Bangladesh’s proposed FY2026-27 budget outlines a series of reforms aimed at modernising the country’s logistics sector.
The measures include establishing free trade zones, allowing greater foreign investment in Inland Container Depots (ICDs) and off-dock facilities, introducing air cargo operator stations, and updating regulatory frameworks for port and terminal management.
The government views the initiatives as part of efforts to build a more efficient and competitive logistics ecosystem, although industry stakeholders question whether the measures will be sufficient to address longstanding structural inefficiencies.
The logistics sector remains one of the country’s most persistent trade bottlenecks. Around 92 per cent of Bangladesh’s import and export activities are handled through Chattogram Port, which manages nearly 98 per cent of national container traffic.
The port processes approximately 3.4 million containers and more than 138 million metric tonnes of cargo annually, but only 20-25 per cent of containers are cleared through ICDs, creating congestion, clearance delays and rising logistics costs, particularly during peak export seasons.
One of the most significant proposals in the budget is the establishment of free trade zones through amendments to the Customs Act. Under the proposed framework, designated zones would allow the import, storage, grading, packaging, production and export-oriented processing of goods without customs duties and taxes.
Supporters say the zones could help Bangladesh integrate more deeply into global supply chains by reducing regulatory barriers, attracting foreign investment and enabling faster production systems. Experts also expect the initiative to create jobs, strengthen industrial clusters and facilitate technology transfer through multinational participation.
The budget also proposes removing the existing 49 per cent cap on foreign ownership in private off-dock facilities and ICD operations, an issue that has long been debated within the logistics industry.
Industry operators say greater foreign participation would bring advanced technology, higher operational standards and expanded cargo handling capacity by allowing global logistics firms to invest directly in Bangladesh’s inland cargo infrastructure.
Stakeholders believe the move could ease pressure on ports, improve efficiency and modernise storage and distribution systems, provided it is supported by clear regulations.
Despite broad support for modernisation efforts, parts of the proposed ICD policy have raised concerns among operators.
Managing Director of VERTEX Off-Dock Logistics Services Ltd Imran Fahim Noor said some clauses in the draft ICD policy were “not realistic” and could create operational complications.
He cited provisions under the proposed Port Act 2023 framework and Section 13 of the ICD policy that hold ICD and Container Freight Station operators liable for cargo loss, shortages or damage.
“If an exporter delivers fewer goods at the loading point or cargo quality deteriorates during sea transport, why should ICD authorities be held responsible?” he said.
Noor warned the provisions could deter investment by imposing liability for risks beyond operators’ control. While supporting the government’s logistics modernisation efforts, he said accountability measures must be fair and practical.
He added that his organisation had submitted a note of dissent seeking revisions that better reflect supply chain realities.
Former Vice President of the Bangladesh Freight Forwarders Association Khairul Alam Suzan said Bangladesh must pursue structural and policy reforms to keep pace with rapid changes in global logistics, which now encompasses the entire supply chain from sourcing and production to shipping and final delivery.
“In modern trade, sellers are often responsible for delivering goods directly to buyers’ designated locations, including warehouses and showrooms,” he said.
Suzan cited weak ICT integration and the lack of an effective logistics policy as major shortcomings. He welcomed the proposed relaxation of foreign investment restrictions, saying lifting the 49 per cent foreign ownership cap in the logistics and ICT sectors could boost investment, improve efficiency and accelerate modernisation.
He added that landlocked countries such as Nepal, Afghanistan and Switzerland have built efficient logistics systems through freight forwarders and integrated supply chain operators. Bangladesh must better define and strengthen the role of freight forwarders to enable internationally competitive service delivery.
Suzan also said effective policy formulation requires participation from all stakeholders, including field operators, mid-level professionals and policymakers, to ensure reforms are practical and implementable.
The budget further proposes establishing air cargo operator stations to increase private sector participation in air freight services. Under the initiative, Dhaka, Chattogram and Sylhet airports are expected to be gradually developed into integrated logistics hubs.
In parallel, new regulatory frameworks are being prepared to allow greater private sector participation in port operations. The measures are intended to reduce cargo handling times, improve operational efficiency and lower logistics costs.
