RMG suppliers to get export subsidy on 20% value add

Apparel exporters in the country from now on can enjoy cash incentives and subsidies from the government on exports with a 20 per cent value addition.

Bangladesh Bank has reduced the value addition barrier from 30 per cent, according to a circular issued by the Foreign Exchange Policy Department (FEPD) of the central bank on Monday.

Local value addition is calculated by deducting the import cost of materials used in production from the net FOB (free on board) export price.

In September of last year, the central bank published a circular on the cash incentive against export items for Fiscal Year (FY) 2021-22.

According to that circular, RMG exporters are eligible for a 1 to 4 per cent subsidy based on several criteria. For general export, all RMG exporters typically receive a 1 per cent cash incentive.

For the current financial year, new and emerging markets, and small and medium industries in RMG that did not use the bond facility will receive a 4 per cent cash incentive. Export subsidy applications can be submitted within 180 days after repatriating export profits, and any single person can submit one or more applications for all repatriated revenue for the financial year.