The government has formed a taskforce to oversee its deregulation drive and will launch a dashboard from the first week of next month to monitor the progress of project implementation in every ministry, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday.

Running a business in Bangladesh is not possible without deregulation, the minister said at a discussion on the proposed national budget organised by the Centre for Policy Dialogue (CPD) at Lakeshore Hotel in Dhaka.

“Those who will create barriers in deregulation, we will show them the way out, as we are working for the country, for the people. We are an elected government,” he said.

He noted that project preparation alone currently takes more than one and a half years, with implementation taking considerably longer still, driving up project costs, the burden of which is ultimately borne by ordinary people.

To keep such delays in check, the government is rolling out dashboards in each ministry that will track implementation progress on a daily basis, said Khosru, who is also the planning minister.

As part of broader institutional reform, the government will also separate the National Board of Revenue’s (NBR) policy formulation and tax collection functions, he said. The policy formulation wing will be under a panel of experts, while a panel of bureaucrats will handle implementation.

He added that the traditional system of Letters of Credit will also be revised, as LC-related delays slow down trade and raise the cost of doing business.

Responding to criticism from various quarters over the budget’s size and targeted revenue mobilisation, the minister said the government would issue bonds to help finance the budget and reduce reliance on bank borrowing, in order to free up funds for the private sector.

He said he was hopeful these reforms would help raise the tax-to-GDP ratio.

Khosru also mentioned that the government has worked to make the Family Card programme transparent, with safeguards against political interference, to ensure intended beneficiaries receive the benefits.

He identified gas, electricity and reliable internet connectivity as major challenges, saying the government has been working to address them.

The minister projected that it may take around two years to stabilise the current fragile economy, with signs of broader prosperity expected to follow from the fourth and fifth years.

He also said the government has allocated Tk 800 crore for the creative economy, to provide loans for developing theatres and the sports economy and to support singers, bringing them into mainstream economic activity.

CPD FLAGS IMPLEMENTATION RISKS

Presenting the keynote paper at the event, CPD Executive Director Fahmida Khatun said the budget relies on optimistic assumptions and that its success will depend heavily on the quality of execution.

“This will require strong institutions that have the capacity to implement the budget efficiently and deliver tangible outcomes,” she said, adding that the budget represents the new government’s first major opportunity to demonstrate its ability to drive economic recovery through sustained structural reforms.

In the keynote paper, CPD laid out eight key observations on the proposed budget. The think tank said macroeconomic projections for FY2026-27 appear optimistic and warned that the proposed fiscal framework is unlikely to hold.

While public expenditure has been reprioritised towards human capital sectors, CPD noted that the Annual Development Programme, though ambitious, faces concerns over effective implementation.

The think tank also said fiscal measures reflect a degree of predictability but raise equity concerns, and flagged the absence of a comprehensive roadmap to support Bangladesh’s LDC graduation.

It further observed that the social sectors prioritised in the budget lack adequate implementation capacity, and that allocations meant to drive employment generation point to a deeper structural challenge.

Businessmen, ministers and economists participated in the discussion moderated by CPD Distinguished Fellow Mustafizur Rahman.

Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre (PPRC), called on the government to formulate a roadmap to implement the proposed budget, as there are concerns about its capacity for implementation.

The government should also publish a three-month progress report on budget implementation so that people can know its real status, he said.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), said the proposed budget stands at 13 percent of GDP, while 23 percent of GDP would be required to achieve the government’s targeted outcomes.

He said the Family Card programme could reduce the poverty rate by 7 percentage points if properly implemented.

To reach the government’s target of a $1 trillion economy by 2034, Razzaque said GDP growth would need to reach 8 percent, and the investment-to-GDP ratio, combining public and private investment, would need to rise to 40 percent from the current 28 percent.

He said the government should act quickly to achieve this while also controlling high inflation, noting that the revenue target is ambitious even as official development assistance continues to decline.

Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, said the private sector continues to face significant difficulties due to inadequate energy supply and high bank interest rates, despite various measures taken to address them.

Montu Ghosh, president of the Bangladesh Garment Workers Trade Union Centre, said budget implementation will be difficult given existing capacity constraints, and that the lives of workers are unlikely to change significantly as their concerns have not been given adequate importance in the proposal.

He noted that workers and union leaders have long demanded a rationing system for garment workers, which has yet to be introduced.

He also criticised the government’s bank borrowing plans, warning that they could affect credit flow to the private sector.

Bangladesh has proposed allowing individual taxpayers to submit income tax returns throughout the year, with a 5 percent rebate for those filing in the first quarter, under changes outlined in the 2026–27 budget proposal.

The proposal comes as repeated extensions of return filing deadlines have still failed to bring in the expected number of taxpayers, prompting revisions through the Finance Bill 2026.Bangladesh economic report

Under the proposed amendment to the Income Tax Act, taxpayers will be able to file returns across the entire fiscal year after the end of an income year.

However, tax payment and incentive calculations will depend on the quarter in which the return is submitted.

According to the Finance Bill 2026, individual taxpayers filing returns between Jul 1 and Sept 30 -- the first quarter -- will be eligible for a 5 percent rebate for early submission, capped at Tk 25,000.

However, the Bill does not provide detailed mechanisms for how the rebate will be applied, raising concerns among tax analysts.

Experts say it would be preferable to adjust incentives at the point of tax payment.

They caution that if rebates are issued through refunds after full tax payment, taxpayers may fear delays or non-receipt.

They also note that if adjustments are tied to audit processes, many may not perceive it as a meaningful incentive.

There are already complaints that excess advance tax or withholding tax is often not refunded promptly, with allegations of administrative delays and informal payments in some cases.

Taxpayers filing in the second quarter, from Oct 1 to Dec 31, will not receive any rebate but will also not face penalties.

Those filing in the third quarter, from Jan 1 to Mar 31, will be subject to a late filing penalty of 2 percent of tax or a maximum of Tk 3,000.

Returns filed in the final quarter, from Apr 1 to Jun 30, will attract a penalty of 5 percent of tax or a maximum of Tk 5,000.

Under the current system, taxpayers generally submit returns by Nov 30 without additional tax, and there is no incentive for early filing.

The government may extend deadlines by one month at a time under special consideration, a practice commonly seen each fiscal year.

Previously, extensions ran until December or January, but in recent years deadlines have been pushed to February and March.

In the current fiscal year, multiple extensions and the introduction of mandatory online filing allowed taxpayers to get up to 90 additional days, with many effectively filing throughout the year without penalty.

The government is set to split the National Board of Revenue into separate policy and implementation wings as part of broader efforts to address Bangladesh's persistently low tax-to-GDP ratio and strengthen revenue administration, Finance Minister Amir Khosru Mahmud Chowdhury said today (21 June).

Speaking at a budget dialogue organised by the Centre for Policy Dialogue at a hotel in Dhaka, Khosru said the planned restructuring would separate tax policy formulation from tax administration, with experts rather than bureaucrats taking the lead in designing tax policies.

He argued that weaknesses in tax policy formulation were at the core of the country's revenue challenges.
"Bangladesh's major taxation problem and NBR's problem is policy-making. If you get that right to start with, then 50% of the problem is solved," he said.According to the minister, the policy wing will comprise tax specialists and individuals with a strong understanding of Bangladesh's socio-economic realities, while career bureaucrats will focus on implementation and enforcement.

"We want an expert group to make the policy, not the bureaucrats. The expert group will make the policy. Bureaucrats' job is to execute it," he said.

The interim government on 13 May 2025 proceeded with the reforms, officially dissolving the NBR and establishing two separate entities -- the Revenue Policy Division and the Revenue Management Division.

The move later got stalled amid protest by revenue officials who viewed the move as undermining their roles and the integrity of the tax administration system.

Centre for Policy Dialogue (CPD) on Sunday said the national budget for FY2026-27 reflects a clear philosophy of economic recovery through human development, but its ambitious macroeconomic targets rest on shaky ground and the fiscal framework is unlikely to hold as proposed.

CPD Executive Director Dr Fahmida Khatun presented the think tank's Independent Review of Bangladesh's Development (IRBD) analysis at its Budget Dialogue 2026 held at a hotel in Gulshan, UNB reports.

The think tank put forward eight key observations on the FY27 budget, which Finance Minister Amir Khosru Mahmud Chowdhury presented to parliament on June 11.

CPD noted that the government's GDP growth target of 6.5 per cent represents a recovery from an estimated 5.0 per cent in the revised FY26 budget, but provisional data from the Bangladesh Bureau of Statistics (BBS) puts actual FY26 growth at only 4.14 per cent.

On revenue mobilisation, CPD said the government targets an 18.2 per cent increase in revenue collection to Tk 6.95 trillion (Tk 695,000 crore). However, its own projection based on data through March 2026 suggests actual FY26 collection may be around Tk 4.5 trillion (Tk 450,000 crore), implying that the required growth would be closer to 54.4 per cent.

The think tank welcomed the budget's reprioritisation of public expenditure toward human capital sectors, noting that allocations for health and education increased by 124 per cent and 42.7 per cent, respectively, compared with the revised FY26 budget.Bangladesh stock market

However, it cautioned that both sectors suffer from persistently weak budget utilisation, with health-sector development spending utilisation falling from 80 per cent in FY15 to just 30 per cent in FY25.

On the Annual Development Programme (ADP), CPD said the Tk 3 trillion (Tk 300,000 crore) allocation, a 50 per cent increase over the revised FY26 figure, reflects an ambitious fiscal stance. However, only 35.4 per cent of last year's ADP was spent in the first 10 months, signalling low absorptive capacity.

It also noted that none of the eight mega projects scheduled for completion in FY27, including the Rooppur Nuclear Power Plant, is expected to be finished on time.

CPD raised equity concerns over the personal income tax structure, pointing out that lower-income groups face a proportionately higher increase in tax burden than those earning more than Tk 3 million annually.

On social protection, the Social Safety Net Programme (SSNP) allocation rose 13.9 per cent to Tk 1.44 trillion (Tk 144,000 crore) in FY27. However, CPD observed that pension management and agricultural subsidies together account for 43.2 per cent of the total SSNP allocation, although these programmes are not strictly targeted at the poor.

Regarding the government's pledge to create 10 million new jobs within 18 months, CPD found that budget allocations for four key employment-related ministries either declined or remained stagnant as a share of total expenditure.

The Ministry of Commerce recorded the sharpest cut, with its allocation reduced from Tk 9.09 billion (Tk 909 crore) to Tk 3.29 billion (Tk 329 crore).

CPD also highlighted the absence of a medium-term roadmap to address preference erosion ahead of Bangladesh's graduation from the least developed country (LDC) category, despite the government's formal request for a three-year deferral in February 2026.

“This budget is the first major opportunity for the new government to demonstrate its ability to drive economic recovery through sustained structural reforms,” Fahmida Khatun said, adding that its success would ultimately depend on the quality of implementation and the strength of institutional capacity.

Finance Minister Amir Khosru Mahmud Chowdhury on Sunday said the government will overhaul its public finance architecture to fund the proposed budget for fiscal year 2026-27 while minimising the debt burden on the economy.

“We cannot keep looking towards the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB). We need to restructure our own public financing,” he said while speaking at the “CPD Budget Dialogue 2026” organised by the Centre for Policy Dialogue (CPD) at a city hotel.

The minister said the government is working to develop alternative financing channels and will introduce market-based financing mechanisms to fund the budget.

He noted that the gap between multilateral financing rates and market interest rates is narrowing, making borrowing costs considerably higher and leaving little option but to rely on market-based instruments.

Announcing a phased withdrawal from local bank borrowing, Khosru said local banks are charging 12-14 per cent interest, a burden that even the private sector struggles to bear. “It is simply not feasible for the government to sustain such borrowing costs.”

On broader economic challenges, he said the Middle East labour market, worth $4 billion, is facing headwinds and that the government inherited hundreds of crores of taka in outstanding bills across all sectors upon taking office.

The minister also noted that the government had only one and a half months to prepare a budget that normally takes six months.

He said the government inherited 1,300 projects from the previous administration, many of which were conceived to serve personal interests, and that a number of schemes have since been cancelled or repurposed. Projects that were 80 per cent complete were being finished despite uncertain returns.

To ensure accountability, Khosru announced that an ADP dashboard will go live in the first week of July, allowing real-time tracking of project progress and implementation status.

On trade facilitation, he said Bangladesh will gradually move away from the letter of credit (LC) system towards direct payment mechanisms for import and export transactions, in line with global practice, allowing credible businesses to trade internationally without opening LCs.

On education, the minister said the allocation will be raised to 5 per cent of the ADP by the end of the government's current term, up from the current 2 per cent.

He stressed that vocational training will receive the strongest emphasis this year, citing China's model, where 60 per cent of students pursue vocational education after secondary school. “Bangladesh's certificates hold little value in the job market because skills are absent. Vocational training is how we bridge that gap.”

On health, Khosru said the government is working towards establishing universal healthcare, with preventive healthcare as the first priority.

Addressing questions over the Family Card programme, he said 72,000 people have already received cards under a pilot project, which he described as the largest social protection initiative in Bangladesh's history.

The minister said the selection process has been deliberately kept free of political interference, with a new formula developed to ensure fairness at both the local and central levels.

He acknowledged a roughly 1-1.5 per cent error rate and said the government is actively working to identify and resolve the causes.

Khosru reaffirmed the government's commitment to carrying out all necessary economic reforms during its tenure.

The government’s proposal to significantly reduce import duties on plug-in hybrid electric vehicles (PHEVs) has raised concerns among local automobile manufacturers, who say the move could encourage imports at the expense of domestic production.

In a letter to National Board of Revenue (NBR) Chairman on June 17, the Bangladesh Automobiles Assemblers and Manufacturers Association (BAAMA) urged the tax authority to revise the proposed fiscal measures, arguing that they create a policy imbalance between imports and local manufacturing.

“The existing budget framework will encourage imports of completely built vehicles rather than the establishment of PHEV manufacturing and assembly operations in Bangladesh,” Hafizur Rahman Khan, president of BAAMA, wrote in the letter.

In its letter, the association called for extending to local PHEV manufacturers the same level of support currently available to EV producers.

Under the proposed budget for fiscal year 2026-27, the total tax incidence on completely built-up (CBU) PHEVs with engine capacities of up to 1,800cc would fall to 73.44 percent from 93.16 percent. For vehicles between 1,801cc and 2,000cc, it would decline to 96.10 percent from 132.66 percent.

However, BAAMA says comparable incentives have not been offered for the local production, assembly and value addition of PHEVs.

The association noted that while the government recently introduced special incentives for locally manufactured electric vehicles (EVs) through SRO No. 163-Ion/2026/18/Customs, issued on June 8, no similar support has been announced for PHEV production.

Industry representatives say this could make importing fully built vehicles more attractive than investing in manufacturing facilities and supply chains in Bangladesh.

The concern comes as hybrid vehicles continue to gain popularity. Data cited by BAAMA from Bangladesh Road Transport Authority (BRTA) registrations show hybrids accounted for 57 percent of passenger vehicle registrations in 2025, up from 42 percent in 2021. Over the same period, the share of conventional internal combustion engine (ICE) vehicles fell from 58 percent to 42 percent.

Despite growing interest in cleaner transport, fully electric vehicles remain a niche segment, accounting for only 0.57 percent of registrations last year. Industry stakeholders attribute the slow uptake to limited charging infrastructure, high battery costs and concerns over long-distance travel.

BAAMA argues that Bangladesh is in a transition phase between conventional fuel-powered vehicles and full electrification, making PHEVs an effective intermediate technology that combines electric driving capability with the flexibility of a conventional engine.

The association said PHEVs can reduce fuel consumption by 40 percent to 60 percent, helping cut fuel import costs while lowering carbon emissions and air pollution.

The debate also has implications for Bangladesh’s emerging automotive industry. Several global brands, including Hyundai, Mitsubishi, Chery and Proton, have invested in local assembly operations through partnerships with Bangladeshi companies. Chinese EV manufacturer BYD has also initiated plans to establish manufacturing operations through a joint venture with Runner Automobiles.

According to BAAMA, policies that favour imports over domestic production could affect future investment decisions and discourage expansion by existing manufacturers.

The association also said the proposed tariff structure departs from the principle of tariff escalation, under which higher duties are imposed on finished vehicles while lower tariffs and incentives support local assembly, component manufacturing and value addition.

Such frameworks are intended to promote industrialisation, employment, technology transfer and the development of domestic supply chains.

BAAMA also referred to the Automobile Industry Development Policy 2021, which commits to supporting local manufacturing through fiscal incentives and investment-friendly measures while promoting fuel-efficient and environmentally friendly vehicle production.

An NBR official, speaking on condition of anonymity, said the proposed duty reduction on plug-in hybrid electric vehicles is part of the government’s broader strategy to promote energy-efficient and environmentally friendly transport

The measure is expected to reduce reliance on fossil fuels and accelerate the adoption of cleaner vehicle technologies.

The official said the government has not overlooked the interests of local manufacturers, noting that a range of fiscal and policy incentives has already been introduced to support the domestic production and assembly of electric vehicles.

Issues related to PHEVs remain under review, and any future policy decisions will seek to balance industrial development, investment promotion, technology transfer, and environmental sustainability.

A multi-year credit drought in Bangladesh’s private sector has deepened while government borrowing from the banking system has increased. Central bank data show the government took BDT 756.2 billion more in net bank credit during the first ten months of the 2025–26 fiscal year than it did a year earlier. Private-sector borrowing fell by BDT 250 billion over the same period. The trend intensified through May and June, officials said, leaving entrepreneurs more credit-starved than before.

Net government borrowing from banks stood at BDT 325.62 billion in the July to April period of FY 2024–25. It reached BDT 1,081.82 billion in the same stretch this year — a threefold rise. The original budget had set a bank-borrowing target of BDT 1,040 billion. The revised budget raised it to BDT 1,180 billion.

Finance ministry and Bangladesh Bank officials now expect net borrowing to exceed even the revised target by the fiscal year-end. The revenue shortfall had already topped BDT 1.04 trillion by April and is forecast to widen further in May and June. A large portion of that gap must be met through bank credit.

This outsized reliance on banks is pushing the private sector into an ever more precarious condition, according to former finance secretary and comptroller and auditor general Mohammad Muslim Chowdhury. “Government expenditure far exceeds revenue capacity. That’s why borrowing is overshooting targets,” he told Bonik Barta. “High interest rates on treasury bills and bonds are also driving up the cost of this borrowing. No effective steps to curb spending or raise revenue are yet visible.”

“The private sector has been struggling for years. Entrepreneurs are either not getting bank loans or have no appetite to expand their businesses,” the former CAG said. “Interest rates are also quite high, and the prevailing economic conditions don’t favour a private-sector revival. To create jobs and get the economy moving, the private sector must be rejuvenated. There’s no alternative to increasing credit flow.”

The private sector accounts for roughly 95 percent of employment and more than 80 percent of GDP in Bangladesh. Yet it is this engine of the economy that has been languishing for years. Many banks have now withdrawn from private lending after a third of their loans turned non-performing. Central bank data show private-sector credit growth was a mere 4.75 percent in April this year — a nadir that bank executives call rare in the country’s history.

Even that meagre expansion does not signal fresh lending, the executives say. It reflects the capitalisation of unpaid interest on defaulted loans. Credit extended through past irregularities and graft has gone largely bad, yielding no revenue for the lenders. The accrual of overdue interest inflates the loan books of weak banks, while sounder lenders have seen their portfolios shrink.

BRAC Bank, widely rated as one of the country’s best-run banks, reported an outstanding loan book of BDT 731.40 billion at the end of December. By end-March it had fallen to BDT 717.08 billion. Over the same period, its investments in government bills and bonds climbed from BDT 419.37 billion to BDT 449.65 billion. Most healthier banks show a similar shift.

Central bank data corroborate the picture. Net private-sector credit flow reached BDT 558.38 billion in the first ten months of FY 2025–26, against BDT 805.93 billion in the same stretch of the 2024–25 fiscal year — a drop of BDT 247.55 billion.

Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, traced the imbalance to government yields. “The government is paying 10 to 12 percent on treasury bills and bonds. For three or four years, banks have preferred lending to the state over entrepreneurs,” he told Bonik Barta. “Unless government borrowing demand falls, the private-sector crisis won’t end. Interest rates were hiked in the name of containing inflation, but we see inflation rising instead. No entrepreneur can run a business at 14 or 15 percent interest. If this stagnation continues, the economy will face a far bigger disaster.”

When the BNP government took office in February this year, total public debt stood at more than BDT 23 trillion. By end-March it had climbed to nearly BDT 24 trillion, of which BDT 6.41 trillion was owed to the banking system. There is no sign the borrowing will slow soon. The finance division’s latest projections show that on the current trajectory the debt stock will reach roughly BDT 34 trillion by the 2028–29 fiscal year.

The division’s medium-term macroeconomic policy statement warns that debt will rise to a level that places heavy strain on the wider economy, private-sector growth and foreign-exchange reserves. It projects the total at BDT 26.33 trillion by the close of FY 2026–27, BDT 29.56 trillion the following year and BDT 33.77 trillion in FY 2028–29. Domestic borrowing would account for BDT 18.80 trillion and external debt for BDT 14.97 trillion.

The surge is multiplying interest costs. The government will pay BDT 1.27 trillion in interest in FY 2026–27, rising to BDT 1.62 trillion two years later. A large share of the budget will consequently be absorbed by servicing past obligations, squeezing development spending. Because the bulk of domestic debt is raised from banks, the private sector will suffer further.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh and managing director of City Bank PLC, said private credit demand has collapsed. “For several years, entrepreneurs have retreated from business expansion. Hardly any new entrepreneurs have emerged. That’s why private credit growth has dropped to around 4 percent. I have never seen such low demand in my banking career,” he told Bonik Barta.

Arefin said the government and central bank have taken steps to revive the private sector. “Bangladesh Bank has created a BDT 600 billion incentive fund. If implemented, the private sector will recover. I expect banks to play an effective role in implementing the scheme.”

Finance and Planning Minister Amir Khosru Mahmud Chowdhury said on Sunday the government is moving towards market-based and alternative financing while reducing reliance on bank borrowing, arguing that excessive state borrowing from banks puts pressure on private sector investment.

He made the remarks at a budget review dialogue in Dhaka organised by the Centre for Policy Dialogue, noting that steps to reduce reliance are included in the 2025–26 and 2026–27 budgets.

“I’ve been saying for 10 years that the government shouldn’t borrow excessively from domestic banks,” he said. “When the government takes money at 10 to 13 percent interest, it becomes difficult for the private sector to survive, and the question of how such expensive loans will be repaid looms large.”

The current FY26 budget will spend about BDT 1.25 trillion on interest payments, he said, limiting the government’s fiscal space. The budget was prepared in about one and a half months instead of the usual six, and the government inherited arrears from the previous administration, including about BDT 5 billion in unpaid electricity bills.

The minister said the government wants to transfer cash directly to housewives or eligible family members through family cards, without intermediaries. He said the mechanism recognises women’s domestic labour and is intended to strengthen social resilience, not only serve as financial assistance. Direct support for disabled people and food-security measures for farmers are also being expanded.

Despite constraints, education spending is set at 2 percent of GDP, with a target of raising it to 5 percent, he said. Preventive healthcare is being prioritised to reduce households’ out-of-pocket medical costs, alongside emphasis on skill development, reskilling and new skills creation.

Tyre importers, dealers and transport operators have urged the government to withdraw a proposed 20 percent supplementary duty on commercial vehicle tyres, arguing that the measure would increase transport costs and add to inflationary pressures.

At a press conference in Chattogram yesterday, leaders of the Chattogram Tyre Tube Importers and Dealers Group said the proposed duty would raise the overall tax incidence on imported commercial vehicle tyres to 96.1 percent from 64.25 percent.

They alleged that the measure seeks to protect local manufacturers, who meet only 10-15 percent of domestic demand, at the expense of an import-dependent market that supplies around 85-90 percent of the country’s commercial vehicle tyres.

“Tyres are not luxury goods; they are essential to the transport and supply chain,” said Main Uddin Ahmed, president of the organisation. “Higher tyre prices will increase operating costs for trucks, buses and cargo vehicles, ultimately pushing up the prices of goods and services.”

Rejecting allegations of duty evasion in tyre imports, he said imported tyres undergo 100 percent physical inspection and are assessed based on weight, leaving little room for under-invoicing or tax avoidance.

Representatives of transport owners’ associations who attended the event warned that higher tyre costs would raise freight charges and passenger fares, creating a ripple effect across the economy and putting additional pressure on consumers.

The speakers called on the government to reconsider the proposed duty and engage with stakeholders before finalising the measure.

Commerce Minister Khandakar Abdul Muktadir on Sunday said that the government is strengthening efforts to introduce a centralised online one-stop investment service to create a more business-friendly environment by simplifying and integrating licensing and approval procedures.

“The government is working to make the licensing and approval process easier, faster and more integrated so that investors don’t have to move from one office to another,” he said.

The minister made the remarks during a courtesy meeting with a delegation of the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI), led by its President Tareq Rafi Bhuiyan, at the Ministry of Commerce conference room in the capital this morning.

Commerce Secretary Md Ataur Rahman Khan was also present at the meeting.

Highlighting ongoing reforms to improve the investment climate, Muktadir said the government aims to establish a digital platform through which investors can obtain all necessary approvals and services efficiently.

Referring to factory establishment procedures, he said completing all approvals within 15 days is not always feasible because the process requires inspections related to safety, risk management, fire protection, and environmental compliance.

To prevent delays in investment activities, he said, the government plans to introduce provisional licences that will allow investors to begin preliminary operations while completing the remaining formalities.

The minister said a roadmap has already been prepared to shorten approval timelines, with particular attention being given to sector-specific licensing requirements.

“Licensing needs vary significantly from sector to sector. The requirements for a power plant are different from those for a textile factory,” he noted.

He also announced that the Bangladesh Investment Development Authority (BIDA) will coordinate factory inspections under a unified mechanism.

Through this system, BIDA will schedule inspection dates and bring all relevant agencies together for a single joint visit, reducing administrative burdens on investors, he added.

On sustainable transportation, Muktadir said the government is seeking to reduce dependence on conventional fuels by promoting electric and hybrid vehicles.

While the government remains positive about the transition to electric vehicles, he said Bangladesh is not yet fully prepared for a complete shift to EVs.

As an interim measure, he said, the government is prioritising the import and use of plug-in hybrid vehicles to strengthen economic and energy security.

During the meeting, the JBCCI delegation stressed the importance of expanding Japanese investment and trade in Bangladesh and encouraged greater adoption of sustainable technologies.

The delegation also welcomed the proposed Bangladesh-Japan Free Trade Agreement, saying it would further enhance bilateral trade and investment cooperation between the two countries.

Reaffirming the government’s commitment to Japanese investors, the minister said, “We want to create an investment environment where an investor can access all necessary services with a single click on an online platform.”

The National Board of Revenue (NBR) has recorded its highest-ever revenue collection during the first 11 months of a fiscal year, collecting Tk3,60,642 crore during the July 2025 to May 2026 period, surpassing all previous records.

According to a statement issued today (21 June), revenue collection during the period increased by Tk32,856.22 crore compared with Tk3,27,785.78 crore collected during the same period of FY25.

The year-on-year growth rate stood at 10.02%.
The revised revenue collection target for FY26 was set at Tk5,03,000 crore. Against the target of Tk442,084 crore for the first 11 months, actual collection reached Tk3,60,642 crore, achieving 81.58% of the target and leaving a shortfall of Tk81,442 crore.

Among the major revenue wings, customs revenue grew by 7.08%, VAT collection rose by 10.05%, and income tax revenue increased by 12.54% during the period.

The NBR said revenue collection reached Tk3,89,953 crore by 20 June 2026, after collecting Tk29,311 crore during the first 20 days of June. This figure has already exceeded the total revenue collection of Tk3,70,843.03 crore recorded in the entire previous fiscal year.

The revenue authority expressed optimism that an additional Tk25,000 crore could be collected during the final 10 days of June, allowing total revenue collection in FY26 to reach a record Tk4,15,000 crore.

If achieved, the figure would still fall short of the revised target by around Tk88,000 crore but would exceed the previous fiscal year's collection by Tk43,157 crore.

To accelerate revenue mobilisation, the NBR has formed three separate task forces comprising field-level officials from the income tax, VAT and customs wings.

The task forces have undertaken various initiatives, including expediting cases pending before appellate authorities, tribunals and higher courts, strengthening tax recovery efforts, enhancing audit and compliance activities, monitoring tax and VAT collection at source, and intensifying customs risk management and post-clearance audits.

The NBR said these measures have helped boost revenue collection and that efforts to mobilise resources for the country will continue.

Bangladesh's cashew processing industry leaders have expressed concern over proposed tariff changes in the FY2026-27 budget, warning that the new structure could make imported finished cashews cheaper than locally processed products and threaten the viability of domestic processors.

Industry leaders say the proposed measures create an inverted duty structure by increasing the tax burden on imported raw cashew nuts while allowing finished cashew imports from India to continue benefiting from tariff preferences under the South Asian Free Trade Area (Safta) agreement.

They argue that the policy could put around 20 processing factories at risk and discourage planned investments worth hundreds of crores of taka.

The issue involves two categories of products – raw cashew nuts in shell, which are used by local processors, and shelled cashew kernels, the finished product sold in the market.

Industry insiders say five kilograms of raw cashew nuts are required to produce one kilogram of finished kernels.

Under the proposed budget, imports of raw cashew nuts in shell would be subject to 15% customs duty and 15% VAT, raising the total tax incidence from 13.58% to 40.38%.

At the same time, imported shelled cashews, particularly from India, would continue to receive preferential treatment under Safta reducing the impact of higher customs duties.

According to industry calculations submitted to the National Board of Revenue (NBR), the proposed structure would raise the cost of producing one kilogram of locally processed cashew kernels to about Tk1,725.

In comparison, imported finished cashews from India would cost around Tk1,282 per kilogram, creating a price difference of nearly Tk471.

Processors say such a gap would make local production commercially unsustainable.

"If this structure remains unchanged, factories will be forced to shut down as importers will be able to sell finished products at prices far below our production costs," said Robiul Islam Azad, managing director of Green Harvest Fresh Produce Ltd.

He said Bangladesh imports most of its raw cashew nuts from African countries because local production is insufficient.

"Bangladesh imports raw cashew mainly from African countries because domestic production is insufficient. These countries are outside Safta so we have to pay the full customs duty. Importers of finished cashews from India, however, benefit from preferential tariffs," he said.

NBR officials have defended the proposed measures, saying local farmers need protection from cheaper imports and should receive better prices for domestically grown cashews.

However, processors argue that domestic production remains too low to support such a policy.

Industry estimates show Bangladesh produces about 2,000 tonnes of in-shell cashew nuts annually, while demand exceeds 15,000 tonnes.

The country consumes around 3,000 tonnes of shelled cashews each year, of which local processors produce about 800 tonnes and imports account for the remaining 2,200 tonnes.

"Even for existing production, processors need over 4,000 tonnes of raw cashew nuts annually. Local production is only around half that amount. Imports are therefore a necessity, not a choice," BSRM Group Deputy Managing Director Tapan Sengupta said.

Industry seeks supplementary duty

Bangladesh's cashew processing industry emerged about a decade ago, supported by growing cultivation in the Chittagong Hill Tracts and other regions.

However, processors say they have long struggled to compete with imported products.

Entrepreneur Shakil Ahmed Tanvir, who established the country's first commercial cashew processing plant, said the facility ceased operations in 2022 after years of losses.

"Local processors have long faced unfair competition from imported kernels sold at prices below domestic production costs," he said.

Despite those challenges, several large companies have recently invested in the sector.

BSRM launched a processing plant in Chattogram in 2023 and announced plans to invest Tk157 crore in a larger facility at the Mirsarai Economic Zone.

Kazi Farms has also announced plans to invest Tk181 crore in a similar project.

Industry representatives warn that these investments could be delayed or reconsidered if the proposed tariff structure is finalised without changes.

They argue that increasing customs duties alone does not provide effective protection because imports from India continue to receive concessions under Safta, while raw cashew imports from countries such as Tanzania, Benin, the Ivory Coast and Ghana remain subject to the full duty burden.

To address the issue, processors have proposed imposing a 20% supplementary duty on imported shelled cashews instead of increasing customs duty.

They say a supplementary duty would apply equally to all imports and would not be offset by Safta preferences.

"Raising customs duty alone will not solve the problem because Safta reduces its impact. A supplementary duty would ensure fair competition and prevent cheaper imported kernels from dominating the market," said Mohammad Azad Iqbal Pathan, president of the proposed Bangladesh Association for Cashew Processors.

Industry leaders argue that conventional tariff comparisons fail to account for the economics of cashew processing. According to Robiul Islam Azad, the global average kernel outturn ratio is only 22%, meaning processors recover just 20-24 kilograms of edible kernels from every 100 kilograms of raw cashew nuts. "Because more than four kilograms of raw cashew nuts are required to produce one kilogram of kernels, the tariff on imported finished cashews should be at least 4.5 times higher than the duty on raw materials. Otherwise, local processors cannot compete with imported kernels," he said.

The World Bank’s board is set to approve $1.5 billion in budget support under three loan programmes for Bangladesh this month, a development that will bring much relief to the strained government finances amid the Middle East war.

Of this, about $800 million will be repurposed from existing project loans under the Rapid Response Option (RRO) window, $300 million for fertiliser imports and food assistance, and $400 million for banking sector reforms.

The breakthrough came after multiple rounds of talks in both Washington DC and Dhaka, The Daily Star has learnt from officials involved with the negotiations.

Bangladesh will need an additional $2.61 billion to pay the elevated energy and fertiliser import bills for the last quarter of fiscal 2025-26 because of the Iran war that began on February 28, according to a finance ministry impact analysis.

Subsequently, in April, the finance ministry sought urgent budget support from the WB and other donor agencies due to rising expenses for LNG, fuel and fertiliser imports following the Iran war, and the Washington-based multilateral lender is providing support as part of that request.

Any member state of the WB can restructure or repurpose up to 10 percent of its ongoing portfolio in the event of an unexpected natural or man-made emergency under the RRO window. Bangladesh applied to the WB on April 5 to receive assistance through the RRO.

Assistance under the RRO can be accessed in two ways. One is through the creation of a Contingent Emergency Response Project (CERP), which allows financing of emergency expenses such as food and other essential imports.

Bangladesh is set to repurpose $785 million from 12 projects through this CERP mechanism, which will be taken as budget support. Another $300 million will be taken as budget support to ensure food security.

And $400 million will be taken under the Financial Sector Support Programme for banking sector reforms. As part of the conditions, the government has agreed to scrap the much-criticised Bank Resolution Act, 2026.

The WB has also advised stricter enforcement of related-party lending rules, full supervisory powers for the BB and corporate governance aligned with international norms.

Relevant draft amendments prepared during the interim government were shelved due to opposition from bank owners, The Daily Star has learnt from finance ministry officials involved with the proceedings.

The Financial Institutions Division has now sent them back to the BB for review and consultation.

The other reforms include amending the Deposit Protection Act, enacting laws on distressed asset management and insolvency, and licensing small companies to recover bad loans under the BB regulation.

Two new laws, the Distressed Asset Management Act (DAMA) and the Insolvency and Bankruptcy Act, will be enacted.

Under DAMA, small companies will be licensed to recover bad loans with legal authority similar to banks, regulated by the BB.

The law will establish a framework for recovery, management, securitisation and trading of defaulted loans.

The World Bank Group’s International Finance Corporation will provide technical support.

The Insolvency and Bankruptcy Act will align with international best practices to strengthen insolvent banks and financial institutions.

State-owned banks will also undergo asset quality reviews (AQR).

The interim government conducted AQR in nine private banks, after which five were merged into Sommilito Islami Bank.

The WB’s programme documents noted structural weaknesses, including poor corporate governance, regulatory capture and politically influenced related-party lending.

Loopholes in definitions allowed complex inter-family relationships to obscure the scale of related-party lending, leading to fraudulent and willful defaults, and embezzlement by banks’ shareholders and management.

“A few big business groups siphoned off billions of dollars from the banking sector. In addition, the lack of proper enforcement and regulatory forbearance has exacerbated the problems, encouraging risky behavior, impacting market discipline and delaying necessary reforms,” the WB said.

State-owned banks are the most vulnerable, holding 27 percent of total assets, over $50 billion or 12 percent of GDP. Three state-owned commercial banks are systemically important.

In this context, the Financial Sector Support Project II is seen as critical for stabilising the sector.

It aims to strengthen deposit protection, improve supervisory capacity, and support resolution and restructuring, including reforms of state-owned banks.

“These interventions will address longstanding issues, improve authorities’ preparedness for and management of the current banking sector turmoil, paving the way for resolution and restructuring of weaker banks, including possible recapitalisation of the reformed SOBs.”

The programme is expected to restore stability, strengthen intermediation, and support long-term growth, the WB said.

Chinese Ambassador to Bangladesh Yao Wen has said with the tide at full swell and the wind in their sails, Prime Minister Tarique Rahman's official visit to China (23-26 June) holds "historic significance" and it will surely draw a "more magnificent blueprint" for the development of Bangladesh-China relations.

"Under the strategic guidance of the leaders of both countries, China-Bangladesh relations will forge ahead with more solid political mutual trust, more in-depth practical cooperation, and more robust international collaboration," he said ahead of the visit.

At the invitation of Li Qiang, Premier of the State Council of the People's Republic of China, Prime Minister Tarique Rahman is about to embark on an official visit to China and attend The World Economic Forum's 17th Annual Meeting of the New Champions (2026 Summer Davos Forum).
"On the journey of addressing global challenges, China and Bangladesh will always support each other and move forward hand in hand, making new and greater contributions to the stability and development of both countries, to the prosperity and progress of Asia, and to building a community with a shared future for humanity," said the Chinese ambassador.

During Prime Minister Tarique Rahman's visit to China, the leaders of the two countries will have in-depth exchanges of views on international and regional issues of mutual interest, further coordinate positions and build consensus.

China firmly believes that a "stable, prosperous and confident Bangladesh" will play a more active and constructive role in Global South affairs.

"Let us look forward to the full success of the visit and to the long-standing friendship between China and Bangladesh shining with even greater brilliance in the new era," said Ambassador Yao.

Looking ahead, he said, as China-Bangladesh relations stand at a new starting point that builds on past achievements and opens up new prospects, they are full of confidence and expectations.

On the political front, he said high-level exchanges and party-to-party exchanges between the two countries will become more frequent and in-depth, and political mutual trust will continue to reach new heights.

On the economic front, the ambassador said practical cooperation in areas such as the green economy, investment and business development will continue to expand, bringing more tangible benefits to the two peoples.

On the front of people-to-people exchanges, he said cooperation in education, culture, tourism, youth and other fields will become more vibrant and diverse, allowing the flower of China-Bangladesh friendship to bloom ever more brilliantly in the hearts of the two peoples.

At this important moment when Bangladesh and China are ushering in the next golden 50 years of diplomatic relations, he said in an article that prime minister's first visit to China holds historic significance in building on past achievements and charting the way forward.

This visit will surely inject strong impetus into the development of Bangladesh-China relations in the coming period and promote the upgrading of the Comprehensive Strategic Cooperative Partnership in both quality and substance, he said.

More Solid Political Mutual Trust

China maintains that all countries, regardless of size, strength or wealth, are equal members of the international community and have equal rights to participate in international affairs.

China firmly follows the principle of amity, sincerity, mutual benefit and inclusiveness on neighborhood diplomacy, and remains committed to non-interference in other countries' internal affairs and to providing support without any political strings attached.

"This vision has been fully reflected in China-Bangladesh relations," said the ambassador.

On 4 October 1975, Bangladesh and China officially established diplomatic relations, ushering in a new era of friendly exchanges.

In January 1977, Ziaur Rahman paid his first visit to China in his capacity as Chief Martial Law Administrator and Chief of Army Staff of Bangladesh.

China clearly expressed its support for Bangladesh in safeguarding national independence, laying a solid foundation for the development of bilateral relations.

Begum Khaleda Zia visited China nine times, including five visits as prime minister.

"Frequent high-level exchanges between the two sides have provided strong political guidance for the steady development of bilateral relations," said Ambassador Yao.

Over the past half century, regardless of changes in the international landscape, China and Bangladesh have always respected each other, treated each other as equals, and shown mutual understanding and support on issues concerning each other's core interests and major concerns, he said.

The two countries have become a vivid example of friendly cooperation and mutual benefit between developing countries.

"Prime Minister Tarique Rahman's visit to China at the beginning of his tenure fully demonstrates the high importance Bangladesh attaches to developing relations with China, and reflects the profound foundation of political mutual trust between the two countries," said the envoy.

At present, both Bangladesh and China are at critical stages of their respective national development, and both face difficulties and challenges on the way forward.

The year 2026 marks the beginning of China's 15th Five-Year Plan period.

China is advancing Chinese modernization on all fronts and forging ahead toward the strategic goal of building itself into a great modern socialist country in all respects.

Since its establishment, the new Bangladeshi government has taken a series of measures to maintain unity and stability, improve the economy and people's livelihoods, promote investment and employment, and move toward the goal of building a trillion-dollar economy by 2034.

"These efforts demonstrate its resolve to rise to challenges and press ahead with determination," said Ambassador Yao.

It is precisely because of such shared circumstances and shared aspirations that China and Bangladesh need more than ever to learn from each other and move forward together, he said.

During this visit, the leaders of the two countries will have in-depth exchanges on governance experience and share insights on major issues such as development, economic transformation and reform, further strengthen party-to-party exchanges, and promote more frequent high-level interactions and deeper strategic communication.

"It can be expected that, as exchanges on governance experience continue to deepen, political mutual trust between China and Bangladesh will become even stronger, and bilateral relations will continue to make steady and sustained progress," the ambassador said.

More In-depth Practical Cooperation

Economic and trade cooperation has always been the ballast and propeller of China-Bangladesh relations.

From 2010 to 2025, China remained Bangladesh's largest trading partner for 16 consecutive years.

China has also granted zero-tariff treatment to 100 percent of taxable items for Bangladeshi products exported to China and extended this treatment to 2028.

In the field of investment, China has become Bangladesh's second-largest source of investment.

Nearly 700 Chinese enterprises are registered with Bangladesh's investment authorities, covering a wide range of sectors including energy, transportation, textiles and garments, and information and communications, creating hundreds of thousands of jobs for local communities.

"China has become an indispensable and important development partner in Bangladesh's pursuit of development, economic transformation and modernization," said Ambassador Yao.

Prime Minister Tarique Rahman's visit will inject stronger momentum into Bangladesh-China economic and trade cooperation, he said.

The two sides will have in-depth discussions on expanding bilateral trade and optimizing the trade structure, and promote the entry of more high-quality Bangladeshi products into the Chinese market.

They will further deepen investment cooperation, accelerate project implementation, and attract more Chinese enterprises to invest and do business in Bangladesh.

They will also expand practical cooperation in emerging areas such as scientific and technological innovation, information and communications, green development and artificial intelligence.

"It is reasonable to believe that China-Bangladesh economic and trade cooperation will move toward higher quality and greater depth," said the ambassador.

China-Bangladesh friendship has long taken root in the hearts of the two peoples.

China has always acted with a sense of responsibility as a major country and carried out a series of livelihood projects in Bangladesh that benefit thousands of households.

China-contracted power projects in Bangladesh, including coal-fired, solar and wind power projects, have reached a total installed capacity of over one gigawatt, providing a continuous source of power for Bangladesh's livelihood development and people's daily lives.

China has donated advanced medical equipment to Bangladesh, including physiotherapy and rehabilitation equipment, ventilators and mobile surgical vehicles, contributing China's strength to protecting the health of the Bangladeshi people.

In the face of floods, China promptly extended a helping hand and provided Bangladesh with emergency relief supplies such as rubber boats, life jackets and generators.

"These concrete actions have brought the warmth of China-Bangladesh friendship to countless places in need. It can be expected that this visit will take livelihood cooperation between the two countries to a new level and bring the hearts of the two peoples even closer," said the Chinese envoy.

At the same time, personnel exchanges between the two countries are becoming increasingly frequent, and cultural exchanges and mutual learning are deepening.

Standing at a new starting point, this visit will open broader space for people-to-people exchanges between the two countries.

The two sides will promote cooperation in education, health and skills training, and help Bangladesh cultivate more professional talent suited to the needs of modernization.

They will deepen exchanges in media, film and television, and other areas, so that the two peoples can enhance mutual understanding and deepen friendship through more diverse interactions.

"It can be expected that the hearts of the two peoples will draw ever closer, and the future of China-Bangladesh friendship will be even brighter," he said.

More Robust International Coordination

As the world's largest developing country, the envoy said China has always been a natural member of the Global South and has always shared the same breath and destiny with fellow developing countries.

President Xi Jinping has on many occasions emphasized the importance of strengthening solidarity and cooperation among Global South countries and safeguarding their common interests.

He has called for pooling the strength of Global South countries in the spirit of equality, openness, transparency and inclusiveness, and promoting the reform of the global governance system in a more just and equitable direction.

At present, the world is undergoing accelerated changes unseen in a century.

Unilateralism, hegemonism and bullying practices are growing more rampant, and the cause of global peace and development faces severe challenges.

The more difficult the situation becomes, the more countries that uphold justice should stand together to jointly safeguard the legitimate rights and interests of developing countries and maintain world peace and stability.

Bangladesh is the second-largest economy in South Asia and has an important voice on global issues such as climate change, sustainable development and poverty reduction.

Recently, Bangladesh has won the presidency of the 81st session of the United Nations General Assembly.

"China has always deemed Bangladesh as an important partner in the Global South, and stands ready to work closely with Bangladesh in multilateral institutions such as the United Nations and the World Trade Organization to promote reform of the global governance system and jointly safeguard the collective interests of developing countries," said Ambassador Yao.

The government plans to borrow $2.8 billion from the International Islamic Trade Finance Corporation (ITFC) to finance imports of fuel oil, liquefied natural gas (LNG) and fertiliser in fiscal year 2026-27.

To this end, Bangladesh Petroleum Corporation (BPC) stressed that ITFC reduces its financing markup and the deal allows letters of credit (LCs) to be opened through any Bangladeshi bank. The corporation also proposed provisions allowing Bangladesh to import oil and gas from any energy-rich country, including but not limited to member states of the Islamic Development Bank (IsDB), in order to strengthen energy security and meet emergency requirements.

According to officials at the Economic Relations Division (ERD), negotiations on the financing proposal will take place during the Annual Financing Plan Meeting (FY2026-27) scheduled for 21-24 June in Jeddah, Saudi Arabia. The final financing amount is also expected to be determined during the meeting.

The Bangladesh delegation will be led by ERD Secretary Shahriar Kader Siddiky, Energy and Mineral Resources Division Secretary Mohammad Saiful Islam, and Agriculture Secretary Dr Rafiqul I Mohamed.

Proposed financing breakdown

According to ERD sources, a preparatory meeting held on 4 June decided on borrowing of $2.01 billion for fuel oil imports by BPC, $600 million for LNG imports by Petrobangla, and $200 million for fertiliser imports by the Bangladesh Agricultural Development Corporation (BADC).

BPC informed the meeting that its financing requirement for fuel imports in the current fiscal year was $1.65 billion, of which $700 million has already been disbursed. Due to rising global oil prices, the corporation requested a higher financing ceiling for the next fiscal year.

The meeting also decided to conduct a comparative analysis of fuel procured through ITFC financing and fuel purchased directly from the spot market to strengthen Bangladesh's negotiating position.

Petrobangla officials said the company had largely avoided excessive borrowing during FY2025-26 thanks to a relatively stable economy, continued remittance inflows and adjustments to domestic gas prices.

However, the conflict involving Iran has disrupted LNG shipments through the Strait of Hormuz, one of the world's most important energy transit routes.

As a result, Petrobangla plans to utilise the full $600 million financing facility available under existing agreements.

According to its FY2026-27 plan, major long-term suppliers, including QatarEnergy, OQ Trading Limited and Excelerate Gas Marketing Limited Partnership, have declared force majeure until June 2026, increasing Bangladesh's dependence on alternative sources and spot-market purchases.

Petrobangla expects to use financing for at least two LNG cargo purchases in June 2026 and plans extensive utilisation of the remaining balances under its existing financing agreements.

BADC seeks fertiliser financing flexibility

ERD sources said ITFC had planned a $500 million financing package for BADC in FY2025-26, comprising $200 million in confirmed financing and $300 million in contingency support.

A $100 million agreement for fertiliser imports was signed in September 2025. However, due to the ongoing Middle East crisis, ITFC has temporarily suspended the financing and the funds have yet to be disbursed.

BADC said Bangladesh had already agreed to receive up to $500 million in financing support from ITFC for food security purposes. However, the initial $100 million facility was tied exclusively to fertiliser imports from Saudi Arabia and remains unavailable because of regional instability.

ITFC has also requested additional information and documentation to process a further $200 million financing facility.

BADC has proposed that the remaining $200 million be released quickly and made available for fertiliser imports from any country in the world. It also recommended that future financing agreements avoid country-specific restrictions and allow imports from any source, particularly member countries of the Islamic Development Bank.

Participants at the preparatory meeting agreed that these proposals should be presented during the upcoming negotiations with ITFC.

ITFC's role in Bangladesh

ITFC operates as an autonomous member of the Islamic Development Bank Group, headquartered in Jeddah, Saudi Arabia.

The IsDB has been supporting Bangladesh since 1977. It began financing fuel oil imports for BPC in 1997, and since 2008 the support has continued through ITFC.

Between 2008 and FY2025-26, ITFC provided approximately $21.77 billion to support Bangladesh's energy security.

BPC imports Murban crude oil from ADNOC in Abu Dhabi and Arabian Light crude from Saudi Aramco. Janata Bank currently opens import LCs for Murban crude, while ITFC provides financing to settle payments. ITFC has also been directly financing Arabian Light crude imports after Agrani Bank stopped opening LCs due to the dollar shortage.

For LNG imports, ITFC signed a $100 million facility in 2024 and a $300 million facility in 2025, both extended until 2027 at a financing cost of SOFR plus 1.75%. Although a total LNG financing ceiling of $600 million has been approved for Petrobangla, it has not yet been fully utilised.

ITFC also provided $100 million to BADC in FY2025-26 for fertiliser imports at a rate of six-month USD SOFR plus 1.75%, along with a 0.20% administrative fee.

Push for higher financing ceiling

ERD officials said an ITFC delegation visiting Bangladesh in May 2026 expressed interest in continuing support for the country's growing energy needs and expanding financing into agriculture.

The ERD emphasised that food and agricultural security are now as important as energy security and formally requested that ITFC increase its overall financing ceiling to $3.5 billion for FY2026-27.

The proposal reflects rising global commodity prices, growing import demand and the need to safeguard Bangladesh's supply chains.

ITFC acknowledged the request and said any increase in financing would depend on Bangladesh's formal proposals and financing requirements.

An inter-ministerial preparatory meeting will finalise Bangladesh's position before the Jeddah negotiations.

Leaders of the Chittagong Chamber of Commerce and Industry (CCCI) have called for greater inclusion of Bangladeshi products on global e-commerce platforms, including Alibaba.com, to help diversify the country's export basket beyond the ready-made garments (RMG) sector.

The call came during a courtesy meeting between the chamber leaders and a delegation from Alibaba.com at the World Trade Centre in Chattogram today (20 June), according to a press release.

CCCI President Mohammad Amirul Haque urged Alibaba to onboard a broader range of Bangladeshi products to its global marketplace.

He said Bangladesh is entering a new phase of economic transformation, supported by policy measures proposed in the national budget for FY2026-27, including bonded warehouse facilities and free trade zones aimed at enhancing export competitiveness.

Referring to the recently approved China Specialised Economic Zone in Anwara, Chattogram, Amirul said such initiatives could emerge as important hubs for export-oriented manufacturing and services.

"Given Alibaba's global reach, there is a strong opportunity to connect Bangladeshi producers directly with international buyers," he said, adding that stronger business-to-business ties between Bangladesh and China are crucial for expanding bilateral trade.

He also assured Alibaba of the chamber's full cooperation in expanding e-commerce, training and SME development activities in Bangladesh.

Alibaba's General Manager for Pakistan and Bangladesh, Gaoya Sammer, said the company currently serves more than 50 million active buyers globally and connects over 200 million suppliers offering more than two billion products.

He said Alibaba is working to strengthen its presence in Bangladesh, particularly by promoting export diversification beyond the garment sector.

"There is significant potential in agro-products and seafood from Chattogram, which already enjoy strong demand in international markets," he said.

Sammer added that Alibaba is also focusing on integrating SMEs and entrepreneurs into its platform through training and capacity-building programmes.

He noted that a dedicated Alibaba centre has already been established in Chattogram to provide exporters with training and information on trade diversification.

Former CCCI president Amir Humayun Mahmud Chowdhury said Bangladesh's e-commerce sector remains at a relatively early stage and requires structured training and institutional support to grow.

He said platforms such as Alibaba could play an important role in expanding export opportunities and equipping young entrepreneurs with the skills needed to participate in digital trade.

Other chamber leaders and representatives from Alibaba also attended the meeting.

Amid mounting fiscal pressure and growing development needs the government has embarked on a medium-term reform agenda aimed at making every taka of public spending count while strengthening revenue collection and safeguarding debt sustainability.
FE

The strategy outlined in the FY2026-27 national budget seeks to improve the quality and efficiency of public expenditure, raise the country’s revenue base, and reduce reliance on debt-driven growth as Bangladesh navigates a challenging economic environment marked by inflationary pressures and global uncertainties.

At the heart of the reform agenda is a strategic expenditure framework designed to ensure that public spending is aligned with national development priorities and delivers maximum economic and social returns.

Priority sectors include infrastructure, education, healthcare, energy, agriculture and employment-generating activities, according to budget document.

It also states that public investment in education and healthcare will be gradually increased to 5 per cent over time.

Future development projects will undergo economic appraisal, cost-benefit analysis and implementation-readiness assessments to ensure value for money and maximise development impact.

The budget document notes that the government intends to improve expenditure efficiency through the rationalisation of non-priority spending and stronger fiscal discipline across public institutions.

Subsidy programmes are expected to become more targeted and efficient so that benefits reach intended recipients while limiting fiscal pressures. Support for agriculture, food security and energy supply will continue, although inefficient subsidy arrangements will be reviewed and reformed, according to the document.

The document also highlighted reforms aimed at making social protection programmes more targeted, inclusive and effective through greater use of technology, digital beneficiary databases and enhanced monitoring systems.

Technology-based systems in public procurement, project implementation and budget management are also expected to be strengthened to improve transparency, accountability and efficiency, it added.

Bangladesh’s revenue-to-GDP ratio currently stands at around 8 per cent, while the tax-to-GDP ratio is about 6.8 per cent.

The government aims to raise these ratios to 11 per cent and 9.6 per cent respectively by FY2030-31 through policy and administrative reforms.

The document said that the government seeks to improve the country’s debt sustainability and restore Bangladesh’s debt risk rating from the current “moderate” category to a “low” risk category through stronger revenue mobilisation, sustainable budget deficits and modernised debt management.

The government intends to reduce dependence on debt-financed growth and promote production, employment and private investment as key drivers of long-term economic development, it added.

For FY2026-27, the government proposed a record public expenditure programme of Tk 9.38 lakh crore, marking an increase of about 19 percent from the original Tk 7.90 lakh crore budget of the previous fiscal year.

The expansion reflects the government’s strategy to stimulate economic recovery, strengthen public services and accelerate infrastructure development amid ongoing fiscal and inflationary pressures.

Total public spending is estimated at around 13.7 percent of GDP, up from 12.7 percent in FY2025-26, indicating a more expansionary fiscal stance.

Of the total outlay, the Annual Development Programme (ADP) has been set at Tk 3 lakh crore, a 30 percent increase over the previous year’s allocation, with Tk 1.90 lakh crore expected from domestic resources and Tk 1.10 lakh crore from foreign loans and grants.

The government prioritised investment in transport and communication networks, power and energy, education, healthcare, agriculture, employment generation and social protection programmes to enhance productivity and support long-term growth.

Revenue collection has been targeted at Tk 6.95 lakh crore, leaving a budget deficit of roughly Tk 2.43 lakh crore, which will be financed through domestic and external borrowing.

The budget also placed emphasis on improving expenditure efficiency through a strategic expenditure framework, under which major spending decisions will be assessed based on their economic and social returns.

According to budget documents, non-development expenditure stands at around Tk 6.38 lakh crore, reflecting significant commitments to salaries, pensions, subsidies, interest payments and social safety net programmes.

The increased spending is expected to support the government’s growth target of 6.5 percent and inflation target of 7.5 percent while advancing reforms aimed at modernising infrastructure, strengthening human capital and fostering inclusive economic development across the country.

Bangladesh will strongly place its desire to join the Regional Comprehensive Economic Partnership (RCEP), the world's largest trade bloc, as Prime Minister Tarique Rahman begins his twin visit to Malaysia and China, starting with engagements in Southeast Asian country Malaysia focused on broader cooperation in trade, investment, energy, and the labour market.

"Bangladesh's bid to become a 'Sectoral Dialogue Partner' of Asean [Association of Southeast Asian Nations] and join the 'Regional Comprehensive Economic Partnership' will be strongly highlighted," Foreign Secretary Asad Alam Siam told reporters at the Ministry of Foreign Affairs during a media briefing today (20 June).

Additional Foreign Secretary (Public Diplomacy and Other Priority Matters) AKM Shahidul Karim and other senior ministry officials were present at the media briefing.

Besides, the foreign secretary said, a strong call will be made to Asean member states including Malaysia to play a more active and effective role in the repatriation of forcibly displaced Myanmar citizens - the Rohingyas, he said.

Sectoral dialogue partnership offers Bangladesh a realistic and impactful pathway for engagement, a senior official told UNB, noting that Bangladesh has redoubled its efforts to achieve the status of Sectoral Dialogue Partner (SDP) with Asean.

The prime minister will pay an official visit to Malaysia on 21-22 June at the invitation of Malaysian Prime Minister Anwar Ibrahim.

Malaysian Prime Minister Anwar Ibrahim paid an official brief visit to Bangladesh on 4 October 2024, at the invitation of former interim government Chief Adviser Prof Muhammad Yunus.

During his visit, Prime Minister Tarique Rahman will lead a high-level delegation from Bangladesh that includes Foreign Minister Dr Khalilur Rahman, Adviser to the prime minister on Foreign Affairs Humaiun Kobir, Expatriates' Welfare and Overseas Employment Minister Ariful Haque Choudhury, Information and Broadcasting Minister Zahir Uddin Swapon and other senior government officials.

On the first day of the visit, the prime minister will be welcomed in Malaysia with a formal reception.

The next day (22 June), a private meeting will be held between the prime minister of Bangladesh and Malaysia at the prime minister's office in Putrajaya.

Immediately after the tête-à-tête (a private conversation between two persons), a bilateral meeting will be held between the high-level delegations led by the heads of government of both countries where bilateral issues of mutual interest will be discussed.

Discussions will be held on establishing greater cooperation between the two countries in various fields including trade and investment expansion, energy cooperation, the halal economy, the semiconductor industry, agriculture, education, and people-to-people contact.

In particular, the issues of recruiting new Bangladeshi workers in various sectors in Malaysia, recruiting more professionals, ensuring facilities and benefits for workers and developing the skills of Bangladeshi workers will be discussed with importance.

During this visit, one Memorandum of Understanding (MoU) on cultural cooperation is expected to be signed, said the Foreign Secretary.

In addition, a Terms of Reference is likely to be exchanged with Malaysia to initiate negotiations on a Free Trade Agreement (FTA).

Some other documents related to bilateral cooperation are under discussion. The prime ministers of the two countries will be present at the signing ceremony of the bilateral cooperation documents.

There is also a possibility of a meeting between the prime minister and potential investors in Malaysia.

The two prime ministers will hold a joint press conference, and the prime minister of Malaysia will host a luncheon in honour of his Bangladeshi counterpart.

"We believe that this visit will play a very important role in elevating the existing bilateral and economic relations with Malaysia to a new level," said the Foreign Secretary, noting that Dhaka is hopeful the visit will further strengthen bilateral relations based on mutual respect, trust, and cooperation between the two brotherly countries.

The prime minister is scheduled to leave for Kuala Lumpur tomorrow afternoon (21 June) and, from Kuala Lumpur, will leave for China on Monday afternoon (22 June).

The Foreign Secretary indicated that the delegation sizes for the prime minister's visits to Malaysia and China have been kept relatively small, comprising 27 and 28 members respectively. "We tried to keep it at a logical level," he said.

Economists, business leaders and academics have questioned the realism of the proposed budget's revenue targets and growth assumptions, warning that stronger institutions, accountability and implementation capacity will be critical to achieving its objectives.
They also questioned whether increased allocations for agriculture, health, education and gender inclusion would translate into tangible outcomes without stronger institutions, accountability and monitoring mechanisms.

The issues were discussed during the latest episode of the Policy Research Institute Centre's (PPRC) flagship policy dialogue series Ajker Agenda, titled "PPRC Budget Analysis", held virtually on Friday and moderated by PPRC Executive Chairman Hossain Zillur Rahman.

The discussion brought together former National Board of Revenue (NBR) Chairman Muhammad Abdul Mazid, former President of BKMEA Md Fazlul Haque, former Vice-Chancellor of Bangladesh Agricultural University M A Sattar Mandal, ActionAid Bangladesh Country Director Farah Kabir, Dean of the Faculty of Social Sciences at the University of Dhaka Mohammad Mainul Islam, and former Country Representative of the Malala Fund Musharraf Tansen.Bangladesh economic report

Focusing on revenue mobilisation, fiscal accountability and NBR reforms, Muhammad Abdul Mazid questioned whether the government's ambitious revenue targets could be achieved without a stronger economic base and greater transparency within the tax administration.

He argued that revenue collection ultimately depends on economic activity and productive investment.

"Revenue ultimately comes from a functioning economy. If productive sectors and private enterprises receive the necessary support, revenue collection will naturally improve," he said, expressing concern about the pace and effectiveness of the proposed reforms within the revenue administration.

Examining the budget from the perspective of business competitiveness and implementation feasibility, Md Fazlul Haque observed that many of the government's projections appeared to be based on expectations of a rapid economic rebound.

While welcoming several business-friendly administrative measures, he stressed that sustainable recovery would require stability in the banking sector, uninterrupted energy supplies and further improvements in law and order.

"The budget appears to assume that the economy will recover quickly, but recovery requires time. Achieving the expected outcomes will depend on creating an environment where businesses have confidence to invest and expand," he said.Economic zone consulting

Turning to agriculture and rural livelihoods, Prof Dr M ASattar Mandal questioned whether the proposed measures adequately reflected the realities faced by millions of smallholder farmers across the country.

He noted that previous initiatives had often encountered difficulties in identifying genuine beneficiaries and ensuring effective implementation at the grassroots level.

While acknowledging the government's continued focus on agriculture, he argued that the budget lacked a comprehensive strategy for transforming the sector through innovation, mechanisation and technology adoption.

"Agriculture requires a comprehensive long-term strategy. Alongside supporting farmers, we must also focus on modernisation, technological adaptation and the transition towards smart agriculture," he said.

Assessing the budget from the perspectives of gender equality, climate vulnerability and economic inclusion, Farah Kabir questioned whether increased allocations under gender-related programmes would generate meaningful opportunities for women and vulnerable communities.

She emphasised the need for greater investment in skills development, care services and access to emerging economic sectors.

"The real challenge is ensuring that budget allocations create opportunities. Women need access to skills, new sectors and support systems that enable meaningful economic participation," she said.

On healthcare financing and demographic challenges, Prof Dr Mohammad Mainul Islam examined whether the proposed allocations were sufficient to address Bangladesh's evolving health needs.Personal finance tips

He highlighted the importance of family planning within the broader public health agenda and expressed concern that dedicated allocations for this area remained insufficiently visible despite mounting demographic pressures.

"Increasing health spending is important, but ensuring effective utilisation is equally critical. Population health and family planning require sustained attention if Bangladesh is to maintain its development gains," he said.

Despite a significant increase in education spending, Musharraf Tansen questioned whether additional allocations would lead to measurable improvements in learning outcomes.

Referring to persistent deficiencies in literacy and numeracy among schoolchildren, he argued that the central challenge lay not in the volume of expenditure but in the effectiveness of its utilisation.

"The real challenge is not the size of the budget but how it is used. Unless investments improve learning outcomes through better teaching and effective implementation, increased allocations may not deliver the expected results," he said.

Concluding the discussion, Hossain Zillur Rahman stressed that the success of the FY2026-27 budget would depend less on policy declarations and more on implementation performance.Bangladesh economic report

"The real test of any budget lies not in its promises but in its implementation. Strong institutions, accountability and evidence-based policymaking will determine whether these ambitions deliver meaningful benefits for citizens," he said.

He further argued that budget implementation should be accompanied by a structured three-month monitoring framework within the country's governance system to ensure timely execution and corrective action where necessary.

The economist also highlighted the need to address persistent inequalities in peripheral regions, improve doctor-patient relationships in primary healthcare services, and recognise that technology alone cannot overcome deep-rooted weaknesses in the education system.

"All our ambitions are undermined by three institutional diseases-corruption, implementation delays and failures, and institutional waste arising from the proliferation of unnecessary offices and projects," he observed.

The discussion underscored a common concern among participants that while the proposed budget contains ambitious targets and expanded allocations across several priority sectors, its success will ultimately hinge on effective implementation, institutional reform and rigorous monitoring.

Without addressing longstanding governance weaknesses, they warned, the gap between budgetary commitments and real-world outcomes may continue to persist.

A fresh government move gets underway to open negotiations with the International Monetary Fund (IMF) in mid-July to secure some US$4.0 billion under a new lending package to attain macroeconomic stability, officials say.
FE

The fresh loan move comes after the newly elected government has decided to scrap the ongoing credit programme that loses steam in prolonged negotiations on part of the Fund about disbursement of the remaining tranches of a $5.5-billion loan.

To this end, a delegation of the IMF will visit Dhaka next month to discuss the new financial arrangement to support Bangladesh's economic-reform programme, they add.

Ivo Krznar, the IMF Mission Chief for Bangladesh, will lead the team which will stay in Dhaka on July12-17 discussing the credit programme with the Bangladeshi authorities on their reform agenda and policy priorities.

The new credit programme will replace the ongoing $5.5-billion loan arrangement that now has become stalled after the Tarique Rahman-led government expressed unwillingness to continue with the deal made by the now-defunct Awami League government back in 2022.

Finance ministry officials say they are now taking preparation by gathering necessary facts and figures to begin the discussion. Also, they are listing the reform measures that will be carried out during the three-year tenure of the bankrolling recipe.

A senior finance official says the present government is scrapping the ongoing credit programme finding many of the previously listed reform measures tough to implement at this stage.

"However," he says, "in the new programme the IMF may not agree to ditch those important reform measures but may accept their implementation at a later stage."

Citing an example, another finance official says reform measures for boosting revenue mobilisation, bifurcation of the revenue board, and banking-sector reforms and greater exchange-rate flexibility will definitely be included in the new credit programme with the IMF.

Earlier this month, the IMF in a press release said the IMF staffs were engaging with the Bangladeshi authorities on their reform agenda and policy priorities as part of the Fund's consideration of possible next steps.

"Any new arrangement would need to be based on Bangladesh's balance-of-payments needs and strong policy commitments anchored by a credible reform agenda, and would be subject to the IMF's policies and executive board approval," said Ivo Krznar in the statement.

It recognised that the macroeconomic and political context changed substantially since the Fund-supported programme was approved in January 2023, and the authorities now faced a more complex set of challenges. Banking-sector weaknesses and low revenue mobilisation underscore the need for a renewed and sustained reform effort.

The IMF granted $4.7 billion worth of loan to Bangladesh in January 2023 amid macroeconomic instability created due to the Covid-19-related volatility and war in Ukraine.

The macroeconomy of the country began to be destabilised as export earnings fell, remittance inflow tumbled, and foreign-exchange reserves squeezed. Thereafter, the government turned to the IMF for credit support where the lender came up with reform proposals to help revive the economy of Bangladesh.

The loan was scheduled to be given in seven installments by May 2026. In June last year, the loan amount was increased by another dollop of $800 million. Until now, Bangladesh has received $3.595 billion under the lending package.