fairs is fixed at US $ 2000 (two
thousand). The ceiling for sending samples for purposes other than
international fairs was however considered inadequate. It has been raised in
phases from Tk.1000 per annum to US $ 1500 (approximately Taka 65,000) per
annum. The maximum limit for sending out samples by parcel post will be raised
from its present limit of Taka 2,000.00 to Taka 5,000.00.

Commodities under the Crash Programme:

At present toys, luggage and fashion
items, electronics, leather goods, diamond cutting and polishing, jewellery,
silk fabric, stationery goods, cut and artificial flowers and orchid, gift
items, vegetables and engineering consultancy and services have been included
under the crash programme. In order to boost production and export, promote
goods/services under the crash programme, soft term credit will be provided for
product development, market adaptation, and marketing. Import of raw materials,
facilities will be provided for export on consignment basis and into duty
drawback/bonded warehouse facilities. In addition assistance will be provided
for market exploration obtaining joint venture. Fresh flower, fruits and
bamboo, cane and wooden furniture shall be included in list of crash programming
items apart from the items listed above.

In order to increase the export of
agro-based products, necessary assistance will be provided to the high value
added agricultural products.

Increased import facilities of samples for product development:

For product development and market
promotion any exporter except of RMG sector is entitled to import duty free:

Samples up to a maximum of US $ 1000
(One thousand) annually on obtaining clearance from the Export Promotion
Bureau. For import of samples exceeding US $ 1000 (One thousand), clearance
shall have to be obtained from the Chief Controller of Imports & Exports
which will approve the import on the recommendation of the Export Promotion
Bureau issued on the basis of export earnings.

Multiple entry visas to importers and
foreign Investors:

Multiple entry visas are being issued
to foreign investors and importers to make their entry into and stay in
Bangladesh easy and trouble free.

Participation in International Trade Fairs, Organizing Single Country
Exhibitions and undertaking market development programmes abroad:

As part of export promotion
Bangladesh regularly takes part in international trade fairs, organizes single
country exhibitions and undertakes market development programmes in different
countries of the world Private enterprises and organizations are encouraged to
take part in such export-oriented events and are accorded various incentives.
Besides, programmes to organize single country exhibitions in different
countries through combined public and private initiaves will continue.

Strengthening training on export-related matters:

Knowledge about the facilities and
incentives available in the export trade leads to intensified export activities
in the country. To apprise the country’s exporters of the various
facilities/incentives available, training sessions, seminars and workshops in
different parts of the country under the National Export Training Programmers
of the

Export Promotion Bureau will continue to be organized.

The government has decided to
establish a World Trade Centre in Dhaka in a bid to strengthen infrastructural
facilities for the development and expansion of export. An area of 6.12 acres
near Hotel Sonargaon has been earmarked for this purpose.

Simultaneously with the establishment
of a World Trade Centre in Dhaka, it has been decided to set up, in Chittagong,
an International Trade Centre at private initiative. Necessary land for this
purpose has already been allotted.

Every year commercially important
persons (CIPS) are selected from the highest export performers’ item- wise in
recognition of their contribution to export.

As mark of national accolade, 45
National Trophies are awarded every year to the most outstanding exporters in
15 product sectors. The trophy winning exporters are given C.I. P. facilities
at the airport.

Deemed Export Facilities :

Local raw materials used as direct
import for export production for products supplied to local projects
procurement in foreign exchange against international tender are regarded as
‘deemed export’ and qualify for all export incentives and benefits
including duty drawback that extended to direct exporters.

Organizing Local Fairs of International Standard:

Organizing trade fairs of
international standard plays a very important role in the promotion of exports.
Trade fairs, help product familiarization on the one hand and establishment of
closer contacts between foreign buyers and local sellers on the other hand.
Considering this aspect general as well as specialized trade fairs of
international standard will be organized within the country apart from participating
in general and specialized International Trade Fairs abroad.

Import of samples by Export Promotion
Bureau and TCB :

The Export Promotion Bureau and the Trading Corporation of  Bangladesh
will be entitled to import duty free samples up to a maximum annual limit of
taka 30,000.00 (Taka Thirty thousand ).

The coverage of “deemed
export” has been widened to include supply of goods to the Export
Processing Zones and export of turn-key projects like engineering services contract,
consulting services contract and various other construction contracts. The net
foreign exchange earnings generated by such project exports will be considered
as actual export and become eligible for all export incentives and facilities.

To avoid unnecessary delay in shipment of export cargo the Ministry of
Shipping will grant waiver for shipment of export goods except those which are
covered within 24 ( twenty four ) hours of receipt of  application in the
transportation of export goods. Besides, should  an exporter decide to
charter an aircraft for quick transportation of his export consignment, the
government will consider for according necessary permission in this regard.

Re-export (Enter-Pot):

The existing system of taking
permission from the Ministry of Commerce on case-to-case basis for re-export of
imported cargo (entre-pot ) trade will not be necessary henceforth. The rate of
value addition required for entre-pot trade has been lowered to 5% from the
previous rate of 10%. However, each package under the re-export consignment
must bear the mark ‘entre-pot’ or ‘temporary importation’ and must not claim Bangladesh as
country of origin.

With a view to further simplifying
export procedures, from now on, export may be effected without L.C. on the
basis of purchase contract, agreement, purchase order or advance payment. In
such cases, the exporter will be required to submit only the EXP Form and the
Shipping Bill. In addition, export of all commodities including vegetables and
electronic goods shall be allowed without L.C. and on the basis of advance
encashment or on consignment basis. In order that such exports can be effected
smoothly, genuine exporters will be allowed, for a minimum period of one year,
to export their goods on the basis of contract, purchase order or advance
payment, besides export L.C.

Relaxation of provisions for import
of raw materials for export- oriented industries:

For import of raw materials through back-to-back L.C. by 100% export-oriented
industries, restrictions of the import policy order or the requirement of this
rules of origin shall be relaxed.

Direct air booking facility from
Rajshahi and Syedpur airports up to the destinations shall continue for export
of fresh vegetables and other perishable items produced in the northern regions
of the country to ensure quick transport and preservation of quality.

Inter-Agency, Inter-Sector Project
for product diversification:

An Inter-Agency, inter-sector project
shall be taken up with the aim of product diversification. The existing bonding
system, duty drawback, cash incentive etc. shall be reviewed under the proposed
project, with a view to keeping the export prices competitive. The project will
encompass issues like product development, market expansion, trade cooperation,
identification and removal of infrastructural impediments of the export trade.
Appropriate project, aided by the World Bank or other sources, shall also be
taken up for technology transfer in order to bringing about quick transformation
of the export trade.

Encouraging increased use of local
raw materials:

Composite knit/hosiery and garments
manufacturing units operating under the bonded warehouse system have been
increasingly using local raw materials. These units are presently enjoying
bonded warehouse facilities for 50% – 70% of their imports. This rate of bonded
warehouse facilities shall be gradually lowered in an attempt to ensure
increased use of local raw materials.

Product-Specific decisions

Provisions have been made for the
exporters of readymade garments to retain in their respective foreign currency
accounts the portion of their export earnings required for meeting the expenses
on importing fabrics and other accessories through back-to-back letter of
credit. The exporters that way shall be saved from incurring losses by first
converting their export earnings to Taka and then re-converting the same to
foreign exchange for payment of import bills on raw materials.

For making hand-woven sweaters of
natural and synthetic wool imported under customs and permission would be
accorded to take up such wool outside the bonded area, provided the concerned
firm furnishes a bank guarantee for equivalent amount of customs duty leviable
on such raw materials.

Import of samples for each category of garments:

At present, facility exists for duty
free import of 20 pieces of samples for each category of garments subject to a
maximum of 100 pieces. Imported samples are, however, subject to mutilation at
the customs paid.

Rationalizing the rate of value

It has been found that keeping the
rate of value addition flexible is congenial for the growth of the country’s
export trade. Therefore a Standing Committee will be formed for rationalizing
the existing rates of value addition for all commodities including readymade
garments.  18

When a garment export
unit relies exclusively on locally procured cotton and accessories through
back to back L/c the maximum amount of back to back L/C in case of knitwear
unit would be equal to the value of the master L/C.

Emphasis has been laid on scientific
cultivation of shrimps for increased production and export of shrimp. With this
end in view, various programmes including setting up of a Shrimp Development
Board, declaring shrimp hatchery as an ‘industry’,setting up of a Credit
Assurance Fund for extending loan facilities to the shrimp cultivators and
lowering of customs duty on import of equipments used in the cultivation of
shrimps, will be taken up.

Exporters having fish processing
plant will be considered for allotment of one hundred acres of ‘Khas’ land for
cultivation of shrimps applying modem techniques.

Bank loan on easy terms will be made
available on priority basis to the frozen food processing plants for the
implementation of the HACCP system.

In an effort to strengthen the
quality control system of frozen food, arrangements will be made for import of
essential quality control equipments free of customs duty.

Cultivation of Bamboo, Cane and

Sac Importance has been given to plan cultivation
of bamboo, cane and coconut keeping in view the need to increase supply of
local raw materials to the handicrafts sector. 

A Design Centre will be set up to improve the quality of handicrafts.

Tea Industry:

A Design Centre will be set up to improve the quality of handicrafts.
Tea Industry:
A Design Centre will be set up to improve the quality of handicrafts.
Tea Industry:

The government is
contemplating declaring the country’s tea industry as export oriented

Land under most of the tea estates at present do not enjoy long term lease
which is a limiting factor for development activities of tea estates. To remove
such impediment, land under the tea estates will be leased out on long term

Tea estates will be provided with
soft term bank loans for modernizing the plants to achieve high yield and
improve quality of products to strengthen sustain ability in the international
market. Development credit will also be considered for sick tea estates.

To encourage export of package tea duty drawback at those rates on FOB
value will be provided on import of packing materials.

General waiver for shipment of goods
will be granted in an effort to increase the export of tea.

Import of multiwall paper sacks on concessional customs duty for packing of
tea will be allowed.

To establish reputation and brand name of Bangladeshi tea in overseas
markets publicity measures will be strengthened. Liaison shall be maintained,
for this purpose, with reputed blending and distributing agencies.


Reform programmes will continue for
the development of the jute sector.

For developing the export of jute and jute goods, wide publicity will be
undertaken abroad highlighting the comparative advantage as a natural fiber.
Steps will also be taken to demonstrate the diversified uses of jute goods.

As an incentive to export jute yam
and twine, marketing assistance at the rate of 10% of FO.B. Value is being
extended to the exporters of this sector for a period of three years commencing
from 1997.

Other Sectors.

Six V-SAT lines have already been
established to facilitate increase of the export of software. Steps will be
taken to install more lines/connections to further increase export from this

Realizing the importance of software as a potential export sector a committee
was formed to recommend on the potentialities and technical aspects of the
sector. In the light of the recommendations of the committee, the sorts are
considering to offer some more facilities to this sector.

A jewellery export policy incorporating various facilities has already been
formulated to provide necessary impetus to the jewellery and diamond cutting
industry. Formulation of a diamond cutting policy is in its final stage.

Quality control of
export products:

Measures will be taken to create
quality awareness among the exporters especially about the internationally
recognized standards of export products. Quality control institutions will also
be modernized. Quality standard compliance of health regulations and
phytosanitary certification will be ensured before shipment of export cargo. Besides,
exporters will be given training on and motivated for obtaining ISO 9000 for
quality standard and ISO 14000 for environmental regulations. Activities of the
concerned organizations will also be intensified.

Introduction of harmonized code for
export products:

Codes incorporating full description
of export goods will be introduced intervention
with the harmonized code followed by the world body in all import and export
L.C. forms.

Increase of production and quality improvement of agricultural products:

With a view to increasing the export of agricultural produces, especially fresh
vegetable, fruits and fresh flowers, emphasis will be laid on increasing
production, improvement of quality and development of the packaging system.

The fiscal and financial incentives
offered by the Export Policy will be reviewed at regular intervals and
necessary measures will be taken accordingly.

Appropriate measures will be taken to
simplify the export procedures and procedural difficulty, if any, will be
referred to the Task Force for immediate solution.

Establishment of an Export-Import
Bank shall be examined.

For development of infrastructure in
export trade, the following actions would be undertaken:

Establishment of an Information
Centre with network facilities at home and abroad;

(b) Establishment of a Foreign Trade and Investment Training
Institute for human resource development in commercial fields ;

Seek technical assistance for R
& D by setting up research cells in the Export Promotion Bureau and
Chambers of Commerce and Industry;

Seek technical assistance from the
World Bank for establishment of a Design and Fashion Institute.


Export trade has witnessed structural
changes due to globalization and liberalization of trade which demand changes
in the nature and pattern of the export services. In the light of such changed
demands restructuring of the Export Promotion Bureau shall be considered.