Business Initiative Leading Development (BUILD) stressed on Thursday that expanding duty-free raw material import facilities for non-bonded exporters is essential to accelerate export diversification and improve competitiveness.
At a high-level dialogue, BUILD presented evidence showing that the existing framework under Statutory Regulatory Order 384 of 2025 creates significant financial and operational barriers for non-bonded and small exporters.
BUILD Senior Research Associate Md Nooruzzaman said the requirement of a 100 per cent bank guarantee for duty-free raw material imports severely strains exporters’ cash flow, as the guarantee is encashed only after export proceeds are realised.
He said exporters must ensure at least 30 per cent value addition and maintain mandatory value added tax compliance through regular online submissions to qualify for the facility.
He said the scope of the statutory order is currently limited to only eight sectors, including furniture, electronics and light engineering, which restricts wider export potential.
BUILD compared Bangladesh’s regime with international practices, noting that Vietnam follows a duty-suspension model and India applies a deferred duty system, both of which reduce upfront financial pressure on exporters.
Based on these comparisons, BUILD recommended replacing bank guarantees with alternative instruments such as sponsor guarantees and aligning the order with the upcoming Import Policy Order 2025–28.
BUILD also urged removing sector-specific restrictions and ensuring full automation through integration of the Automated System for Customs Data and the Integrated Value Added Tax Administration System to improve efficiency and global competitiveness.
The dialogue titled “Duty-Free Import of Raw Materials beyond Bonded Warehouse Facility” was held at the BUILD conference room with participation from policymakers, government officials and private sector representatives.
The working session was moderated by BUILD Research Director Wasel Bin Shadat.
National Board of Revenue First Secretary Mohammad Naziur Rahman Miah said the statutory order is not a fixed document and will be updated over time, adding that the initial eight sectors were listed based on expressed interest and could be expanded.
He said the revenue authority is moving toward automation by abolishing coefficient requirements for bonded warehouse exporters and phasing out utilisation declaration and utilisation permit systems, with about 83 per cent of utilisation permits already automated.
He added that integration among the Bangladesh Garment Manufacturers and Exporters Association, Customs and other agencies is improving gradually.
Bangladesh Plastic Goods Manufacturers and Exporters Association Senior Deputy Secretary Md Shahidulla said value added tax authorities remain the controlling point and exporters must hold import registration certificate and export registration certificate licences, which differ from central bonded warehouse licences.
He said full duty drawbacks through the Duty Exemption and Drawback Office has never been realised in practice.
Bangladesh Stainless Steel Pipe Manufacturers Association Vice President Saifur Rahman said ease of doing business is critical for export diversification and suggested following the Chinese model of public-private partnership-based warehouses, noting that a committee is working on the issue at the National Board of Revenue.
Bangladesh Furniture Exporters Association CEO Md Abdur Rauf urged focusing on value addition criteria instead of utilisation permits, utilisation declarations and bank guarantees, while reducing lead time and enforcing strict punitive measures against misuse.
Bangla Chemical CEO M S Siddiqui said concentrating revenue policy authority in a single institution is ineffective, describing the 100 per cent bank guarantee requirement as inconsistent with global practice and warning against forcing products into negative lists.
Bangladesh Agro-processors Association former Vice President Shoaib Hasan proposed allowing 30 per cent duty-free raw material imports based on export performance, saying such an incentive could potentially double export volumes.
Small and Medium Enterprise Foundation Deputy Manager Mainul Islam urged aligning revenue policies with the Ministry of Industries and recommended including priority sectors under the National Industrial Policy 2022 and annually declared products of the Ministry of Commerce in the positive list.
He also said the Small and Medium Enterprise Foundation could create a sponsor guarantee fund for small and medium exporters if legally permitted.
Light Engineering and Foundry Manufacturers Association of Bangladesh Assistant General Manager Sharif Nawrin Akter suggested phased realisation of bank guarantees and said the current nine-month export time limit, extendable by only three months, is inadequate given order cancellations and delays in export proceeds.
Bangladesh Cement Manufacturers Association Executive Director Shankar Kumar Roy urged inclusion of the cement sector in the positive list due to its large domestic use.
Summing up, BUILD CEO Ferdaus Ara Begum said the organisation will compile the discussion into a report for submission to the National Board of Revenue.
She said the objective is to reform the statutory order so that small and medium exporters benefit, reliance on a single export product is reduced and export diversification accelerates.
