Businesses yesterday called for structural reforms in the tax system to reduce the cost of doing business, ease compliance burdens, and improve investment competitiveness.

In this regard, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) placed a set of proposals for the upcoming national budget before the National Board of Revenue (NBR) at a pre-budget discussion held in Dhaka.

FBCCI Administrator Md Abdur Rahim Khan presented the major proposals at the discussion.

The apex trade body called for reducing the minimum tax from 1 percent to 0.25 percent on annual gross turnover, with a long-term plan to phase it out. It said the current rate forces firms to pay tax even in loss-making periods amid high inflation, elevated interest rates, dollar shortages, and rising input costs.

The FBCCI also proposed zero minimum tax for businesses operating at a loss with zero or negative taxable income based on audited accounts, newly established firms for the first three years, and businesses affected by natural disasters, epidemics, or government-declared economic crises.

The trade body termed the turnover-based minimum tax system unfair, saying it undermines equity in taxation, and urged a more realistic framework reflecting actual business performance.

It also demanded raising the personal tax-free income threshold to Tk 500,000 and reducing corporate tax rates to ease pressure on individuals and firms.

The FBCCI called for a gradual reduction of advance income tax (AIT) at the import stage, saying it raises upfront costs and strains liquidity for import-dependent industries.

It also proposed rationalising withholding tax rates and lowering them on machinery and raw materials to support industrial expansion.

On indirect taxation, it suggested a uniform 2 percent VAT on all locally traded goods to simplify compliance and reduce disputes.

In the customs regime, the FBCCI proposed capping import duty at 1 percent on industrial machinery, spare parts, raw materials, and inputs not produced locally, and 3 percent for locally produced items.

Institutionally, it recommended establishing separate Large Taxpayer Units (LTU) and Medium Taxpayer Units (MTU) in Dhaka and Chattogram to improve tax administration.

Speaking as the chief guest, Finance Minister Amir Khosru Mahmud Chowdhury said the government is committed to ensuring a business-friendly environment and removing barriers to doing business.

Business concerns would be reflected in the upcoming budget, he assured.

Commerce Minister Khandaker Abdul Muktadir said the economy needs revitalisation through new investment and sustaining existing industries, while pointing to challenges in banking and logistics and urging specific private sector proposals.

NBR Chairman Md Abdur Rahman Khan, former FBCCI president Mir Nasir Hossain, and International Chamber of Commerce, Bangladesh (ICCB) President Mahbubur Rahman also spoke at the event.

Gold is seen as a safe haven asset in times of volatility but investment volumes fell in the first quarter, industry data showed Wednesday, as the Middle East war forced some investors to liquidate holdings to raise cash.

Investment volumes fell by five percent during the quarter, according to the World Gold Council, despite gold having set a record high in January as investors sought refuge from a weak dollar and US President Donald Trump’s erratic policy shifts.

“Hefty outflows in March reversed much of the sizable January and February inflows” into gold exchange-traded funds (ETFs), an easy means to invest in the precious metal, the council said in its quarterly report.

And that was linked in particular to North American funds.

“Oftentimes because gold is so widely accepted, it is the first thing that you sell when you need a certain access to cash or to liquidity,” said World Gold Council expert Juan Carlos Artigas.

Following the US-Israeli attacks on Iran at the end of February, Tehran closed traffic through the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas normally flows.

That sent oil and gas prices rocketing higher and disrupting markets, forcing many investors to raise cash to settle their positions.

The prospect of the US Federal Reserve raising interest rates in response to higher inflation boosted the dollar, making gold more expensive for investors who don’t hold dollars.

If demand for gold dropped by volume, the value of purchases jumped by 62 percent.

Gold touched a new record just shy of $5,600 per ounce at the end of January, and averaged $4,873 per ounce over the quarter.

High prices, driven largely by investment holdings, hit demand for jewellery, however.

The jewellery market was also disrupted by the war, with the Middle East a key shipping hub.

Olympic Industries, the country's leading branded biscuit manufacturer, is set to invest Tk26.22 crore to purchase 489.89 decimals of land adjacent to its existing factory for future expansion.

The decision was approved at a board meeting held on Tuesday via Zoom, according to a disclosure published on Wednesday (29 April) through the stock exchanges.

Over the years, the company has invested hundreds of crores to acquire lands adjacent to its factory in preparation for scaling up operations.

At the meeting, the board also approved the company's financial statements for the first nine months ending in March. Its statements showed that revenue in the third quarter (Jan-Mar) rose by 8.61%, while nine-month revenue grew by 5.30%.

However, net profit declined by 33.75% in the third quarter and by 6.97% over the nine-month period, which the company attributed to a higher tax burden.

During the July to March period, revenue stood at Tk2,256 crore, while net profit fell to Tk148.18 crore, according to the report.

Olympic Industries said its board has approved the purchase of 322 decimals of land adjacent to its Lolati factory at a total price of Tk17.71 crore to support future expansion.

At the same mouza in Madanpur of Narayanganj, the company also decided to acquire 84.90 decimals of land for Tk4.67 crore for expansion purposes.

In addition, it approved the purchase of two more plots – 64.99 decimals and 18 decimals – near the Lolati factory at agreed prices of Tk3.25 crore and Tk59.40 lakh, respectively, to facilitate further construction and expansion.

In the disclosure, the company said the purchaser, Olympic Industries, will bear all registration costs, including VAT, tax, and other charges.

National flag carrier Biman Bangladesh Airlines is set to sign a landmark aircraft purchase agreement with Boeing today, in what is expected to be the biggest fleet expansion move in the airline’s history.

The formal agreement signing ceremony will be held at 7:30 pm at a Dhaka hotel, Biman General Manager (Public Relations) Boshra Islam told The Daily Star.

Senior government officials, diplomats and aviation executives are expected to attend the programme.

Biman Managing Director and CEO Kaizer Sohel Ahmed will sign the agreement on behalf of the airline, while a Boeing representative will sign for the manufacturer.

Foreign Minister Khalilur Rahman, Civil Aviation and Tourism Minister Afroza Khanam Rita, State Minister M Rashiduzzaman Millat and US Ambassador Brent T. Christensen, among others, will attend the ceremony, Boshra said.

Under the proposed agreement, Biman will purchase 14 new aircraft, including eight Boeing 787-10 Dreamliners, two Boeing 787-9 Dreamliners, and four Boeing 737-8 MAX jets, with an estimated list value of around $3.7 billion (Tk 37,000 crore).

Officials said the order is designed to modernise Biman’s fleet, expand long-haul capacity and strengthen regional operations at a time when Bangladesh’s passenger demand continues to rise.

The wide-body Dreamliners are expected to reinforce services to Europe, the Middle East and Asia, while the 737 MAX aircraft would support regional and short-haul routes.

The expected signing comes as Hazrat Shahjalal International Airport’s third terminal nears launch, a development widely seen as central to Bangladesh’s ambition of becoming a stronger regional aviation hub.

The deal is also expected to conclude more than three years of intense competition between Boeing and its European rival Airbus for Biman’s next major fleet order.

Under the previous Awami League government, a policy decision was announced to buy 10 Airbus aircraft. After the fall of Sheikh Hasina’s government in the 2024 mass uprising and amid pressure related to US reciprocal tariffs, the interim government shifted in favour of Boeing.

Airbus officials earlier told The Daily Star that introducing Airbus aircraft would diversify Biman’s all-Boeing fleet and deepen economic ties with the European Union.

Boeing, however, mounted an intensive push to retain its long-standing dominance, offering Dreamliners, freighter options and narrow-body aircraft while maintaining sustained engagement with policymakers in Dhaka.

“The aircraft buying proposal that we are making may be valued between Tk 30,000 crore and Tk 35,000 crore. We will have to pay this amount over 10 years. In fact, it may take even longer than that, because the payment schedule is long-term. It may take as long as 20 years to complete the payment. So, if you consider this, we may have to pay around Tk 1,500 crore to Tk 2,000 crore per year,” a top Biman official said.

State Minister Rashiduzzaman Millat said last week that the government was working to sign a deal with Boeing by April 30 to purchase 14 aircraft and lease several others as part of efforts to turn Biman Bangladesh Airlines into a profitable entity.

The national flag carrier is currently operating international routes with around 19 aircraft -- well below the estimated requirement of 30 to 35 aircraft needed to meet growing passenger demand and support planned network expansion, according to sources.

Biman’s fleet is currently dominated by Boeing aircraft, and the airline plans to expand its fleet to 47 by 2041.

The first aircraft from Boeing is scheduled for delivery in October 2031, according to Biman sources, while the remaining aircraft are expected to be delivered by November 2035.

The government will provide a sovereign guarantee to Biman Bangladesh Airlines to buy 14 aircraft from Boeing.

A sovereign guarantee is a commitment by the state to cover the debt or financial obligations of another entity if it defaults, reducing risk for lenders and improving access to financing for large or strategic investments.

The interim government earlier pledged to buy 25 aircraft from Boeing as part of efforts to reduce the trade deficit with the United States. Following further evaluation, Biman finalised its decision.

Oil prices rose Wednesday as talks to end the Iran war appeared to be at a standstill and the crucial Strait of Hormuz no nearer being reopened.

While the White House has said Donald Trump and his team were considering Tehran’s latest proposal to restore traffic through the waterway, CNN and the Wall Street Journal said the president was sceptical.

The Islamic republic this week submitted a plan that would reportedly see it ease the chokehold and Washington lift its retaliatory blockade on the country’s ports as talks continued, including over its nuclear programme.

While US Secretary of State Marco Rubio said Iran’s proposal was “better than what we thought they were going to submit”, he insisted any eventual deal had to be “one that definitively prevents them from sprinting towards a nuclear weapon”.

Iranian defence ministry spokesman Reza Talaei-Nik said Washington “must abandon its illegal and irrational demands”, adding the United States was “no longer in a position to dictate its policy to independent nations”.

Qatar warned of the possibility of a “frozen conflict” if a definitive resolution is not found.

Concerns about the stalled peace push have pushed crude prices higher for more than a week, with Trump’s decision to cancel his envoys’ trip for peace talks in Pakistan last weekend adding to the downbeat mood.

Brent is above the level it hit before the two sides announced a ceasefire at the start of April, while West Texas Intermediate broke $100 Tuesday for the first time in two weeks.

Both contracts continued to rise Wednesday, with Brent holding above $113 and WTI above $101.

“Iran wants the blockade lifted and access to its flows restored,” wrote Stephen Innes at SPI Asset Management.

“Washington holds that lever and is in no hurry to give it away without extracting value.

“Meanwhile, the longer this drags on, the more second-order effects start to bite. Storage pressure builds, production risks emerge, and the system begins to strain in ways that futures prices cannot ignore.”

There was little major reaction to news that key producer United Arab Emirates had decided to withdraw from the OPEC and OPEC+ oil cartels on Friday, calling it a strategic decision.

Still, CNN also cited sources familiar with the mediation as saying the two sides were not as far apart as they seemed.

It added that intense diplomacy continued and talks were focused on a staged process with the first part of a potential deal aimed at returning to the pre-war status and reopening the Strait.

Iran’s nuclear programme would be dealt with down the line, it said.

Despite the uncertainty, Asian equity markets mostly rose with Hong Kong up more than one percent, while Shanghai, Seoul, Wellington, Manila, Bangkok, Mumbai and Jakarta also advanced.

Sydney, Singapore and Taipei fell along with London, Paris and Frankfurt.

Tokyo was closed for a holiday.

Traders were given a weak lead from Wall Street, where the Nasdaq led losses owing to a tech selloff that came on the back of a report in the Wall Street Journal that ChatGPT-maker OpenAI had missed targets on the number of users and revenue.

The news came as markets gear up for the release of earnings from Wall Street titans Amazon, Google, Meta and Microsoft this week.

The Federal Reserve will also conclude a two-day meeting later in the day, with investors keeping tabs on its outlook for inflation and interest rates as energy costs soar.

The country's insured population has fallen sharply despite a costly reform initiative, with the number of policyholders dropping by around 40% during the implementation of a Tk925-crore development project.

When the Bangladesh Insurance Sector Development Project was launched in 2018, the total number of insured individuals – both life and non-life – stood at about 1.36 crore. The project aimed to raise this to 2 crore within four years. Instead, the number declined to 82.2 lakh by the end of 2024, according to data from the Insurance Development and Regulatory Authority.

Of the country's 79 insurers, only two are state-owned – one each in the life and non-life sectors. But the World Bank-aided project focused only on the two state insurers and the regulatory body, the Insurance Development and Regulatory Authority (Idra).

The project aimed at raising insurance coverage, improving services, introducing automation and restoring public trust in the insurance sector by strengthening the two state insurers and the regulator.

Inclusion of only two state-owned insurers – Jiban BimaCorporation and Sadharan Bima Corporation – raised questions about the limited scope of the intervention.

Project Director Md Abdur Rab told The Business Standard, "The time to increase penetration has not yet arrived. The project is currently nearing completion; I hope its operations will play a significant role in increasing penetration in the future."

Abu Abed Muhammad Shoaib, deputy general manager of the ICT Division at Jiban Bima Corporation, said, "There has been some progress as a result of this project. Certain tasks that were previously handled manually are now being digitised. However, the use of all modules and sub-modules of the project's software has not yet commenced."

Automation goals fall short

A key objective of the project was to automate operations at Idra, Jiban Bima Corporation, Sadharan Bima Corporation, and the Bangladesh Insurance Academy. However, officials say progress has been limited.

Mohammad Jainul Bari, who served as chairman of Idra from June 2022 to September 2024 and later as chairman of SadharanBima Corporation, noted that automation efforts fell short, particularly due to poor performance by software vendors.

"Critical goals such as real-time monitoring and improved supervision could not be achieved," he said.

Md Abdur Rab said a software system comprising 121 modules has been developed through this project. He noted that while some of these modules are already in use, others are currently in the process of being implemented. These modules are intended to establish a new system within the insurance sector, ensuring the protection of policyholders' interests.

He further added that other insurance companies will be brought under the umbrella of this software shortly.

Brigadier General (retd) Shafique Shamim, general secretary of the Bangladesh Insurance Forum and managing director of SenaInsurance, said the project had contributed to partial improvements across the sector, particularly in automation efforts involving the regulator and state-owned entities. However, he noted that not all insurers have been able to adopt the systems fully, citing higher management costs and regulatory constraints as key barriers.

Economy expands, insurance lags

The fall in coverage coincided with a decline in insurance penetration, measured as a share of gross domestic product, from 0.55% in 2018 to 0.36% in 2024. Life insurance led the downturn. The performance remains significantly below regional peers such as Sri Lanka at 1.15%, India at 3.46% and Malaysia at 4.51%.

This decline has occurred despite rapid economic growth. Bangladesh's GDP expanded from around Tk22.5 lakh crore in 2018 to Tk50.48 lakh crore in 2024. However, insurance premium income failed to keep pace with the broader economy.

Premium growth collapses

The sector has also seen a sharp slowdown in premium income growth.

Life insurance premium growth, which stood at 9.64% in 2018, turned negative by 2024. Overall premium growth – combining life and non-life insurance – fell from 10.76% to just 0.49% over the same period.

Costs rise, deadlines extended

The five-year project initially had a budget of Tk632 crore but was revised three times to Tk925 crore due to slow implementation. Its tenure was extended five times and is now set to conclude in mid-2026, after an additional six-month extension beyond the latest December 2025 deadline.

In its final phase, the project is seeing a surge in spending. Around Tk175 crore is being disbursed in a single fiscal year, largely to clear accumulated bills. As of June 2025, about 81% of the total allocation had been utilised, with only Tk3.82 crore remaining.

Md Abdur Rab noted that expenditure in the final year will be higher than in previous years, as outstanding bills for various completed works are now being settled. "Consequently, a significant amount of funding will be required at once."

He remarked that managing this level of expenditure remains a challenging task.

Capacity gaps and leadership issues

Sector insiders point to a lack of technical expertise as a major constraint.

Several project directors were career bureaucrats with limited experience in the insurance sector, leading to gaps in implementation and continuity.

"The majority of those involved in implementing the project were from outside the insurance sector," former Idra member Sultan-ul-Abedin Molla said.

He added, "The project directors were all joint secretaries, who lacked specific experience in insurance. Furthermore, several project directors were reluctant to carry out their duties. Consequently, the project suffered from a lack of skilled personnel during its implementation."

Erosion of public trust

Idra's annual report attributes the sector's stagnation largely to declining public confidence, particularly due to delays in claim settlements. This has slowed both new customer acquisition and premium growth.

Sultan-ul-Abedin Molla said the sector's underperformance reflects deeper structural issues.

"While other sectors of the economy have grown, insurance has lagged. Lack of transparency and trust has driven down penetration relative to GDP," he said.

Brigadier General (retd) Shafique Shamim said that although regulatory reforms under the 2010 law have brought some discipline, delays in claim settlements and low public awareness remain major challenges, even as economic growth, a rising middle class and expanding digital services offer strong potential for the sector.

Project goals largely achieved: WB

The World Bank, however, said it is satisfied with the project outcomes, which were largely fraught with delays, highlighting broader issues of political inertia and the complexities of governance that can impede regulatory progress.

In its project implementation status report in April 2025, the global lender said the project has enabled Idra to increase its technical capacity to develop new insurance products, such as the introduction of new regulations for bancassurance in 2023, a focus on microinsurance and Islamic insurance takaful, draft of a new National Insurance Policy for 2024-2029, draft amendments to the Idra Act and Insurance Act.

Jamuna Bank has reported that its consolidated net profit jumped by 100% in 2025 compared to the previous year.

According to the bank's price-sensitive statement, its consolidated net profit of Tk558 crore and earnings per share stood at Tk5.92, which was Tk279 crore and Tk2.97 respectively a year ago.

The bank said earnings per share increased due to an increase in income from government securities and a decrease in provisions as compared to the previous year.

The board of the bank also recommended a 29% cash dividend to its shareholders for the year of 2025 ended 31 December.

To approve the dividend and audited financial statement, the bank has scheduled the annual general meeting date for 27 July, and the record date is set for 3 June.

Russian Finance Minister Anton Siluanov said on ​Wednesday that the decision by the United Arab Emirates ‌to leave Opec will mean the oil-producing countries will boost production, bringing down global prices in the future.

Russia is a member of the ​Opec+ group of countries and has been coordinating ​its policies with Opec members. Russia is seen as the main beneficiary of the spike in global ​oil prices due to the war in the Middle East.

“Today ​we hear that one of the countries, the United Arab Emirates, is leaving Opec. What does this mean? It means that the ​country can produce as much oil as its production ​capacities allow and release it onto the market,” Siluanov said.

Siluanov’s comments marked ‌Russia’s first reaction to the surprise UAE exit. Russia has strong ties with both the UAE and Opec leader Saudi Arabia.

“If Opec countries conduct their policies in an uncoordinated manner (after ​UAE exit) and ​produce as much oil as their production capacities allow and as much as they want, prices ​will go down accordingly,” he added.

He stressed that ​for now the oil prices were supported by the blockade of the Strait of Hormuz, and that his predictions of oversupply referred ​to the situation when the passage ​would open at some point in the future.

When the IMF’s Asia-Pacific director signalled to Bangladesh’s delegation in Washington last week that the expected $1.3 billion tranche would not be released in June, the key message was not financial but what Bangladesh can credibly offer in return, and what it cannot.

The Spring Meetings’ macro position was the strongest in three years. Gross reserves are roughly $35 billion, the BPM6 measure is above $30 billion for the first time since mid-2023, and March remittances reached a record $3.75 billion. At this level, the IMF pause signals reform credibility rather than liquidity.

The four unmet conditions remain unchanged: revenue mobilisation, banking governance, removal of electricity and gas subsidies, and a market-determined exchange rate. All were agreed under the $4.7 billion programme approved in January 2023 and expanded to $5.5 billion in June 2025. All have been monitored. None has moved materially in eighteen months. The interim administration stabilised the currency and rebuilt reserves, but did not deliver structural reform.

Pakistan in 2014 is a relevant comparison. It entered a three-year IMF programme in September 2013 with reserves near $6 billion, an 8 percent fiscal deficit, and similar reform conditions. By mid-2014, reviews had stalled on comparable structural issues.

The difference was what Pakistan could offer. I worked on the privatisation of state oil and gas firms during that programme. The value was not only revenue but a pipeline of sellable state assets. When the Oil and Gas Development Company’s follow-on was delayed in November 2014 due to falling oil prices, the IMF accepted it because the broader privatisation programme remained intact. A credible monetisation pipeline strengthens negotiating position.

That lever is absent in Bangladesh. It has never issued a Eurobond. Commercial borrowing is around 11 percent of external debt, with the rest largely concessional. This worked when multilateral flows were predictable, but becomes a vulnerability as LDC graduation on November 24, 2026 (or delayed) shifts financing terms, and IMF support is uncertain.

There is also no asset pipeline. The BSEC has identified fifteen profitable state-owned enterprises and multinational subsidiaries for listing over three years, but none have progressed. Banks are under restructuring, with the ADB’s $500 million banking-sector support focused on stabilisation, not privatisation. The Sammilito Islami Bank merger, formalised in December, remains far from saleable.

The core constraint is fiscal, not external. Tax-to-GDP fell to 6.56 percent in FY25, below the programme assumption of 7.9 percent for FY24, with projections reaching 10.5 percent only by FY35. The Centre for Policy Dialogue has repeatedly highlighted this, and Fahmida Khatun has stressed rising debt-service pressure as LDC graduation approaches. Without revenue mobilisation, remittance-led stabilisation will fade, and monetary policy will carry an unsustainable burden.

A programme lapse would not cause immediate stress, given strong reserves, but the structural cost would be significant. ADB and World Bank operations are cross-conditioned on IMF continuity and would be reoriented if it fails. The policy anchor would weaken just as graduation removes concessional financing advantages.

Between now and the October Annual Meetings, a credible alternative is needed. A B2/negative Eurobond would be costly. More viable options include a remittance-backed Sukuk, a diaspora instrument, or partial listing of a profitable state entity. The Finance Ministry could task the central bank and Privatisation Commission with a monetisation pipeline before the June ECOSOC meetings.

Stabilisation without reform is a rolling arrangement. The challenge is what can credibly be placed on the table in return.

Listed multinational companies (MNCs) in Bangladesh had another difficult year in 2025, with most failing to claw back profits eroded by inflation and shrinking consumer demand.

Of the 13 MNCs listed in the stock market, 11 follow a December fiscal year-end. Ten have published results so far.

As per the published data, three saw profits rise in 2025 but remain below the previous year’s level, four hit five-year lows, and two incurred the highest losses in their operational history in the country. Only one, Robi Axiata, posted record profits.

“The economic situation was the main factor,” said Shahidul Islam, CEO of VIPB Asset Management Company, who has tracked the companies’ performances for years as a major shareholder with billions of taka invested.

Inflationary pressure raised raw material costs, but companies could not pass them on to consumers whose demand had already shrunk, he said.

Analysis of financial reports shows that the damage was broad. Most companies saw sales growth slow last year. Four -- Grameenphone, Bata Shoe, Heidelberg Cement, and Linde BD -- saw sales fall outright.

Among the companies, British American Tobacco’s (BATBC) profit fell 67 percent to Tk 584 crore in 2025, from Tk 1,788 crore in 2023, the highest level in the last five years. The figure was Tk 1,750.68 crore in 2024.

The tobacco company said, “2025 was marked by a challenging socioeconomic and geopolitical landscape characterised by inflationary pressures, currency devaluation, and constrained consumer purchasing power.”

The global economic slowdown and rising raw material costs added further complexity to the operating environment. The top two segments of the company recorded a volume decline of approximately 10 percent, it added.

RAK Ceramics posted its highest-ever loss of Tk 39 crore last year, a reversal from Tk 90 crore in profit in 2021.

Singer Bangladesh also incurred a huge loss of Tk 224 crore , the largest in its recent history.

Heidelberg Cement’s profit more than halved from its 2021 peak of Tk 47 crore.

The country’s largest telecom operator, Grameenphone’s profit dropped 18.5 percent year-on-year. The company attributed the decline to economic weakness and political uncertainty following the July 2024 uprising.

“The prolonged political uncertainty weakened business and investor confidence, while persistent inflation subdued job creation, and declining household purchasing power collectively constrained overall market demand,” it said.

Unilever Consumer Care and LafargeHolcim remained profitable but 18 percent and 14 percent below their 2023 levels, respectively.

Linde BD’s profit collapsed to Tk 34 crore after an anomalous Tk 642 crore in 2024, which was inflated by a one-off asset sale.

Robi Axiata bucked the trend, with profits rising 33 percent year-on-year to Tk 937 crore in 2025.

Marico and Berger Paints, which follow a March fiscal year-end, were excluded from the analysis.

The outlook for MNCs, Shahidul said, has darkened sharply in recent months.

A few months ago, conditions looked promising, but the US-Israel war on Iran has introduced new uncertainty.

“Now, the outlook depends on the war, thus the oil price. The overall economic situation may worsen if oil prices rise and the war is prolonged. It will impact the performance of the companies,” he added.

Bangladesh’s business climate is being held back by regulatory bottlenecks, inconsistent policies, weak trust, and institutional inefficiencies, which are reducing investment potential and weakening long-term investor confidence, experts said at a dialogue yesterday.

The remarks were made at a discussion titled “Business climate dialogue on improving the investment climate: why it is critical for the new government priorities the upcoming national budget”, organised by the Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI) at its auditorium at Police Plaza in Gulshan.

“The real challenge is not competition but entering the market itself. Firms must be ready for a long-term commitment because operational hurdles -- from licensing delays to compliance burdens -- can discourage even established companies,” said Zinnia Huq, chief financial officer of Unilever Bangladesh.

She said regulatory approvals often take months due to weak coordination among agencies, which leads to conflicting requirements, such as dividend remittance rules clashing with tax approvals.

She added that legal risks remain high as cases move through multiple channels, reducing predictability.

Huq further said that labour regulations are uncertain because interpretations often change and are sometimes applied retrospectively, making business planning difficult.

Tax administration, she added, sometimes raises large initial claims against compliant firms, which are later adjusted after review.

Nuria Lopez of the European Union Chamber of Commerce in Bangladesh said the main issue is not a lack of opportunity but weak investor confidence, adding that an unfriendly business environment and unclear policy direction continue to discourage foreign investment.

She also said that taxation places additional pressure on businesses, as authorities often rely heavily on compliant firms, especially multinationals, creating an uneven playing field.

Sector-specific lobbying limits competition and makes it harder for new firms to enter the market, she added.

Lopez further said that institutional weaknesses, energy shortages, and the lack of a clear investment roadmap are increasing uncertainty, warning that Bangladesh could fall behind regional competitors.

Margub Kabir of Margub Kabir and Associates said trust is central to investment decisions and depends largely on dispute resolution.

He said Bangladesh remains weak in enforcing contracts and has previously ranked among the lowest globally due to a slow and overloaded judicial system.

Kabir also said arbitration, which foreign investors often prefer as it helps avoid court delays, offers limited benefit. This is because enforcing arbitral awards still requires going through the same lengthy court process, which reduces their effectiveness.

He added that the main problem is not a lack of laws but weak implementation, stressing the need to simplify procedures, appoint specialised commercial judges, and introduce faster enforcement systems.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said improving the business environment must begin with core infrastructure reforms.

He said a reliable energy supply is the most urgent need, especially for industries moving into higher-value production. He added that man-made fibre manufacturing requires uninterrupted power, as even short outages can stop production completely.

He also pointed to inefficiencies in key logistics routes, including the Dhaka-Chattogram highway and port operations, which are increasing costs and reducing competitiveness.

M Masrur Reaz of Policy Exchange Bangladesh said Bangladesh’s past growth has been driven largely by private sector investment, which helped manufacturing rise from 8 per cent of GDP decades ago to 25 per cent today.

However, he said this momentum is now slowing, with private investment declining and foreign direct investment remaining below 1 per cent of GDP, far behind regional peers.

He said this slowdown comes at a critical time, as the country aims to become a $1 trillion economy and create millions of jobs. These goals depend heavily on higher investment.

He added that the upcoming budget will be an important policy signal.

Reaz also highlighted practical challenges, including weak logistics, low productivity, energy shortages, and limited export diversification, which are worsened by fragmented reforms and poor coordination across sectors.

Farooq Ahmed, secretary general of MCCI, Sumitra Kumar Mutsuddi, head of corporate at BSRM, and Sumaiya T Ahmed, head of sustainability at Pran-RFL Group, also spoke at the event.

Bangladesh's investment climate is being vitiated by a mix of bureaucratic delays, policy uncertainty and rising business costs, making it harder for both local and foreign investors to expand operations and create jobs.

Experts say unless these longstanding barriers are addressed quickly, the country risks losing competitiveness and missing major investment opportunities.

Policy Exchange Bangladesh has identified eight major obstacles, with bureaucratic complexity and a restrictive regulatory framework topping the list.

Energy shortages, infrastructure bottlenecks, high tax pressure, weak institutional coordination and the absence of a clear investment strategy were also cited as major concerns at a policy dialogue in the capital on Wednesday.

The Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh jointly organised the meeting.

Policy Exchange Bangladesh Chairman and CEO Dr M Masrur Reaz presented the keynote paper titled "Improving the Investment Climate: Why It's Critical for New Government Priorities and the Upcoming National Budget."

In his presentation, Masrur Reaz said the country also faces the absence of a coordinated domestic and foreign investment strategy, which continues to weaken investor confidence. Newspapersubscriptions

He identified additional barriers including the lack of structured investment promotion, a gap between political commitments and implementation, and weak coordination between the public and private sectors.

He also pointed to limited coordination between the Prime Minister's Office and various ministries, the absence of diversified competitive sectors, leaving the economy heavily dependent on only five key sectors, and inadequate post-investment support or aftercare services.

Against this backdrop, Policy Exchange proposed a set of immediate reforms to strengthen investor confidence.

Masrur Reaz said the government can pursue seven priority reforms. Countrypolitics overview

These include formulating a comprehensive national investment policy, simplifying business registration procedures, addressing infrastructure and energy constraints, ensuring efficient use of economic zones, developing skilled human resources, promoting green investment, and establishing a modern legal framework for contract enforcement and dispute resolution.

BGMEA President Md Mahmud Hasan Khan attended the event as special guest, while EuroCham Chairperson Nuria López, corporate lawyer Barrister Margub Kabir, and Zinnia Huq, Chief Financial Officer (CFO) of Unilever Bangladesh, participated as panel speakers.

EuroCham Chairperson Nuria López said the absence of a free trade agreement (FTA) with the European Union, Bangladesh's largest export destination, is already affecting investor confidence.

"Do we have a free trade agreement with our major customer at this moment-the European Union? No," she said, noting that countries such as Vietnam and India have already secured similar agreements.

She warned that without preferential access to the EU market, Bangladesh risks losing competitiveness to regional peers offering more predictable trade frameworks.

"We need to have, we must have, we must start right now an FTA," López said. "If we don't have free trade access to our largest market, we don't have a horizon to invest." Economicanalysis reports

She also said uncertainty over future market access is influencing investment decisions.

"I have recently started a new business in the agro-processing sector, but I am uncertain about the future. I do not know whether I will be able to export to Europe on equal terms with competitors from countries that already enjoy free market access," she said.

López stressed that predictability is essential for attracting long-term investment, adding that Bangladesh currently lacks it.

"We don't have predictability. We don't know what's going to happen in the future," she said, questioning whether there is a clear and investor-friendly policy direction.

She linked the urgency of an EU FTA to Bangladesh's broader challenge in attracting foreign direct investment (FDI), saying policy uncertainty continues to undermine investor trust.

Addressing the event as special guest, BGMEA President Md Mahmud Hasan Khan said Bangladesh should expand export markets through bilateral agreements with countries such as South Africa, Brazil and Turkey.

He noted that around US$8 billion in new opportunities have emerged in the ready-made garment sector, with further potential for expansion. Bangladeshmarket analysis

However, he stressed that high tariffs in these markets make such agreements necessary.

"We are discussing this matter with the government," he said.

He also identified energy shortages as the most critical challenge for businesses.

"For entrepreneurs, energy is a greater concern than financial constraints," he said, adding that without resolving energy and infrastructure bottlenecks, financial support would have limited impact.

Unilever Bangladesh CFO Zinnia Huq said business registration and documentation processes in Bangladesh are extremely slow and time-consuming.

She pointed to weak coordination among government agencies, which reduces efficiency and delays business operations.

Despite a double taxation avoidance treaty, she said prior approval from the National Board of Revenue (NBR) is still required for dividend remittance, making the process unnecessarily complex. She also highlighted a lack of transparency in audit procedures.

Barrister Margub Kabir said dispute resolution is central to investor confidence, but Bangladesh continues to struggle with a slow judicial system.

He cited the example of a Japanese company operating in Bangladesh for 25 years, while a contractual dispute dating back to 2018 remains unresolved.

"There is no lack of laws in Bangladesh; the issue is making them simpler and the process faster," he said.

Kabir added that foreign investors generally prefer arbitration to avoid lengthy court proceedings. However, even after arbitration awards, enforcement through courts faces similar delays.

He called for specialised commercial courts, faster enforcement mechanisms, and judges with commercial expertise to ensure timely resolution of disputes.

MCCI Secretary General Farooq Ahmed delivered the welcome address.

Business leaders' hopes for a lighter tax burden in the upcoming national budget were effectively dashed yesterday (29 April) as the government rejected pleas for tax cuts for now. Instead, it assured removal of the systemic obstacles that have long stifled the ease of doing business.

The message from the government came during a pre-budget consultation jointly organised by the National Board of Revenue (NBR) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

With the national budget set to be unveiled in June, business leaders raised a range of demands at a high-level meeting with government representatives, calling for tax reductions and the removal of various barriers to doing business to support trade and commerce under current conditions, while urging the government to take concrete steps to address these challenges.

Responding to the demands, Finance Minister Amir Khosru Mahmud Chowdhury said, "We would like to provide relief in tax and VAT in these hard times, but we may not be able to do so in this budget. However, we will remove barriers to business."

He urged businesses to identify specific problems, adding, "Inform us about corruption at ports and all the obstacles to doing business. We will remove these within the next three months."

Highlighting the broader economic strain, the minister called on businesses to support the government in navigating the current crisis. "We are going through a difficult time, and everyone must understand that," he said, asking for cooperation at least for this budget cycle.

At the event, NBR Chairman Abdur Rahman Khan also cautioned that tax and VAT decisions may not meet business expectations, though he echoed assurances that efforts would be made to simplify doing business.

Businesses press for tax reforms

Leading business figures from various sectors outlined a range of challenges in their remarks at the meeting, highlighting the obstacles they face across industries.

The FBCCI called for "special priority" to create a business-friendly tax system by eliminating harassment and complexities in tax collection.

The apex business body demanded an increase in the tax-free income threshold for individuals, a reduction in corporate tax rates, and the abolition of the mandatory minimum tax on company turnover – which firms must pay even when incurring losses.

It also proposed a gradual withdrawal of advance income tax (AIT) and advance tax (AT) at the import stage, while suggesting measures to expand the overall tax base. In total, the FBCCI submitted 165 written proposals to the government ahead of the budget, which is expected to be announced in June by the BNP-led administration.

In his written statement, FBCCI Administrator Abdur Rahim Khan said reducing the cost of doing business, attracting and protecting investment, improving port capacity, ensuring balanced currency and tariff policies, lowering logistics costs, and strengthening governance and transparency in infrastructure – including power and energy – were essential.

Small industries under pressure

Business leaders also warned that small industries are under severe strain. Obaidur Rahman, president of the Bangladesh Aluminium Manufacturers Association, urged the government to step in.

"Our industries are shutting down. Please save these industries," he said.

Calling for a shift in tax policy, he added, "Increase direct taxes. Send officers to district and upazila levels – significant income tax can be collected from there. But we are pleading to save small industries."

Anwar-Ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, presented data showing slowed growth across sectors due to global conflicts, energy shortages and other pressures. He argued that instead of raising taxes, the focus should be on widening the tax net.

"Businesses are questioning what benefits they receive in return for paying taxes," he said, adding that many also report harassment during tax collection.

Allegations of harassment

Imran Hossain, secretary general of the Bangladesh Restaurant Owners' Association, alleged that bureaucratic complexities are turning businesses into "systematic thieves".

"Enforcement actions disproportionately target those who pay VAT and taxes, while non-compliant businesses often go unchecked," he said.

He proposed lowering VAT rates and introducing a unified tax system, adding that enforcement drives against VAT-compliant restaurants had intensified immediately after discussions with the NBR.

"Administrative pressure and field-level harassment have made it increasingly difficult to run businesses. On one hand, there is pressure of increased VAT, and on the other, irregular enforcement drives. If this continues, we will have no option but to shut down our businesses," he warned.

Expressing frustration over the lack of a level playing field, he said, "Yes, I admit it – we are forced into dishonesty because the system does not treat everyone equally. How do we get out of this? This bureaucratic structure will never allow it."

He also criticised both bureaucrats and politicians, alleging that officials fail to establish effective systems while in office, only to acknowledge problems after retirement.

Other business leaders echoed concerns, calling for lower VAT and tax rates, reduced harassment by field officials, and stronger governance in the banking and financial sectors. They warned that without reform, it would be difficult to build a stable economic foundation.

The FBCCI also proposed strengthening the central bank as an independent regulator to ensure discipline in the banking sector, and reducing government borrowing from banks to avoid crowding out private sector credit.

However, the finance minister at the event said, "The shortfall in the banking sector is not something this government can resolve easily."

Highlighting the impact on businesses, he acknowledged that "due to problems in the banking sector, businesses are unable to repay their liabilities."

He added that he had informed the International Monetary Fund that businesses are facing a serious capital shortfall. Explaining the reasons, he said, "Because of currency depreciation and inflation, there has been a 50% erosion of capital."

Equal incentives for emerging export sectors

The minister also pledged to extend incentives similar to those enjoyed by the ready-made garment (RMG) sector to other promising export industries.

Currently, the RMG sector benefits from duty-free import of raw materials and back-to-back letters of credit against export orders – measures widely credited with driving its growth. The sector accounts for around 85% of Bangladesh's total exports.

Addressing concerns about misuse, he said, "If 10 out of 100 people misuse facilities, does that mean the remaining 90 should be deprived? We will open up facilities for promising sectors."

He acknowledged allegations that businesses operating under bonded warehouse facilities face harassment from customs officials, adding that cooperation from the private sector would be needed to address the issue.

War costs and budget pressures

The minister said the current government has inherited significant liabilities, including outstanding payments of Tk40,000 crore in the power sector.

He added that the government had spent nearly $4 billion (around Tk48,000 crore) due to the Middle East conflict.

In light of these pressures, Bangladesh has requested a two-year cushion from the IMF to stabilise the economy. "We have told the IMF that we need a two-year cushion. From the third year, the economy will take off," he said.

Case for a larger budget

Responding to criticism from economists over the government's plan to maintain a large budget, the finance minister argued that increased spending is necessary to stimulate growth.

"To generate growth in a low-level economy, improve citizen services, create demand and reduce poverty, we must invest in the economy," he said, adding that development spending would need to increase.

He acknowledged concerns over misuse of funds, noting that large budgets become problematic if money is siphoned abroad. "But if spending is of quality and yields returns, then such investment is justified," he said.

Commerce Minister Khandakar Abdul Muktadir stressed the need to balance business interests with state revenue. "We must look at both business and the national exchequer," he said. "How will the economy progress if the tax-to-GDP ratio does not increase?"

Bangladesh’s business climate is constrained by regulatory bottlenecks, policy inconsistency, weak trust, and institutional inefficiencies, undermining both investment potential and long-term investor confidence, analysts and top business leaders said today.

They made the remark at a dialogue on the investment climate and the upcoming national budget, organised by the Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI), at its auditorium at Police Plaza in the capital.

At the event, M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said private investment has fallen, while foreign direct investment remains below 1 percent of GDP, far behind regional competitors.

“This slowdown comes at a critical juncture. With ambitions of reaching a $1 trillion economy and creating millions of jobs, the government’s targets hinge almost entirely on increased investment,” he said.

“The real challenge is not competition but market entry itself, as firms must be prepared for a decades-long commitment given operational hurdles—from licensing delays to compliance burdens—that can deter even established players,” said Zinnia Huq, chief financial officer of Unilever Bangladesh.

Bangladesh’s struggle to attract foreign direct investment (FDI) stems largely from a lack of trust and policy predictability, said Nuria Lopez, chairperson of the European Union Chamber of Commerce in Bangladesh.

She noted that despite the country’s strong potential, foreign investors remain hesitant due to an unfavourable business environment and the absence of a clear, consistent government vision.

“The root problem is that Bangladesh does not have the trust of investors,” she said, adding that policy inconsistency and regulatory uncertainty continue to undermine confidence.

Lopez pointed to growing concerns over Bangladesh’s future market access, particularly in the European Union, as the country approaches graduation from least developed country (LDC) status.

Unlike regional competitors such as Vietnam and India, Bangladesh has yet to secure effective free trade agreements, leaving investors unsure about long-term export prospects, she said.

Taxation is another major concern, she said, noting that compliant firms—especially multinationals—often bear a disproportionate burden, while others remain outside the tax net.

“This creates an uneven playing field and discourages new investment,” she added.

Barrister Margub Kabir of Margub Kabir and Associates emphasised that trust—central to any investment decision—rests heavily on how disputes are resolved.

“Bangladesh’s persistent weakness in contract enforcement, once ranked among the lowest globally, reflects a slow and overburdened judicial system,” he said.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said efforts to improve the business environment must begin with fixing core infrastructure.

Farooq Ahmed, secretary general of the MCCI; Sumitra Kumar Mutsuddi, head of corporate at BSRM; and Sumaiya T Ahmed, head of sustainability at Pran-RFL Group, also addressed the event, among others.

The government will provide all promising export sectors with the same facilities currently available to the readymade garment (RMG) industry, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday at a meeting with business leaders.

“If any promising export sector comes to us with a proposal, we will extend to that sector the same facilities that are available to the garment industry,” he said at the pre-budget meeting organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the revenue board at the Pan Pacific Sonargaon.

Bonded warehouse facilities, back-to-back arrangements, and all other relevant support will be provided, he added, citing the gold and diamond sectors as examples of industries held back by the absence of such support.

Goldsmiths, he noted, were leaving the country for a lack of opportunities.

Bonded warehouse facilities allow export-oriented industries to import raw materials duty-free, on the condition that finished goods are not sold domestically. Currently, only the RMG sector enjoys the facility in full; the leather goods sector receives it partially.

The National Board of Revenue (NBR) had long resisted broader extension, citing fears of duty-free materials being diverted to the local market, despite calls from economists to extend the facilities across the board.

The minister acknowledged those concerns but said they could not justify inaction. “It cannot be the case that we do nothing out of fear of theft,” he said, adding that preventing misuse is a separate issue, and solutions will be addressed accordingly.

On taxation, he said the government could not offer broad incentives at present but would work to lower the cost of doing business.

“Wherever you are facing obstacles, let us know, and we will remove them. Tell us where your costs are increasing, and we will directly address those issues within the next three months,” he told businessmen at the meeting.

This is already part of the ruling BNP’s manifesto, but businesses’ input will make it more effective, he noted, adding that while removing all obstacles might not be possible, the government will eliminate most of them. “Give us some time. If we fail, we will take responsibility.”

Stating that many have spoken about expanding the tax net, the minister requested business associations to assist in bringing those who are still outside the tax net into the system.

Painting a difficult economic picture, Khosru said the new government has inherited a damaged banking sector, weakened stock market and over Tk 40,000 crore in unpaid energy bills.

In addition, due to the ongoing conflict in the Middle East, the government is facing an additional energy cost of around $4 billion, he added.

“We are navigating through these challenges across all sectors, but the government does not have unlimited resources… It will take some time for the situation to improve,” the minister said, adding that the government and businesses need to work together to overcome this.

Noting that businesses are also experiencing a serious capital shortage, he said due to currency depreciation, many have seen about 40 percent of their capital wiped out. On top of this, a 13–14 percent inflation rate has further eroded value. “Altogether, nearly 50 percent of capital has been eroded.”

Describing the economy currently in a “low-level equilibrium”, Khosru said generating growth is necessary to move it upward and attract investment. “If poverty, which has risen significantly, is not reduced through higher expenditure, demand will not be generated.”

On the high borrowing costs, he said in the past, monetary supply was tightened to control inflation, but its effectiveness is uncertain.

With interest rates at 15 percent, he said the government would increase the development budget to stimulate growth, but cautioned that investment quality, not volume, was the priority. “If funds are misused or siphoned abroad in the name of mega projects, then a large budget serves no purpose.”

He projected a two-year adjustment period before the economy stabilises. “By the third year, the economy will turn around.”

Khandakar Abdul Muktadir, minister of commerce, industries, textiles and jute, said energy shortages and high borrowing costs had left many industrial sectors fragile, and that resolving those two issues was a prerequisite to new investment.

On reducing the cost of doing business, he said alongside providing targeted relief to the private sector, proposals will be made considering how to strengthen the national exchequer.

He also called for the jewellery sector to be brought fully into the formal economy, arguing that Bangladesh had a skilled workforce but lacked laboratories, design infrastructure, and supportive policy.

“If neighbouring countries can export several billion dollars’ worth of gold annually, why can’t we? We have the technical knowledge and skills. What we need are better laboratories, design facilities, and a supportive government policy,” he added.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry, said the effective tax rate for many businesses reached 40-50 percent when advance and source taxes were factored in.

He called for unconditional corporate tax reductions, relaxed cash transaction rules, an integrated taxpayer profile system, and online appeal hearings for income tax, VAT, and customs disputes.

The Investment Corporation of Bangladesh (ICB), which is mandated to invest in the capital market, is struggling itself to stay afloat amid an unprecedented financial crisis.

According to its audited financial statements for FY25, the state-owned non-bank financial institution incurred a record loss of Tk588 crore in the first nine months of the current fiscal year. This marks a 111% year-on-year surge in losses, driven largely by prolonged volatility in the capital market.

The report also shows that ICB's bank borrowing costs rose by more than 31%, with interest payments increasing significantly during the period, disclosed in the audited financial statements for FY25.

Investment Corporation of Bangladesh (ICB), the country's largest stock market investor, primarily earns through trading shares—generating capital gains from buying and selling equities, as well as dividend income from listed companies.

In addition, the corporation generates revenue through fees, commissions, and service charges by offering various financial services via its subsidiaries.

As of June 2025, ICB's consolidated investment in stocks stood at Tk13,508 crore at cost value. However, the market value of this portfolio declined to Tk8,256 crore, resulting in a deficit of Tk5,252 crore. This represents a loss of approximately 38.88% relative to the cost price, according to its data.

Officials attribute the decline in earnings to the prolonged volatility in the capital market over the past years. This instability was driven by political uncertainties surrounding the general election, adverse macroeconomic conditions, and continued bearish sentiment influenced by global factors, including tensions related to the US-Iran war situation.
ICB Chairman Professor Abu Ahmed told The Business Standard that the company's core operations are closely tied to the performance of the capital market, further noting that during the reporting period, the market did not perform well due to various factors, which hit the institution badly.

Capital gains—once generated from buying and selling shares—fell sharply as the institution was unable to offload stocks amid a bearish market trend. At the same time, ICB faced increased financial pressure due to higher interest payments on deposits and borrowings from banks and other institutions, which drove up overall borrowing costs, he said.

Previously, the interest rate on funds borrowed for market investments was around 7 percent, but it has now risen to 10 percent or more, significantly increasing expenses. As a result, the institution incurred substantial losses.

When asked about the way forward, the ICB chairman said a major portfolio overhaul is essential, as considerable value has already been eroded. Many shares were acquired at high prices, while their current market value has dropped sharply. In addition, high-cost borrowings must be repaid, potentially with government support.

"We are considering raising capital through the issuance of rights shares to repay borrowings. Once implemented, this plan will reduce liabilities and lower interest expenses, providing ICB with much-needed breathing space," he said.

"We are considering raising capital through a rights issue to repay borrowings. Once implemented, this plan will reduce liabilities and lower interest payments, providing ICB with some financial breathing room," he said.

Capital gains fell by 67%:

According to its quarterly financial statements, during the July–March period, ICB's capital gains fell by 67% as it was unable to sell shares due to a volatile capital market. Its capital gains stood at Tk67 crore at the end of March, significantly down from Tk201 crore.

Its dividend income, generated from payouts by listed companies, declined by 19% to Tk236 crore, compared to Tk294.84 crore during the same period of the previous fiscal year.

Income from fees, commissions, and service charges also declined significantly over the same period.

As its core income decreased while interest payments on deposits and borrowings increased, the company incurred an operational loss of Tk406.12 crore.

Interest payments surge by 31%:

Financial statements of the Investment Corporation of Bangladesh (ICB) show that it incurred Tk914.86 crore in interest expenses on deposits and borrowings during the first nine months of the current fiscal year.

In the same period of the previous fiscal year, the amount stood at Tk699 crore—marking a sharp increase of over 31%.

According to its financial disclosures, ICB's total deposits and borrowings reached Tk7,195 crore as of June 2025. Of this, Tk4,058 crore came from banks, Tk3,125 crore from other institutions, and the remainder from deposits collected from the general public.

Including deposits, borrowings, government loans, bonds, and other liabilities, ICB's total liabilities stood at Tk18,063 crore at the end of March.

Once a highly profitable state-owned investment bank, ICB reported a historic loss exceeding Tk1,000 crore for the first time in its history in FY25. The loss of Tk1,213.86 crore in fiscal year 2024–25 was driven by higher provisioning linked to poor investment decisions in several weak non-bank financial institutions (NBFIs), erosion of its investment portfolio amid a volatile capital market, and reliance on high-cost bank borrowings to finance market activities.

Although ICB had previously faced quarterly losses due to market volatility, such a significant annual loss is unprecedented, according to internal sources.

As a result of the substantial losses, the company did not declare any dividend for shareholders for FY2025.

Chattogram Port has recorded robust growth in cargo and container handling in the first nine months of the fiscal 2025-26, but operational bottlenecks, labour unrest and a decline in global ranking are raising concerns over its long-term competitiveness.

A comparative performance report for the first nine months of FY26 shows the port handled 104.29 million tonnes of cargo, marking a 7.39% year-on-year growth.

Container throughput also rose, reaching 2.57 million TEUs, up 4.75% from the same period a year earlier.

A report for the first nine months of the 2026-2027 fiscal year shows that the country's premier seaport handled 104.29 million tonnes of cargo, a 7.39% increase from the previous year. Container handling also grew to 2.57 million TEUs [Twenty-foot Equivalent Unit], up 4.75% from the same period.

Efficiency gains drive performance

Average vessel turnaround time has improved significantly, dropping from about eight days to 2.53 days, which allows the port to handle more ships.

In October 2025 alone, the port handled a record 391 vessels, a 16.02% increase year-on-year. Overall, vessel handling in the first nine months stood at 3,230 ships, up 5.62%.

CPA Secretary Refayet Hamim said, "Automation and digitalisation have been key. Systems like e-gate passes, terminal operations, digital billing, and the "CPA Sky" platform have reduced paperwork, yard congestion, and clearance time—sometimes to just 30 minutes."

"The implementation of pre-arrival processing has further streamlined customs clearance, enabling faster unloading and delivery of goods", he said.

He also said, "Another notable achievement has been the return to zero waiting time at the outer anchorage, allowing vessels to berth without delay – a development that significantly cuts logistics costs."

Khairul Alam Sujan, former vice president of the Bangladesh Freight Forwarders Association and a former director of the Bangladesh Shipping Agents Association, said there remains room for improvement.

He noted that narrowing the gap between the CPA and the Customs Authority would speed up services for users and improve overall port efficiency.

He also called for the swift, full rollout of automation and digitalisation systems.

Growth backed by economic recovery

The increase in cargo handling is mainly due to higher imports of fuel, wheat, and industrial raw materials. This has been supported by a more stable economy and fewer US dollar shortages than before.

In October 2025, cargo handling recorded a 21.11% increase, while container growth surged in August and September with gains of 20.10% and 10.22% respectively.

Even during the Eid-ul-Fitr vacation, the port continued its operations. In just one week in March this year, it handled 2.5 million tonnes of cargo and 55,000 TEUs, ensuring supply chains remained intact.

Structural limits still a concern

Despite the growth, port users say ageing infrastructure and equipment shortages are limiting its full potential.

The New Mooring Container Terminal, the port's busiest facility, saw a 12-14% increase in efficiency after being handed over to Chittagong Dry Dock Limited in July 2025.

However, disputes over leasing out the terminal to a foreign operator triggered labour unrest, disrupting operations and raising concerns among stakeholders.

Bangladesh Garment Manufacturers and Exporters Association Director SM Abu Tayub said consistent service is essential for any port, warning that even minor disruptions create difficulties for users.

He added that the CPA must ensure uninterrupted, reliable services at all times.

Ranking slip rings alarm bells

The port dropped one position to 68th in the global Lloyd's List ranking, which analysts see as a warning sign.

A recent decision to raise tariffs has raised concerns, with questions about whether higher costs could hurt the port's competitiveness.

Rakibul Alam Chowdhury, a former vice president of BGMEA, said the tariff hike has raised the cost of doing business and eroded competitiveness, warning that it could affect future business volumes and reduce the port's cargo handling.

Investment key to future growth

Port users say sustained foreign investment, modern technology adoption and a stable labour environment will be critical for regaining global standing.

They also stress that modernising the port is essential not just for attracting foreign investors, but also for encouraging domestic investment in trade and industry.

Amirul Houque, a former director of the Chittagong Chamber of Commerce and Industry and managing director of Seacom Group, said investment is crucial for port development, but it must be rational and well justified.

He also stressed the need to improve the skills of port workers to boost efficiency.

Apex Footwear PLC, the country's leading footwear manufacturer and exporter, reported a staggering turnover of Tk616 crore during the January-March quarter of the 2025-26 fiscal year, yet managed to retain only Tk1.06 crore as net profit.

This disparity reflects a razor-thin profit margin of just 0.17%, a figure that trails significantly behind industry peers such as Bata Shoe.

The company's latest unaudited financial statement reveals that despite a 14% growth in revenue compared to the same period last year, the bottom line was heavily weighed down by a combination of surging finance costs, higher tax burdens, and rising operational expenses.

During the third quarter, spanning January to March 2026, Apex Footwear's revenue climbed to Tk615.96 crore from Tk540 crore in the corresponding period of the previous year. While the net profit saw a modest 9% year-on-year increase, it reached only Tk1.06 crore, yielding an earnings per share of Tk0.54.

The financial data indicates that the cost of doing business has escalated sharply, with the cost of goods sold rising by 10% to Tk488 crore.

Furthermore, marketing, selling, and distribution expenses grew to Tk93.37 crore, while finance costs – primarily driven by rising interest rates on loans – jumped by 16% to reach Tk16.99 crore.

On a broader scale, the company's performance for the first nine months of the current fiscal year (July-March) showed a similar trend of high volume but constrained profitability. Cumulative revenue for the nine-month period reached Tk1,559 crore, up from Tk1,369 crore in the previous year.

Cumulative net profit for the period stood at Tk8.91 crore, compared with Tk6.99 crore in the same period of the previous financial year, indicating improved earnings but continued pressure on margins.

Despite the thin margins, the company maintained a strong financial position, with a net asset value per share of Tk351.89 and net operating cash flow per share of Tk122.92 as of March 2026.

The significant squeeze on profit margins has been attributed largely to the current taxation framework governing export proceeds.

A senior official of the company said the sharp decline in margins has been worsened by the nature of tax deduction at source (TDS).

He noted that in the export business, banks deduct tax at the source immediately upon the receipt of export proceeds. "Because these deductions are not strictly tied to the export revenue of a specific accounting period, the tax cost often appears disproportionately high relative to the quarterly profit."

Industry insiders further elaborated that footwear exporters are required to pay 1% of their total export value as TDS. Although this amount can be adjusted against final income tax at the end of the year, it is not refundable.

This creates a systemic hurdle for companies operating on low margins; if the final calculated tax on income is lower than the amount already deducted as TDS, the company cannot claim a refund, effectively turning the deduction into a final tax that erodes the actual profit.

Following the disclosure of these financial results, investor sentiment on the Dhaka Stock Exchange remained cautious. Shares of Apex Footwear closed 0.83% lower at Tk202.60 today.

Based on the latest quarterly data, the company's price-to-earnings ratio stands at 33.47, while its dividend yield is 1.23%.

Private investors aiming to launch Bangladesh's first privately funded submarine cable face mounting delays from inter-ministerial red tape, despite sinking $53 million (equivalent to Tk650 crore) into preparatory work.

The Bangladesh Private Cable System consortium – Summit Communications, CdNet Communications, and Metacore Subcom Ltd – awaits critical no-objection clearances from the foreign affairs and home affairs ministries, and the National Security Intelligence.

This bottleneck halts cable-laying vessels from entering Bangladesh's territorial waters.

The project links to the UMO Cable System's 2,227-km main route from Singapore to Myanmar, plus a 1,300-km branch to Cox's Bazar.

Without April approvals, investors risk missing the 31 August 2026 rollout deadline, pushing implementation back a full year due to the Bay of Bengal's narrow November-to-mid-May laying window.

In a letter sent on 31 March to the foreign affairs ministry, the consortium sought no-objection clearance for Panama- and Indonesia-flagged vessels to enter Bangladesh's territorial waters to lay the cable.

However, officials say procedural gaps between ministries have stalled progress.

A foreign ministry official, speaking on condition of anonymity, told The Business Standard that the consortium had been asked to obtain authorisation from the posts, telecommunications and information technology ministry, adding that no such communication had yet been received.

"According to protocol, one ministry cannot act on a letter issued by an agency under another ministry," the official said.

Posts, Telecommunications and Information Technology Secretary Bilquis Jahan Rimi said the ministry has not received any letter on this matter. "A decision will be announced once the letter is received."

However, official documents show that the consortium had written to the ministry in September last year seeking inter-ministerial support.

Project status

The consortium has already reached all critical technical milestones.

These include a comprehensive feasibility study, a detailed subsea route survey, the demarcation of the route from Myanmar's Exclusive Economic Zone to Cox's Bazar, and the activation of the Singapore-Myanmar segment.

The project is currently in the "shovel-ready" phase, with construction of the landing station and beach manhole progressing at full pace.

Furthermore, specialised cable-laying vessels and a team of international experts have been contracted and are awaiting final approval to proceed.

Looming deadlines

The project faces a critical "roll-out obligation" to be completed by 31 August 2026. However, technical experts note that seabed installations in the Bay of Bengal are only feasible between November and mid-May.

If the April window is missed due to the upcoming monsoon and lack of approvals, the project is feared to be delayed by at least another year, leading to massive financial demurrages.

"We have already invested nearly 50% of the total project cost," said Md Arif Al Islam, managing director of Summit Communications.

"We are stuck in a complex situation. If the government did not want private submarine cables, why were we encouraged to spend millions on infrastructure and licences?"

The consortium has already spent $53 million on licensing, VAT and other expenses. Of the amount, it has paid $43.76 million to the cable owner, Compana Pvt Ltd, for the UMO trunk cable, which includes $36 million in IRU fees and $7.96 million in maintenance charges.

Market monopoly vs competition

Currently, the state-owned Bangladesh Submarine Cables PLC controls the majority of the market through two cables, SE-ME-WE-4 and SE-ME-WE-5, with a combined capacity of 7,220 Gbps. A third state-owned cable, SE-ME-WE-6, is expected to launch next year with a massive capacity of over 40,000 Gbps at a cost of Tk1,000 crore.

Bangladesh Submarine Cables has expressed concerns that private entry will create "extreme instability" and reduce the revenue of the state-owned listed company. In a recent internal report, the company suggested that the government should set a minimum threshold to ensure state-owned cable usage does not fall below 50%.

An official from Bangladesh Submarine Cables noted that as a listed company, the government must consider the interests of its shareholders when making strategic decisions.

Entrepreneurs in the IT sector have pointed out that the provision of internet services via submarine cables is currently a monopoly held by the state-owned company. In this context, the approval of private submarine cables was a significant milestone towards increasing private sector participation, they say.

Industry stakeholders maintain a consensus that increasing private sector participation will foster a more competitive market, ultimately driving down internet costs for the public.

They argue that making connectivity more affordable will enable the inclusion of a larger segment of the population, thereby significantly boosting the country's per-capita internet consumption.

Internet penetration scenario

According to a report by the Asian Development Bank published in December last year, Bangladesh's current internet penetration stands at 53%, remaining behind regional countries like Bhutan at 88% and 85% in the Maldives; both countries show high access.

The report said Bangladesh's digital infrastructure is expanding but faces connectivity, capacity, and rural access gaps. International connectivity relies on two undersea cables, both following similar routes, creating risks, it pointed out.

The government has approved five proposals for $1.9 billion in loans from development partners of which $1.6 billion is non-concessional.

Of the amount, $1.3 billion will be set aside as budget support to help tackle urgent financial pressures, according to finance ministry officials.

The approval for loans under relatively tough terms were granted yesterday (28 April) at a meeting of the Standing Committee on Non-concessional Loan chaired by Finance and Planning Minister Amir Khosru Mahmud Chowdhury at the Planning Ministry in Sher-e-Bangla Nagar.

Sources present at the meeting said the budget support package includes $450 million from the Asian Development Bank (ADB), $500 million from Japan International Cooperation Agency (Jica), $250 million from the Asian Infrastructure Investment Bank (AIIB), and $100 million from the OPEC Fund for International Development (OFID).

Officials said these loans come with higher interest rates, shorter grace periods and faster repayment schedules than concessional financing.

Under the programme titled Strengthening Economic Management and Governance, Subprogram 2, ADB will provide a total of $750 million, consisting of $300 million in concessional financing and $450 million through its regular Ordinary Capital Resources (OCR) window.

The concessional portion carries a 2% interest rate, a repayment period of 25 years, and a five-year grace period.

The $450 million OCR loan is classified as non-concessional and carries an interest rate of SOFR plus 0.50%, which based on the 20 April 2026 SOFR rate of 3.63%, brings the effective rate to 4.13%.

It also includes a 0.15% commitment charge on undrawn balances.

This ADB OCR loan has a 15-year tenure, including a three-year grace period. According to ERD analysis, the loan's grant element is 6.61%, making it highly non-concessional.

Negotiations with ADB were completed on 15 April 2026, and the package is now awaiting board approval.

The government is also seeking $500 million from JICA to help manage immediate fiscal challenges. The proposed loan carries an indicative interest rate of 3.05%, a 30-year repayment period, and a 10-year grace period.

Officials said the Japanese financing would be used in line with IMF recommendations, including expanding social protection spending, strengthening revenue administration, and improving macroeconomic stability.

AIIB is set to provide $250 million as co-financing alongside ADB. The proposed loan carries an interest rate of SOFR plus 1.45%, which based on the same benchmark rate would bring the effective cost to around 5.08%.

It has a 35-year maturity, a five-year grace period, and a 0.25% front-end fee. ERD analysis found the grant element to be negative 0.68%, meaning it is considered extremely hard borrowing.

The government is also pursuing $100 million equivalent from OPEC Fund for International Development, denominated at approximately €85.3 million. Indicative terms include an interest rate of six-month EURIBOR plus 1.20%, giving an effective rate of about 3.616%.

The loan has an 18-year maturity, a three-year grace period, and a 0.25% commitment fee. Its grant element is estimated at 11.38%, also placing it in the non-concessional category.

Beyond budget support, the committee also approved a separate $300 million ADB loan for the SASEC Dhaka-Sylhet Corridor Road Investment (Tranche-2) project.

The project will upgrade around 210 kilometres of highway from Dhaka (Kanchpur) to Sylhet into a four-lane corridor, with separate service lanes for slow-moving vehicles.

The goal is to better connect the Dhaka-Sylhet route with regional transport networks including the Asian Highway, SASEC (South Asia Subregional Economic Cooperation) and BIMSTEC corridors.

The total project cost is estimated at Tk16918.58 crore, of which the government will provide Tk3,674 crore, while ADB will finance Tk13,244.68 crore.

The road loan will come from ADB's OCR window at an effective rate of around 4.23%, with a 25-year repayment period and a five-year grace period.

Officials said the Standing Committee on Non-concessional Loan also adopted several policy measures to improve management of costly foreign borrowing.

Non-concessional loans will be approved only where concessional financing is unavailable or impractical. Borrowers receiving government or central bank guarantees must demonstrate repayment capacity from their own income.

Loans with excessive conditions or mandatory down payments will be discouraged.

The committee also decided that annual debt servicing on non-concessional external loans must remain below the lower of 10% of export earnings or 15% of government revenue, while total non-concessional external debt stock must remain below 10% of GDP.

ERD officials said these measures are expected to improve transparency, reduce risks and strengthen long-term sustainability in Bangladesh's external debt management.