Gold prices in Bangladesh have surged once again, with the Bangladesh Jewellers Association (Bajus) setting a new all-time high for the precious metal.

According to a notification issued tonight (25 January), Bajus increased the price of 22-carat gold by Tk1,574 per bhori, fixing it at Tk2,57,191 — the highest ever in the country's history.

The new rates will come into effect from tomorrow.

Bajus said the decision was taken following a rise in the price of pure gold (tejabi gold) in the local market, considering the overall market situation.

Under the revised prices, 21-carat gold will be sold at Tk2,45,527 per bhori, 18-carat gold at Tk2,10,419 per bhori, while gold under the traditional method will cost Tk1,72,919 per bhori.

In addition to the selling price, buyers will have to pay a mandatory 5% VAT set by the government and a minimum 6% making charge fixed by Bajus. However, the making charge may vary depending on the design and quality of jewellery.

Bajus last adjusted gold prices on 23 January, when the price of 22-carat gold was raised by Tk6,299 to Tk2,55,617 per bhori.

With the latest revision, gold prices have been adjusted 13 times in the current month alone — increased on 10 occasions and reduced three times.

Alongside gold, silver prices have also been increased. Bajus raised the price of 22-carat silver by Tk350 per bhori, fixing it at Tk7,232, marking the highest silver price in the country's history.

According to the new rates, 21-carat silver will cost Tk6,940 per bhori, 18-carat silver Tk5,949 per bhori, and silver under the traditional method Tk4,432 per bhori.

So far this year, silver prices have been adjusted eight times, with increases on six occasions and decreases twice.

The European Union and Vietnam will elevate ties during a visit to Hanoi by the European Council President Antonio Costa on Thursday, an EU official said, as both sides seek to expand international partnerships amid disruptions from US tariffs.

The visit comes on the heels of To Lam's re-appointment as Vietnam's top official, potentially making Costa the first leader of a major power to meet Lam since the ruling Communist Party on Friday appointed him for a new term as general secretary.

The elevation of ties to Vietnam's highest level has been planned for months and was delayed largely because of schedule complications, the official said, speaking on condition of anonymity.

It would place the EU on the same tier as China, the US and Russia among others, further expanding Vietnam's advanced partnerships, in line with the country's strategy of balancing big powers.

The European Council declined to comment. Vietnam's government did not respond to a request for comment.

These upgrades are largely symbolic, as they merely entail more frequent high-level meetings and usually no binding agreements.

Vietnam's relations with the United States worsened last year after the Trump administration imposed tariffs, despite the upgrade of bilateral ties inked by former president Joe Biden during a visit to Hanoi in late 2023.

More cooperation on tech, minerals

The upgrade with the EU is expected to generate more cooperation in multiple fields, including research, technology, energy and critical minerals, according to a draft joint statement, the official said. Vietnam has significant but often little exploited deposits of rare earths, gallium and tungsten.

The Southeast Asian trade-reliant nation is a major link in global supply chains, especially for electronics, clothing and footwear. It has a string of free trade agreements with multiple partners, including with the European Union.

The EU has repeatedly criticised Vietnam's implementation of the free trade agreement, which has boosted Vietnam's surplus with the 27-nation bloc since it came into force in 2020. The EU deficit with Hanoi stood at 42.5 billion euros ($50.26 billion) in 2024.

EU officials accuse Hanoi of hampering EU imports with multiple non-tariff barriers, but Brussels has so far taken limited action to address the situation.

Also, facing tariffs from the United States, the EU has prioritised improving ties with economic partners and expanding trade agreements, including recently with South American nations of the Mercosur bloc.

Costa will visit India before Vietnam, where together with European Commission President Ursula von der Leyen, he intends to hold trade talks with Indian Prime Minister Narendra Modi, according to a schedule published by the EU Council.

The Bangladesh Securities and Exchange Commission (BSEC) has rejected a 6% stock dividend proposal announced by Kay & Que (Bangladesh) for the financial year that ended in June 2025.

On 10 October last year, the engineering sector firm recommended a 4% cash and 6% stock dividend for its shareholders for FY25. The stock dividend component was subject to the approval by the BSEC.

According to its annual disclosure, the company had reported 1,316% growth in its earnings per share (EPS) for FY25, reaching Tk9.49 from Tk0.67 in the previous fiscal year.

The firm highlighted strong profitability growth in FY25, along with continued improvement in the first quarter of the current fiscal year. During the first quarter, its EPS rose 137% to Tk2.75, compared with Tk1.15 in the same period of the prior year, driven by higher sales turnover.

Today, Kay & Que's shares closed at Tk367.10 each, which was 0.43% lower than the previous trading sessions.

The company has recently made an "A2P Aggregator Agreement" with Robi Axiata, under which KAY & QUE will act as an A2P (Application-to-Person) Aggregator for Robi Axiata, providing services related to the delivery of SMS and notifications from various applications and digital platforms to end users. The company expects this partnership to positively influence its future revenue growth.

BSRM Limited reported that its consolidated net profit dropped by 11% year-on-year to Tk78.70 crore in the October to December of FY26.

Meanwhile, in the first half of this fiscal year, its consolidated revenue rose by 18% to Tk4,756 crore and the consolidated net profit inched up to Tk202 crore, compared to the previous year during the same period.

At the end of the first half, its consolidated earnings per share stood at Tk6.79.

The indices of Dhaka Stock Exchange (DSE) experienced correction for the third consecutive session yesterday as the cautious investors book profit as brief gain on the trading floor amid lingering political uncertainty ahead of the February election.

The benchmark DSEX index shed 27 points to close at 5,072. The blue-chip DS30 index fell 15 points to 1,948, while the Shariah-based DSES index declined 8 points to end at 1,018.

Market turnover edged down by 1.68% to Tk527 crore, compared to Tk536 crore in the previous session. Of the 392 issues traded, 107 advanced, 225 declined and 60 remained unchanged.

Market insiders said the stock market is hovering near the bottom as political uncertainty continues to weigh on investor confidence. In this environment, informed investors are selectively buying fundamentally strong stocks but opting for small, short-term gains rather than waiting for sizeable returns. This trend has led to frequent corrections after brief upward movements.

Despite the current volatility, participants are expecting a positive trend either before or after the election.

Over the past year, political uncertainty and several decisions taken by the market regulator were not well received by investors. Many investors exited the market, while a large portion of institutional and high-net-worth investors remained largely inactive. This situation pushed down the prices of even fundamentally strong stocks.

Analysts said political uncertainty remains the single most critical factor influencing market sentiment. Although expectations are that easing uncertainty could lead to a more positive market direction, the lack of full clarity has kept institutional and large investors cautious, limiting trading volumes.

They added that ensuring policy stability and restoring investor confidence could unlock strong recovery potential for the capital market in the coming period.

All major large-cap sectors closed in negative territory yesterday. The Food & Allied sector recorded the highest decline, losing 1.01%, followed by NBFIs with a drop of 0.95%. The Engineering sector fell by 0.67%, while Pharmaceuticals declined 0.62%. The Fuel & Power sector shed 0.49%, Telecommunication slipped 0.39%, and the Banking sector posted the lowest loss among large caps at 0.25%. Meanwhile, block trades accounted for 1.9% of the total market turnover for the day.

The Chittagong Stock Exchange (CSE) also closed lower, with the CSCX index dropping 8 points to 8,821, and the CASPI index decreasing 13 points to close at 14,247 reflecting negative sentiment across both major bourses.

BSRM Steel reported that its revenue jumped by 47% year-on-year to reach at Tk5,976 crore in the July-December of FY26.

According to the company's price sensitive statement filed on the Dhaka Stock Exchange today (25 January), its net profit rose by 10% to Tk193 crore during the first half of FY26, compared to the previous year during the same period.

At the end of first half, its earnings per share stood at Tk5.14.

Meanwhile, during the second quarter (October-December) its revenue grew by 31% to Tk3,339 crore and the net profit rose by 6% to Tk95 crore.

The European Union has suspended Generalised Scheme of Preferences (GSP) tariff benefits for a wide range of Indian exports from January 1, a move expected to significantly raise duties on shipments to the 27-nation bloc and weaken India’s price competitiveness in key sectors, according to a report by The Hindu.

The suspension applies to the 2026-2028 period and covers India, Indonesia and Kenya, the Official Journal of the European Union said, citing a regulation adopted by the European Commission on September 25, 2025.

The decision comes at a sensitive time, as India and the EU are expected to announce the conclusion of negotiations for a free trade agreement (FTA) on January 27.

According to trade think tank Global Trade Research Initiative (GTRI), about 87 percent of India’s exports to the EU will now face higher most-favoured-nation (MFN) tariffs following the withdrawal of GSP concessions. Only around 13 percent of exports, mainly agriculture and leather products, will continue to enjoy preferential access.

Under the GSP, Indian exporters were able to ship goods to the EU at duties below MFN rates. For example, an apparel item attracting a 12 percent tariff paid only 9.6 percent under the scheme. From January 1, exporters must pay the full duty.

The EU has removed GSP benefits across almost all major industrial sectors, including textiles and garments, plastics and rubber, chemicals, iron and steel, machinery, electrical goods and transport equipment, which together form the backbone of India’s exports to Europe. While the EU has periodically reduced preferences in the past, this marks a complete withdrawal for three years.

GTRI Founder Ajay Srivastava said Indian exporters will face higher trade barriers in the near term, compounded by rising compliance costs and the rollout of the EU’s Carbon Border Adjustment Mechanism. He warned that in price-sensitive sectors such as garments, the loss of GSP could divert EU buyers toward duty-free suppliers like Bangladesh and Vietnam.

India’s goods trade with the EU stood at $136.53 billion in 2024-25, with the bloc accounting for about 17 percent of India’s total exports.

After repatriating a record amount of profit as dividends to its owners last year, Marico Bangladesh – a subsidiary of India-based multinational personal care major Marico Limited – is now set to remit Tk448 crore to India for the first nine months of the current financial year 2025-26.

In FY25, Marico repatriated over Tk1,000 crore to its owners in India as dividends. The dividend figure was an all-time high, according to company data.

Its financial statements show that in the first nine months, Marico's dividend payout ratio stood at 99.62%, meaning the company retained less than 1% of its profit and paid out almost its entire earnings as dividends.

During April to December – covering the first nine months of the financial year, as it runs from April to March – Marico Bangladesh posted a profit of Tk497.97 crore with earnings per share (EPS) of Tk158.09.

During the first nine months of the current financial year, it declared a 1,575% interim cash dividend based on its audited quarterly profit, with the latest 475% interim cash dividend of Tk47.5 for each share for the third quarter during the October to December quarter.

As the majority shareholders in the Bangladesh subsidiary, Marico Limited will receive the majority of this payout.

Already, Marico Bangladesh had disbursed the previous two quarters (April to September) interim cash dividend to its shareholders, including both local and Indian owners.

In the previous year, Marico Bangladesh paid the record 3,840% cash dividend or Tk384 against each share, including 1950% cash dividend and 1890% interim dividend in the previous three quarters.

The dividend payout was 204.8%, which is significantly higher compared with the last five financial years.

The lowest dividend payout was 13.7% in FY24, meaning it retained its majority profit earned as there were foreign currency shortage and foreign investors were facing hurdles to repatriate dividends.

Of the total Tk1209.60 crore dividend for FY25, Marico repatriated Tk1088.10 crore – or equivalent to 90% to India to owners of the company as the owners held 90% stake of the company, and the rest 10% availed by the local investors – including institutional and general shareholders.

Strong revenue, profit growth

According to its audited financial statement ending in December, Marico's year-on-year revenue grew by 24% to Tk1,545.16 crore, while its net profit after tax grew by 8.54% to Tk497.97 crore with an EPS of Tk158.09.

At the same time as the previous financial year, its revenue was Tk1,245 crore and net profit Tk458.79 crore.

It said through a disclosure on stock exchanges on Sunday, EPS has increased in the third quarter of FY26 as compared to Q3 of FY25 due to increased revenue and optimisation of operating expenses.

Its net operating cash flow per share stood at Tk109.79 in the Q3 (Oct-Dec) against Tk88.35 in the same time of the previous year due to higher collection from customers.

Its net asset value per share by the end of December declined to Tk92.22, which was Tk239.13 as of March 2025 due to the declaration of final dividend for FY25, and interim dividends for FY26, said Marico Bangladesh.

On Sunday, its share price closed at Tk2,770.40 each on the Dhaka Stock Exchange, a 0.23% higher from the previous trading session.

Two listed companies of BSRM Group, the country's largest steel manufacturer, posted a combined 33% growth in revenue to Tk10,732 crore during the July-December period of the 2025-26 fiscal year, driven mainly by higher sales price amid volatile market conditions.

The growth in revenue, however, was not matched by a similar rise in profitability as elevated business costs continued to weigh on earnings.

According to their half-yearly financial statements, both BSRM Limited and BSRM Steels Limited recorded higher topline performance in the first half of the fiscal year, but net profit growth remained modest due to rising raw material prices, higher financing costs and overall inflationary pressures.

BSRM Limited, which is primarily engaged in the production of mild steel products through its melting, rolling and re-rolling mills, reported an 18% year-on-year increase in consolidated revenue to Tk4,756 crore in the first half of FY26.

During the same period, the company's consolidated net profit edged up to Tk200 crore, while earnings per share stood at Tk6.79.

Despite the improvement over the six months, the company's second-quarter results reflected pressure on profitability. In the October-December quarter, consolidated revenue rose 14% to Tk2,411 crore, but consolidated net profit declined by 11% year-on-year to Tk78.70 crore, with earnings per share falling to Tk2.64.

The company said the weaker quarterly profit was mainly due to higher operating and input costs.

On the stock market, shares of BSRM Limited closed 1.67% lower at Tk81.80, while its market capitalisation fell by Tk53.74 crore to Tk2,442 crore.

BSRM Limited has an annual production capacity of 1.75 lakh tonnes of MS rod and 11.25 lakh tonnes of billet, making it a major supplier to the country's construction and infrastructure sectors.

According to the company, it continued to operate in a challenging environment marked by domestic economic pressures and global uncertainty.

Meanwhile, BSRM Steels Limited posted a stronger revenue growth compared to its sister concern. It reported a 47% jump in revenue to Tk5,976 crore in the first half of FY26, while net profit rose by 10% to Tk193 crore. Earnings per share for the period stood at Tk5.14.

In the second quarter alone, the company recorded a 31% increase in revenue to Tk3,338 crore, supported by higher sales volume and price adjustments. Net profit during the quarter increased by 6% to Tk95.50 crore, with earnings per share reaching Tk2.54.

Despite the improved financial performance, the company's share price also declined, closing 2% lower at Tk68.60. Its market capitalisation dropped by Tk52.66 crore to Tk2,579 crore.

BSRM Steels manufactures MS billets, which are the basic raw material for rods, using scrap and sponge iron, and subsequently produces MS products through re-rolling mills. The company has an annual production capacity of 12.50 lakh tonnes of billets, 5 lakh tonnes of MS products and 1 lakh tonnes of wire rods.

The Bangladesh steel industry, estimated to be worth around Tk75,000 crore, plays a crucial role in national infrastructure development and industrial employment.

As the market leader, BSRM has continued to supply steel to major national projects, including bridges, railways and power infrastructure, according to the company's annual report for FY25.

However, the operating environment remained highly volatile during the period. At home, political uncertainty and macroeconomic challenges such as foreign exchange volatility, tight liquidity conditions due to higher interest rates and persistent inflation put pressure on operating costs and consumer demand.

Internationally, ongoing geopolitical conflicts disrupted global supply chains and added to uncertainty in commodity markets.

BSRM also reported a decline in sales volume of MS rods during the first half of the fiscal year, mainly due to weaker domestic consumption and slower implementation of large infrastructure and private development projects.

These factors limited the group's ability to turn higher revenue into stronger profit growth.

Despite the headwinds, BSRM said it continued to focus on operational discipline, cost optimisation and quality assurance to maintain consistent product standards and plant reliability.

The group also pursued strategic initiatives to improve process efficiency and strengthen supply chain resilience in order to mitigate rising input costs and market volatility.

The General Economics Division (GED) has projected a delicate balance between a recovering growth trajectory and persistent structural hurdles, saying the economy could grow at 5.0 per cent in the current calendar year.

According to the January 2026 Economic Update and Outlook released on Sunday by the GED under the Planning Commission, the economy will expand by 5.0 per cent in 2026.

The report highlights a "fragile but resilient" recovery as the country navigates a complex democratic transition and prepares for its graduation from the Least Developed Country (LDC) category.

It notes a significant rebound in economic activities compared to the previous fiscal year.

Provisional data for the first quarter of FY26 shows real Gross Domestic Product (GDP) growth rising to 4.50 per cent, a sharp increase from the 2.58 per cent recorded in the same period last year.

The GED said the most pressing concern remained the stubbornly high inflation, which was currently outpacing wage growth and squeezing household purchasing power.

While price inflation increased by 0.20 percentage points last month, wage inflation only grew by 0.03 percentage points to 8.07 per cent, indicating that real income was falling behind.

On a positive note, the external sector showed signs of stabilisation.

Gross foreign exchange reserves strengthened to $33.19 billion in December 2025.

Remittance inflows hit a robust $3.22 billion that month, aided by a more favourable exchange rate and regulatory incentives.

Earnings stabilised at roughly $4.0 billion per month, with the readymade garment (RMG) sector continuing to provide the bulk share of foreign currency.

The GED cautioned that despite the 5.0 per cent growth outlook, several risks could derail the recovery.

"The economy will require strong governance, policy consistency, and sustained investment in skills to diversify beyond the garment sector. Uncertainty among economic elites and institutional weaknesses remains a significant risk during this transition," the report said.

Garment manufacturers and investors in export processing zones (EPZs) have warned that a three-day general holiday around the upcoming national election could disrupt production and hurt exports.

The government has already declared February 10 to 12 as general holidays in industrial areas in connection with the national parliamentary election and referendum scheduled for February 12.

In response, the Bangladesh EPZ Investors Association has written to the Bangladesh Export Processing Zones Authority (Bepza), urging it to reconsider the plan. Bepza has said it is reviewing the matter in consultation with relevant stakeholders.

Khorshed Alam, executive director (Enterprise Service) of BEPZA, told The Daily Star that the authority received the EPZ investors’ letter yesterday and has already started discussions.

“We received the letter on Sunday. We will discuss the matter with all concerned parties, including relevant ministries, stakeholder associations, and factories inside and outside EPZs,” he said. “We will try to ensure that holidays in all industrial areas are observed at the same time during the election period.”

He added that BEPZA cannot take a decision on its own and that discussions are ongoing, with a final decision to be made at an executive board meeting.

In the letter, EPZ investors said enterprises in the zones follow production and shipment schedules agreed upon with international buyers months in advance, leaving little room for sudden changes.

Unplanned holidays, the association warned, would disrupt production, delay shipments and could result in penalties, order cancellations and loss of buyer confidence.

Garment factory owners outside EPZs raised similar concerns in a separate letter sent on Saturday to the secretary of the Ministry of Labour and Employment.

They said February already has fewer working days because of Shab-e-Barat, International Mother Language Day and weekly holidays. With the three additional holidays now declared for the election, the number of effective working days would fall to 19, which could seriously disrupt export-oriented garment production.

The letter also said global demand for garments has remained weak in recent months, with both orders and prices declining, forcing some factories to shut down. In this situation, factory owners are struggling to manage February wage payments and upcoming Eid-ul-Fitr bonuses.

Both garment manufacturers and EPZ investors have urged the government to consider declaring only election day as a mandatory general holiday in industrial areas. As an alternative, they suggested adjusting the holidays on February 10 and 11 against weekly or annual leave through an executive order.

The National Board of Revenue (NBR) is moving to fully automate value-added tax (VAT) and income tax refunds to make the process faster, more transparent, and less burdensome for taxpayers, NBR Chairman Md Abdur Rahman Khan said yesterday.

“Automated VAT refunds have already been introduced, and income tax refunds will follow the same path,” Khan said at a press briefing at NBR headquarters in Agargaon, held for International Customs Day.

He acknowledged that minor glitches might occur initially, saying such issues are inevitable when launching a new system. Similar problems were faced and resolved when e-return filing was introduced.

Refund disbursement has already started, which Khan called a “major development.” He added that automation will gradually extend to income tax refunds as well.

The main goal is to reduce direct interaction between taxpayers and officials. “The greater the distance, the greater the transparency,” Khan said.

According to him, the system would significantly reduce complaints, allow real-time tracking and ensure refunds are issued within a much shorter timeframe. If necessary, the law will be amended in the future to further strengthen the system.

Khan also said the government is working to rationalise overall tariff structure ahead of the country’s graduation from least developed country (LDC) status.

“A report on tariff transformation has been submitted to the chief adviser, including recommendations for reducing duties,” he said, adding that Bangladesh cannot maintain high tariffs after LDC graduation.

However, he said duties had been increased in some areas to protect domestic industries, while rejecting claims of frequent duty hikes.

“In the past one and a half years, we have not increased tariffs to raise revenue. Instead, in the public interest, we reduced duties on imports of rice, onions, potatoes, and soybeans,” he added.

Addressing concerns about rising fruit and import-dependent goods prices, Khan said the main reason is the sharp depreciation of the taka against the US dollar, not taxes or customs duties.

“The dollar has risen about 40 percent -- from Tk 80 to Tk 85 two years ago to around Tk 126 to Tk 127 now -- raising import costs significantly,” he said.

He added that no new duties were imposed on fruit imports during this period. “In fact, income tax on fruit imports was cut from 10 percent to 5 percent, and duties on date imports were reduced significantly,” he said.

On the planned restructuring of the NBR into two separate divisions, Khan said the matter will be finalised after a secretaries’ committee meeting.

“Once the division of responsibilities is decided, a gazette will be issued, and organograms and designations will be adjusted accordingly,” he added.

The NBR chairman also hinted at a possible extension of the January 31 deadline for individual income tax returns. “We will consider it if some registered taxpayers miss the deadline,” he said, adding that no final decision has been made.

Bangladesh’s economic outlook for 2026 points to a potential growth of around 5 percent, with expectations of easing inflation, as per a recent government report. However, structural challenges remain, which will require strong governance and policy consistency.

The report by the General Economics Division (GED) of the Bangladesh Planning Commission -- titled Economic Update & Outlook January 2026 -- notes that macroeconomic stability is expected to improve.

Despite that, sustaining growth will require investment in skills and technology to diversify the economy beyond garments. This step is particularly significant as the country approaches graduation from the least developed country (LDC) category and navigates an ongoing democratic transition.

Recent data show signs of recovery. Provisional quarterly national accounts estimates released by the Bangladesh Bureau of Statistics indicate that economic activity strengthened in the first quarter of FY2025-26.

On a point-to-point basis, real growth rose to 4.50 percent, up from 2.58 percent in the same quarter a year earlier. Provisional estimates also suggest overall GDP growth at constant prices reached 3.72 percent in FY2024-25, with final figures to be benchmarked against annual GDP using internationally accepted methods.

The GED report underscores the importance of a stable and reformed political environment, alongside effective integration of technology, to shift the economy from low-cost labour dependence to higher-value activities.

The report cautions that risks persist from institutional weaknesses and elite uncertainty. With progress on the Sustainable Development Goals remaining slow, it recommends evidence-based policymaking and targeted village-level interventions to support inclusive and sustainable development.

India plans to slash tariffs on cars imported from the European Union to 40% from as high as 110%, sources said, in the biggest opening yet of the country's vast market as the two sides close in on a free trade pact that could come as early as 27 January.

Indian Prime Minister Narendra Modi's government has agreed to immediately reduce the tax on a limited number of cars from the 27-nation bloc with an import price of more than 15,000 euros ($17,739), two sources briefed on the talks told Reuters.

This will be further lowered to 10% over time, they added, easing access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz and BMW.

The sources declined to be identified as the talks are confidential and could be subject to last-minute changes. India's commerce ministry and the European Commission declined to comment.

'Mother of all deals'

India and the EU are expected to announce 27 January the conclusion of protracted negotiations for the free trade pact, after which the two sides will finalise the details and ratify what is being called "the mother of all deals.

The pact could expand bilateral trade and lift Indian exports of goods such as textiles and jewellery, which have been hit by 50% US tariffs since late August.

India is the world's third-largest car market by sales after the US and China, but its domestic auto industry has been one of the most protected. New Delhi currently levies tariffs of 70% and 110% on imported cars, a level often criticised by executives, including Tesla chief Elon Musk.

New Delhi has proposed slashing import duties to 40% immediately for about 200,000 combustion-engine cars a year, one of the sources said, its most aggressive move yet to open up the sector.

This quota could be subject to last-minute changes, the source added.

Battery electric vehicles will be excluded from import duty reductions for the first five years to protect investments by domestic players like Mahindra & Mahindra and Tata Motors in the nascent sector, the two sources said.

After five years, EVs will follow similar duty cuts.

Market currently dominated by Suzuki and local makers

Lower import taxes will be a boost for European automakers such as Volkswagen, Renault and Stellantis, as well as luxury players Mercedes-Benz and BMW which locally manufacture cars in India but have struggled to grow beyond a point in part due to high tariffs.

Lower taxes will allow carmakers to sell imported vehicles for a cheaper price and test the market with a broader portfolio before committing to manufacturing more cars locally, said one of the two sources.

European carmakers currently hold a less than 4% share of India's 4.4-million units a year car market, which is dominated by Japan's Suzuki Motor as well as homegrown brands Mahindra and Tata that together hold two-thirds.

With the Indian market expected to grow to 6 million units a year by 2030, some companies are already lining up new investment.

Renault is making a comeback in India with a new strategy as it seeks growth outside Europe, where Chinese carmakers are making strong inroads, and Volkswagen Group is finalising its next leg of investment in India through its Skoda brand.

The government has increased monthly allowances and expanded beneficiary coverage for 15 social safety net programmes (SSNPs) for the upcoming fiscal year 2026-27 (FY27), which begins in July.

The Finance Division announced the decisions in a press statement yesterday following the 32nd meeting of the Advisory Council Committee on SSNPs, chaired by the finance adviser.

However, the move has drawn criticism from policy experts, who questioned the timing as the interim government has less than a month remaining in office. They also noted that implementation will fall to the next elected government, which is likely to follow its own manifesto commitments.

WHO GETS HOW MUCH

Under the Ministry of Social Welfare’s old age allowance programme, the number of beneficiaries has been increased by 1 lakh to 62 lakh. Of them, 59.95 lakh elderly citizens will receive Tk 700 per month, up from Tk 650, while 2.05 lakh people aged over 90 will receive Tk 1,000.

Allowances for “widows and husband-deserted women” have also been raised. Of the 29 lakh beneficiaries, 28.75 lakh will receive Tk 700 per month, while 25,000 women aged over 90 will receive Tk 1,000.

For persons with disabilities, the total number of beneficiaries under the disability allowance and education stipend programme has been increased to 36 lakh from 34.5 lakh. Most will receive Tk 900 per month from FY27, while 18,100 beneficiaries will receive Tk 1,000.

Education stipends for students with disabilities have been increased by Tk 50 at all levels. The revised rates are Tk 950 for primary, Tk 1,000 for secondary and Tk 1,350 for higher education.

Under the programme for “improving living standards of backward communities”, the number of beneficiaries has increased by 7,000 to over 2.28 lakh, while the monthly allowance has been raised from Tk 650 to Tk 700.

The number of student beneficiaries from backward communities has also been increased by 3,198 to 45,338. For FY27, monthly stipends have been set at Tk 700 for primary, Tk 800 for secondary, Tk 1,000 for higher secondary and Tk 1,200 for higher education levels.

In addition, 5,490 beneficiaries will receive skills development training under the programme.

Beneficiaries under the financial assistance programme for patients suffering from serious illnesses, including cancer, kidney disease, liver cirrhosis, stroke, related paralysis, congenital heart disease and thalassemia, have increased by 5,000 to 65,000. The one-time medical assistance has been doubled from Tk 50,000 to Tk 100,000.

The “mother and child benefit” programme under the Ministry of Women and Children Affairs will cover more than 18.95 lakh mothers, an increase of 1.24 lakh, with a monthly allowance of Tk 850.

The “food-friendly programme” of the Ministry of Food will support 60 lakh families starting FY27, up 5 lakh, providing 30 kg of subsidised rice for six months at Tk 15 per kg.

The Advisory Council committee meeting also raised the monthly allowances for Gallantry Awards-winning freedom fighters and families of martyred freedom fighters by Tk 5,000.

At the meeting, it was recommended that the monthly honorarium allowances for the families of martyrs and the injured from the July Mass Uprising, which fall under the Ministry of Liberation War Affairs, and the Vulnerable Group Feeding (VGF) programme under the Ministry of Fisheries and Livestock, be brought within the purview of the committee on SSNPs.

The meeting further recommended that in FY27, an additional 273,514 fishermen be newly included, bringing the total number of fishermen under the VGF programme to 15 lakh.

Officials said these revisions aim to enhance social protection and address the needs of vulnerable populations ahead of the next fiscal year.

However, policy experts say otherwise.

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said the interim government has less than one month. A new government will come, and they will implement their own programmes in line with their manifestos.

“At this stage, there is no justification for taking any such decision,” he said.

The interim government could hike allowances and the number of beneficiaries in this fiscal year to give a better cushion to low-income people struggling amid persistent inflation, he added.

Selim Raihan, executive director at the South Asian Network on Economic Modeling (Sanem), said the interim administration could have increased the social safety nets allocation at the beginning of this fiscal year when it had time, and the pressure of inflation was high.

US President Donald Trump on Saturday warned Canada that if it concludes a trade deal with China, he will impose a 100 percent tariff on all goods coming over the border.

Relations between the United States and its northern neighbor have been rocky since Trump returned to the White House a year ago, with spats over trade and Canadian Prime Minister Mark Carney decrying a “rupture” in the US-led global order.

During a visit to Beijing last week, Carney hailed a “new strategic partnership” with China that resulted in a “preliminary but landmark trade agreement” to reduce tariffs -- but Trump warned of serious consequences should that deal be realized.

If Carney “thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump wrote on his Truth Social platform.

“China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” he said.

“If Canada makes a deal with China, it will immediately be hit with a 100 percent Tariff against all Canadian goods and products coming into the USA.”

Trump insulted Carney by calling him “Governor” -- a swipe referring to the US president’s repeated insistence that Canada should be the 51st US state.

Trump this week posted an image on social media of a map with Canada -- as well as Greenland and Venezuela -- covered by the American flag.

Canada’s minister responsible for trade with the United States, Dominic LeBlanc, pushed back against Trump’s latest threat. “There is no pursuit of a free trade deal with China. What was achieved was resolution on several important tariff issues,” he wrote on X.

The two leaders have sharpened their rhetorical knives in recent days, beginning with Carney’s speech on Tuesday at the World Economic Forum in Davos, where he earned a standing ovation for his frank assessment of a “rupture” in the US-led global order.

His comment was widely viewed as a reference to Trump’s disruptive influence on international affairs, although Carney did not mention the US leader by name.

Trump fired back at Carney a day later in his own speech, and then withdrew an invitation for the Canadian prime minister to join his “Board of Peace” -- his self-styled body for resolving global conflict.

Initially designed to oversee the situation in postwar Gaza, the body appears now to have a far wider scope, sparking concerns that Trump wants to create a rival to the United Nations.

“Canada lives because of the United States. Remember that, Mark, the next time you make your statements,” Trump said.

Carney shot back on Thursday: “Canada doesn’t live because of the United States. Canada thrives because we are Canadian.” He nevertheless acknowledged the “remarkable partnership” between the two nations.

Canada heavily relies on trade with the United States, the destination for more than three quarters of Canadian exports.

Key Canadian sectors like auto, aluminum and steel have been hit hard by Trump’s global sectoral tariffs, but the levies’ impacts have been muted by the president’s broad adherence to an existing North American free trade agreement.

Negotiations on revising that deal are set for early this year, and Trump has repeatedly insisted the United States doesn’t need access to any Canadian products -- which would have sweeping consequences for its northern neighbor.

Matthew Holmes, executive vice president of the Canadian Chamber of Commerce, said in a statement that he hoped the two governments would “come to a better understanding quickly that can alleviate further concerns for businesses.”

The two nations, along with Mexico, are set to host the World Cup later this year.

Global stocks were subdued and precious metals hit new highs Friday as US President Donald Trump followed up conciliatory comments on Greenland with a fresh warning on Iran.

Trump, who on Wednesday backed away from threatened tariffs on Europe over Greenland, told reporters the United States was sending a "massive fleet" toward Iran "just in case."

Gold -- a safe-haven asset -- pushed closer to a record $5,000 an ounce, while fellow safe haven silver also kept rising, blasting through $102 an ounce amid worries over what Trump may say next, or actually do.

The dollar retreated, falling to a four-month low against the euro.

Sentiment had calmed over the past two days after the US president pulled back from his threat to hit several European nations with levies because of their opposition to Washington taking over the Danish autonomous territory of Greeland.

Trump has repeatedly left open the option of new military action against Iran after Washington backed and joined Israel's 12-day war in June aimed at degrading Iran's nuclear and ballistic missile programs.

The prospect of immediate American action seemed to recede in recent days, with both sides insisting on giving diplomacy a chance.

European markets sought direction in vain, Frankfurt closing just in the green as London and Paris fell on the red side of the line at the end of the week.

Wall Street painted a similar picture, with the Dow retreating while the Nasdaq pushed higher.

Intel plunged 17 percent after lackluster expectations on the chip maker's earnings.

Asian markets closed higher.

- Powell under pressure -

Trump's latest salvo against allies revived trade war fears and uncertainty about US investment, putting downward pressure on the dollar this week.

Analysts said there was no guarantee that Europe-US relations had improved durably.

The US president's willingness to threaten tariffs over any issue had rattled confidence on trading floors, boosting safe-haven metals, analysts said.

Investors were also preparing for next week's Federal Reserve meeting following economic data broadly in line with forecasts and after US prosecutors took aim at boss Jerome Powell, which has raised fears over the bank's independence.

The bank is tipped to hold interest rates steady, after cutting them in the previous three meetings.

The meeting also comes as Trump considers candidates to replace Powell when the Fed chair's term comes to an end in May.

The Bank of Japan left its key interest rate unchanged ahead of a snap election next week, which could impact government spending plans.

After sharp volatility in the wake of the announcement, the yen traded slightly higher.

Next week's US earnings calendar is packed with results from Apple, Microsoft, Boeing, Tesla, Meta and other corporate giants.

- Key figures at around 2120 GMT -

New York - Dow: DOWN 0.6 percent at 49,098.71 (close)

New York - S&P 500: FLAT at 6,915.61 (close)

New York - NASDAQ: UP 0.3 percent at 23,501.24 (close)

London - FTSE 100: DOWN 0.1 percent at 10,143.44 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,143.05 (close)

Frankfurt - DAX: UP 0.2 percent at 24,900.71 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 53,846.87 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 26,749.51 (close)

Shanghai - Composite: UP 0.3 percent at 4,136.16 (close)

Euro/dollar: UP at $1.1823 from $1.1755 on Thursday

Pound/dollar: UP at $1.3636 from $1.3501

Dollar/yen: DOWN at 157.00 yen from 158.41 yen

Euro/pound: DOWN at 86.70 pence from 87.07 pence

West Texas Intermediate: UP 2.9 percent at $61.07 per barrel

Brent North Sea Crude: UP 2.8 percent at $65.88 per barrel

The government is set to significantly reduce the holding tax on factories located in the Bangladesh Small and Cottage Industries Corporation (Bscic) industrial estates, aiming to ease business operations after Bscic's call for a full tax waiver.

At present, city corporations, municipalities, and union parishads collect holding tax at varying rates. City corporations charge 23% on the assessed annual value of industrial and commercial properties, while municipalities levy 3-7%, and union parishads 1-7%.

According to sources, the holding tax for factories in Bscic industrial estates may now be capped at a maximum of 5% within city corporation areas and 2% at the municipal and union parishad levels – a significant relief for small industries.

Bscic Chairman Md Saiful Islam told The Business Standard on 6 January that Bscic had formally sought a full exemption for all industrial establishments in Bscic estates. "We sent a letter to the Local Government Division requesting exemption from holding tax for industries in Bscic estates," he said.

Following the proposal, the Local Government Division held meetings on 4 December last year with city corporations, municipalities, and union parishads. While a complete waiver was not approved, officials agreed to substantially cut the tax burden.

However, the exact rates are yet to be finalised by the respective local government authorities.

A senior Bscic official, speaking on condition of anonymity, said many industrial units in Bscic estates have not been paying holding tax for years, leading to trade licence suspensions and operational difficulties. "In many areas, factories cannot renew trade licences due to disputes over holding tax, disrupting business and discouraging investment," the official said.

The official also noted that Section 24 of the Bscic Act 2023 allows for exemption of industrial units in Bscic estates from holding tax. He referenced the 2020 exemption of industrial units under Bangladesh Export Processing Zones Authority (Beza) from local taxes and fees, which prompted investors to demand similar treatment.

According to Bscic data, there are 83 industrial estates across the country – 12 within city corporation areas, 27 in municipal areas and 44 in union parishad areas. These estates contain 13,139 industrial plots, of which 11,513 have been allocated to 6,295 industrial enterprises, including 887 fully export-oriented units.

Excluding land and buildings, total investment in these enterprises stands at Tk58,000 crore. In the 2024–25 fiscal year, factories in Bscic estates produced goods worth Tk65,352 crore, with exports accounting for Tk30,947 crore. During the same period, the enterprises paid Tk4,424 crore in taxes and VAT to the government.

However, a senior official of the Local Government Division said holding tax and trade licence fees remain critical revenue sources for local authorities, who also maintain roads, street lighting, and waste management for industrial areas. "While full exemption is not feasible, Bscic industries contribute substantially to employment, production, and exports. The decision is to reduce holding tax as much as possible," the official said.

The impact of non-payment has already been felt in areas such as the tannery industrial zone under Tetuljhora Union Parishad in Hemayetpur, Savar, where trade licence renewals and new licences were blocked due to unpaid holding tax.

The Local Government Division has now instructed all city corporations, municipalities, and union parishads that payment of holding tax will no longer affect the issuance or renewal of trade licences. Any application for a trade licence must be processed in accordance with the rules.

Bscic Chairman Md Saiful Islam hoped that, with this, industries in Bscic estates should no longer face obstacles in obtaining trade licences.

The simmering conflict between Bangladesh's textile mills and garment exporters has exposed a fault line at the heart of the country's export economy—one that policymakers can ill afford to mishandle.

The immediate trigger was a commerce ministry letter asking the National Board of Revenue (NBR) to scrap the zero-duty facility for yarn imports under the bonded warehouse system. The ministry believes duty-free imports have tilted the playing field against local spinning mills and should be suspended to protect domestic producers.

While the NBR has yet to act on the 12 January request, the response from the two industries has been swift—and sharply divided.

Garment exporters have called the proposal "suicidal", warning that removing access to cheaper imported yarn would cripple competitiveness in global markets. Textile millers, on the other hand, see the move as a "lifeline" and have demanded immediate action. The Bangladesh Textile Mills Association (BTMA) has gone a step further, threatening to shut down mills from 1 February if the interim government fails to intervene.

This is not a clash between rival sectors. The two industries are deeply interdependent—and together form the backbone of Bangladesh's export economy.

The labour-intensive apparel sector earned nearly $39 billion last fiscal year, accounting for about 85% of total merchandise exports. The capital-intensive textile sector, with investments of around $23 billion, supplies yarn and fabric to garment factories. Both employ millions, rely heavily on bank financing and are highly exposed to global market shocks.

Trade and tariff analysts warn that a hostile stand-off risks destabilising the wider economy at a time when business confidence is already fragile and investors are waiting for clarity following the 12 February national elections. Supporting one sector at the expense of the other, they caution, could push the entire value chain into a deeper crisis.

How the standoff emerged

Bangladesh once relied heavily on imported yarn and fabric. Over the past three decades, however, large investments have created strong backward linkages, enabling local producers to supply nearly all knitwear demand and around half of woven garments.

That progress has come under pressure in the past two to three years. As imported yarn—mainly from India—has become cheaper, garment exporters have increasingly shifted to imports. Government data show yarn imports doubled in the two years following FY2022–23, with India dominating the supply.

The fallout for local mills has been severe. As garment orders slowed, spinning mills accumulated inventories three to four times higher than normal, while nearly half of installed capacity went idle. The slowdown spread to weaving, dyeing and printing, affecting operations across nearly 2,000 textile units.

After months of appeals from mill owners, the government moved to curb duty-free yarn imports under bond licences. Once the proposal became public, exporters reacted sharply. The BTMA's shutdown threat soon followed, pushing the two sectors into open confrontation.

BTMA argues that continuing zero-duty imports poses an existential threat to local mills. Garment manufacturers' associations—BGMEA and BKMEA—counter that scrapping the bond facility would raise production costs by 8% to 10%, adding more than $2 billion annually to exporters' expenses.

Without duty-free imports, exporters would face additional duties of around 37% on yarn, forcing them to source locally at an extra cost of $0.40–$0.60 per kilogram.

At present, Indian yarn costs about $2.55 per kg, while Bangladeshi mills say they cannot sell below $2.80—and even then struggle to break even. Exporters argue that buyers will not absorb the difference. Millers say the comparison is unfair.

Why local yarn costs more

Bangladeshi spinning mills argue that Indian exporters benefit from extensive government support, allowing them to sell yarn in Bangladesh at prices lower than in India's domestic market—what local producers describe as dumping.

According to industry estimates, Indian incentives provide benefits of nearly $0.30 per kg through export rebates, technology upgrade funds, production-linked incentives and state-level subsidies on power, land and financing.

By contrast, support for Bangladesh's textile sector has steadily declined. Cash incentives for garments made with local yarn have fallen from as high as 25% to just 1.5%. Gas prices jumped by 179% in a single adjustment three years ago. Bank interest rates have climbed to around 16%, while access to low-cost loans under the Export Development Fund has narrowed. Reduced tax rate facilities have also been withdrawn.

Some mills have compounded their problems by over-investing in high-end machinery, increasing debt burdens. The result is a widening competitiveness gap between textile producers in Bangladesh and India.

Is a middle path possible?

Economists argue that while growing dependence on imported yarn carries long-term risks—particularly supply concentration—cutting off access to cheaper inputs abruptly could damage the $40 billion garment export sector.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the government should explore time-bound solutions rather than blunt import restrictions.

These could include limited cash compensation, special loan facilities within LDC rules, anti-dumping investigations, or a quota system that allows duty-free imports up to a certain threshold.

Others suggest reallocating part of the government's 0.3% special cash incentive on garment exports—worth nearly Tk2,000 crore annually—to support the textile sector directly.

Commerce Secretary Mahbubur Rahman acknowledged the dilemma, saying the government is examining alternatives.

"The textile industry is facing problems, no doubt. Something has to be done," he told The Business Standard. "We are thinking about what options are possible."

"There are ways. There could be a mix— imposing restrictions at places and relaxing steps at other places, so that all sectors are treated how they should be," said Muhammad Abdul Mazid, former chairman of NBR.

"They should not be seen as two mere industries, they are a vital part of the economy. There must be a holistic approach to balance the tariff issues," he said. While NBR can reassess the impact on withdrawal of bond facilities from certain industries, the commerce ministry has to align tariff structure to the country's key trade partners, he said, suggesting all parties involved to sit together to find solutions.

Cash incentives, subsidies, loans and weighing on options such as anti-dumping duty are among other measures suggested to support the industry which is deemed to be affected by changes in import tariff structure.

The challenge now is to act quickly—and carefully. A misstep could fracture a value chain that took decades to build, at a time when Bangladesh can least afford another economic shock.

The main reason for restoring the lottery system in primary share allocation is to boost turnover in the secondary market against the backdrop of a persistent investor exodus.

The IPO lottery system was removed in April 2021 after it was repeatedly accused of depriving retail investors of IPO shares. The Bangladesh Securities and Exchange Commission (BSEC) replaced it with the pro-rata allotment system, which enabled share allocation to every valid applicant in proportion to the quantities applied for.

"We have observed that IPO shares were mostly exhausted by high net worth individuals [under the pro-rata system]. They have more money. They applied for more shares and they got more," said BSEC spokesperson Abul Kalam.

According to the market watchdog, the very objective behind removing the lottery system could not be achieved. Instead, enthusiasm surrounding new listings faded as retail investors received only nominal numbers of shares.

The BSEC brought back the lottery system even though the taskforce assigned to suggest capital market reforms made no recommendation on IPO share distribution.

"Out of 200 public opinions that we received [on the revised rules], 171 voted for the lottery system," said Kalam.

"We did not recommend bringing back the lottery system in IPO," said Md Moniruzzaman, managing director and CEO of Prime Bank Securities Ltd, adding that IPO hunters might have pushed for the return of the system.

"They might have given votes in the public opinion. It is true the lottery system encouraged participation with the hope for higher profits," said Moniruzzaman, who was in a focus group responsible for assisting the taskforce.

Under the pro-rata system, the IPO share pool was divided into different investor categories with predefined quotas for each.

The main categories were general investors (including retail and local individuals), non-resident Bangladeshis (NRBs), and eligible investors (institutional or qualified investors). The total number of shares allocated to each category was fixed as a proportion of the IPO size.

That meant if the eligible or institutional portion was oversubscribed, each applicant in this segment received shares in proportion to the amount applied for.

"The pro-rata system prefers big investors," said Kalam.

Another reason for removing the lottery system earlier was to curb investors' speculative behaviour.

The lottery-based IPO process encouraged short-term speculation, with investors applying mainly to gain quick listing profits rather than long-term investment returns.

However, the BSEC took into consideration the steep decline in the number of BO accounts since the repeal of the lottery system.

"There were nearly 3 million BO accounts in the market when the lottery system was in place. Now it has fallen to 1.6 million. Market turnover has also declined. We believe the reintroduction of the lottery system will bring back the festive mood [around listings] and increase turnover," said the BSEC spokesperson.

When retail investors make profits from IPO shares, they reinvest a portion of those profits in the secondary market, Kalam added.

Lottery-driven IPOs used to witness excessive oversubscription-sometimes hundreds of times the required amount-creating operational and settlement pressure in the IPO process.

According to Kalam, this will not happen now as BO account opening has become more tightly regulated. Investors must have a bank account and a bank certificate in their own name before opening a BO account. Opening a bank account requires a national ID card.

"Fake accounts can no longer be used to apply for IPO shares," said the BSEC spokesperson.

The regulator has also eliminated, under the revised IPO rules, the minimum requirement of Tk 50,000 investment in the secondary market for each BO account.

"We have brought back the lottery system to ensure more shares for general investors. We believe this will increase investor participation in the market," Kalam added.