The government’s draft Import Policy Order (IPO) 2026–29 signals a strategic shift from an administratively controlled import regime towards a more facilitative, risk-based and digitally enabled trade framework.
The proposed policy introduces reforms aimed at simplifying import procedures, promoting industrialisation and export diversification, attracting foreign investment and preparing the country for the post-LDC trading environment while aligning with international best practices.
The draft incorporates several long-standing private sector recommendations, although some provisions may require further refinement to ensure policy coherence and avoid unintended consequences. If implemented effectively, the proposed measures could improve the ease of doing business, strengthen export competitiveness and support Bangladesh’s graduation journey.
One of the most significant additions is the introduction of provisions allowing the government to establish and operate Free Trade Zones (FTZs) and Central Warehouses, either directly or through appointed agents, as reflected in the recently announced Finance Bill 2026. The objective is to facilitate imports of essential commodities, promote export development and diversification and attract foreign investment.
Areas and infrastructure developed by BEZA, BEPZA, the Ministry of Shipping and the Bangladesh Investment Development Authority may be designated as FTZs. Within these zones, goods may be imported through a range of payment and financing mechanisms, including letters of credit, telegraphic transfers, sales contracts, free-of-cost arrangements and importer of record systems.
The flexibility in these provisions could improve supply chain resilience, reduce transaction costs and create modern logistics ecosystems that support export-oriented industries and foreign investors. However, these measures should also be aligned with the Customs Act 2023 for better facilitation.
The draft policy also introduces several measures to reduce procedural burdens and facilitate industrial investment. A key reform allows industrial and commercial importers to import goods and raw materials through purchase or sales contracts without opening letters of credit, subject to contractual terms and conditions. The provision at sixth clause of second chapter could give businesses greater flexibility in managing imports and financing arrangements.
The policy further simplifies the import of capital machinery and initial spare parts required to establish new industrial enterprises. No letter of credit, ad hoc Industrial Import Registration Certificate or prior approval from the Chief Controller will be required for importing sponsoring authority-approved capital machinery and initial spare parts.
Industries operating under the free sector will also no longer require formal approval letters from sponsoring authorities.
The draft also introduces provisions to encourage domestic investment, joint ventures and Hundred percent foreign-owned enterprises.
Commercial import procedures have also been simplified by removing several administrative requirements for local and foreign companies. The earlier provision permitting commercial imports against cash in foreign currency has been omitted.
Commercial importers will now be allowed to import industrial raw materials, packaging materials and spare parts without requiring cash in foreign currency.
The requirement to submit product details to the Office of the Chief Controller of Imports and Exports has also been removed, while radiation inspection requirements have largely been eliminated. These changes are expected to reduce compliance costs, improve import efficiency and facilitate SMEs.
The draft introduces a dedicated clause on trade liberalisation, reflecting a strategic shift towards modern customs administration and digital trade facilitation. This is particularly significant as Bangladesh prepares to graduate from the Least Developed Country (LDC) category and compete in a more challenging global trading environment.
The policy provides for the operationalisation of Authorised Economic Operators, advance import manifest systems, electronic duty collection, risk-based cargo clearance and end-to-end digitalisation of certification and payment processes. It also requires import-related information to be published on official websites, strengthening transparency and access to information.
Collectively, these measures align closely with Bangladesh’s commitments under the WTO Trade Facilitation Agreement and various regional and bilateral trade arrangements. Their successful implementation could reduce trade and logistics costs while improving supply chain efficiency.
Another notable feature is the attempt to broaden export facilitation beyond the ready-made garment (RMG) sector. Import facilities previously concentrated on the RMG and textile industries have been extended to specialised textiles, hosiery, leather and leather goods, footwear, shipbuilding and furniture industries.
Despite the expanded coverage, however, most provisions under Chapter 4, Clause 25 remain concentrated on the RMG and textile sectors. Further refinement may therefore be necessary to ensure a more balanced and level playing field for other promising export industries.
Another important addition is the introduction of free-of-cost (FoC) import limits based on the previous year’s export value for the RMG, leather and leather goods, footwear, shipbuilding and furniture industries.
The policy also allows non-bonded enterprises to import raw materials on a FoC basis against confirmed export orders, subject to bank guarantees covering applicable duties and taxes. If implemented effectively, these provisions could significantly improve the competitiveness of non-bonded exporters by enabling buyer-nominated sourcing arrangements without requiring foreign exchange remittances from Bangladesh.
The draft IPO also introduces minimum value-addition requirements for leather and leather goods, footwear, shipbuilding and furniture exports. The minimum thresholds are 30 per cent for leather products and footwear, 40 per cent for ships and 50 per cent for furniture. Value-addition requirements for the RMG sector have also been revised.
These provisions are intended to encourage deeper domestic processing and strengthen local supply chains to meet post-LDC graduation requirements. However, because these value-addition criteria are a prerequisite for cash incentive eligibility, they have already raised concerns among exporters, particularly in the RMG sector.
The policy substantially increases permissible sample import quantities to 3,000 pairs for the shoe and leather products sector and 3,000 pieces for export-oriented tannery industries. However, stakeholders continue to call for simpler sample import procedures and equal treatment for other sectors, particularly the pharmaceutical industry.
The draft also revises provisions relating to enterprises engaged in both domestic sales and exports. The revised rules appear to create more complex eligibility criteria and procedures for obtaining duty-free import facilities against bank guarantees. They should be aligned with the Customs SRO 384 and increase compliance burdens for local manufacturers seeking to expand into export markets.
Clarification and simplification will therefore be necessary to avoid implementation uncertainty and better support local industries with export potential.
The draft introduces significant reforms to commercial food imports through risk management-based inspection systems in line with international best practices. The reform is expected to reduce unnecessary inspections, speed up cargo clearance and improve port efficiency.
Similarly, the introduction of a mandatory 48-hour deadline for issuing testing reports for refined bleached deodorised palm stearin should improve supply chain predictability and reduce delays.
The policy also promotes domestic manufacturing of pesticides and pest-control substances by allowing imports of approved raw materials and inputs while strengthening regulatory oversight of harmful substances and Good Agricultural Practices.
The draft IPO further simplifies procedures for importing raw cotton from the United States. Country-of-origin information will no longer be required on every cotton bale, provided it is included in the phytosanitary certificate. The provisions are further relaxed for 100 per cent export-oriented industries and could facilitate trade with one of the world’s largest cotton exporters.
The timing of these reforms is particularly significant. As Bangladesh prepares for the post-LDC era amid an increasingly uncertain global economic environment, competitiveness will depend less on preferential market access and more on efficient trade procedures, lower logistics costs, diversified exports and the ability to attract export-oriented foreign direct investment.
By introducing trade liberalisation measures, digital customs procedures, risk-based inspections and investment facilitation mechanisms, the draft IPO 2026–29 seeks to address many of these structural challenges. At the same time, several areas merit further refinement and more equal treatment for other sectors.
If implemented effectively and supported by institutional reforms, the policy could become a critical instrument for reducing the cost of doing business, strengthening supply chain efficiency and positioning Bangladesh as a more competitive and investment-friendly trading hub in the post-LDC era.
The author is a Senior Research Associate at Business Initiative Leading Development.
Views expressed in the article are solely those of the author.
