Bangladesh’s welding electrode manufacturers have warned that a sharp rise in duty on their key raw material could make local production unviable, as the National Board of Revenue (NBR) has changed the customs assessment process for imported Hot Rolled Non-Alloy Steel Wire Rod.
The Bangladesh Welding Electrode Manufacturers Association (BWEMA) said the change would raise the duty burden on the raw material to 88.51 per cent, while finished welding electrode products imported under HS Code 8311.30.00 face a duty rate of 52 per cent.
The association said it would not be possible for local manufacturers to import the raw material at the higher duty rate and then produce welding electrodes competitively.
In a letter to the NBR chairman on 21 September, BWEMA requested restoration of the concessional duty facility for Wire Rod imports or inclusion of the new HS Code under the existing SRO framework.
Why is local production under pressure?
BWEMA, the organisation of industrial enterprises manufacturing electrodes or welding rods in Bangladesh, said Hot Rolled Non-Alloy Steel Wire Rod is the main raw material for manufacturing welding electrode products.
The association said the product was previously mainly import-dependent but is now manufactured in Bangladesh by its member industrial enterprises, resulting in a significant decline in imports.
Through letter No. 08.01.0000.000.053.03.0013.26/417 dated 15 September 2026, BWEMA said NBR instructed that Wire Rod imported by VAT-registered electrode, wire drawing or electric cable clip manufacturers be assessed under HS Code 7213.91.10 instead of HS Code 7213.91.90 without the SRO facility.
The decision, made in accordance with GRI Rule-1 and GRI Rule-6, would result in the raw material being released at a duty rate of 88.51 per cent, according to the association.
BWEMA warned that the higher duty would prevent domestic industrial enterprises from manufacturing welding electrodes and encourage commercial importers to bring in finished welding electrode products.
It also said importing raw materials by paying the 88.51 per cent duty rate and then manufacturing welding electrodes would not be viable when finished welding electrodes imported under HS Code 8311.30.00 face a duty rate of 52 per cent.
Many member enterprises manufacturing welding electrodes and rods and supplying them to remote areas of Bangladesh would no longer be able to continue operations. These enterprises could turn into sick industries and their employees could lose jobs, the association warned.
Several consignments of raw materials imported by BWEMA members are currently held up at Chittagong Port due to complications relating to HS Code and duty. The affected industrial enterprises are facing additional financial losses of more than Tk1 lakh per day, including port and shipping demurrage.
To protect against such losses, BWEMA requested release of the consignments through provisional assessment in accordance with Section 93 of the Customs Act, 2023.
HS Code and SRO timeline
BWEMA said the NBR had previously provided concessional duty facilities for importing the raw material. The facility was available under HS Code 7213.91.90 through SRO No. 151-Law/2026/06/Customs dated 8 June 2026 and its amendment SRO No. 235-Law/2026/65/Customs dated 30 June 2026 for electrode, wire drawing and electric cable clip manufacturing industries.
Under the facility, Regulatory Duty and Supplementary Duty were reduced from 5 per cent and 45 per cent respectively to zero.
Earlier, similar consignments had been assessed under CPC facility under SRO No. 281-Law/2015/06 Customs dated 26 June 2015. In the 2023-24 and 2024-25 fiscal years, the raw material was assessed and released under HS Code 7213.91.10 following SRO No. 119-Law/2022/67/Customs dated 1 June 2022 and SRO No. 164-Law/2024/16/Customs dated 29 May 2024, according to the association.
BWEMA said NBR, in the 2025-26 and current 2026-27 fiscal years, consolidated the relevant HS Codes and re-designated the product under HS Code 7213.91.10 and, under the heading “Other”, HS Code 7213.91.90.
Until before the 2025-26 fiscal year budget, concessional facilities were available for electrode or wire drawing manufacturing industries under HS Code 7213.91.10, described as “7213.91.10 – Imported by Industrial IRC Holder VAT Compliant Electrode and Wire Drawing Industries”.
When the concessional facility was shifted to HS Code 7213.91.90 in the 2025-26 budget, BWEMA applied for HS Code 7213.91.10 to also be retained. During the 2026-27 fiscal year budget, it again applied for the SRO facility under HS Code 7213.91.10, but NBR retained the concessional facility under HS Code 7213.91.90, the association said.
BWEMA requested the NBR to review and withdraw its directive dated 15 September 2026 and arrange assessment and release of the raw material at the concessional rate under HS Code 7213.91.90 in accordance with the effective SRO No. 151-Law/2026/06/Customs dated 8 June 2026.
It also requested that if NBR considers Wire Rod appropriate for classification under HS Code 7213.91.10, the code should be included in Table-3 of the SRO and the concessional facility should be granted accordingly.
The association said prompt action by the NBR would protect domestic investment and employment.
