Despite signing a $3.7 billion aircraft purchase agreement and agreeing to buy higher-priced American wheat as part of its commitments under the US Agreement on Reciprocal Trade, Bangladesh has so far gained little except fresh tariffs imposed unilaterally by Washington, raising questions about the deal's effectiveness.

Bangladesh now faces an additional 10% tariff over alleged forced labour, effective 24 July, while a separate US investigation into alleged excess production could expose the country to further duties.

Meanwhile, a key benefit promised under the trade deal — zero reciprocal tariff on apparel made with American cotton — remains elusive, leaving Bangladesh's exporters uncertain about any gain from it.

Bangladesh made all the concessions, while the US imposed only tariffs – that is how economists assess the trade deal after Washington slapped fresh tariffs on Bangladesh.

Rather than accepting economic losses as the cost of global power politics, they argue Dhaka should immediately begin negotiations with the US to revise or even scrap the deal.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), told TBS that the trade agreement with the US was "fundamentally unfair and unreasonable".

"The US has imposed almost identical tariff rates on around 60 countries, including Bangladesh. That means Bangladesh gained no real advantage from signing the agreement. Instead, it has committed to importing various US products at higher prices," he said.

Professor MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), described the agreement as "extremely unfair" and "completely unequal".

"This can hardly be called a trade agreement. Normally, both sides make concessions. Here, Bangladesh made all the concessions but received nothing in return," he said.

Garments made of US cotton free from 10% tariff

Officials said the Office of the US Trade Representative (USTR) has informed Bangladesh that garments made with US cotton will face only the existing 15% tariff from September - the new 10% duty will not apply in this regard.

However, the facility will be available for only three years, with the US retaining the authority to determine the eligibility and the maximum export volume.

Cambodia, Indonesia, and Malaysia have been offered the same arrangement. However, after a US court struck down the reciprocal tariff regime, Malaysia cancelled the trade agreement it had signed with Washington in March.

Trade analysts are sceptical that Bangladesh will be able to take meaningful advantage of the scheme. They say the US is likely to impose conditions so restrictive that Bangladeshi exporters may struggle to qualify for the duty-free facility.

After the interim administration signed the trade agreement just two days before February's election, policymakers hailed the arrangement as a major achievement.

Bangladesh is the world's largest importer of US cotton, buying nearly $4 billion worth annually. In July-April of FY26, the country exported goods worth $7.36 billion to the US.

After a US court invalidated the reciprocal tariff regime, the Trump administration imposed a temporary 10% tariff for six months under separate legislation.

As that expired on Friday, another 10% tariff imposed under Section 301 of the Trade Act of 1974 over alleged forced labour came into effect.

Among the 60 affected countries, Bangladesh, India, Malaysia, and 14 others face a 10% tariff, while China, Vietnam and 36 other countries face 12.5%. The remaining countries are subject to tariffs ranging between 10% and 12.5%.

The foreign ministry has described Bangladesh's slightly lower tariff rate than China and several other competitors as a positive outcome.

'Deal should be revised or cancelled'

Economists said Bangladesh is bound by its commitments to purchase US products under the agreement, even if doing so results in financial losses. Instead of accepting those costs, they argue, Dhaka should immediately begin negotiations to revise or terminate the deal.

CPD's Mustafizur Rahman said that if the trade agreement is fully implemented, Bangladesh could face an additional 19% tariff.

"If other countries continue to face tariffs of 10-12%, while Bangladesh is subjected to an extra 19% under the agreement, it will lose its competitive edge. The government should therefore begin negotiations with the US to terminate the agreement," he said.

He added that several studies estimate the 10% tariff alone would increase costs for US buyers by around $100 billion a year, eroding their purchasing power and likely reducing imports from Bangladesh and other exporting countries.

MA Razzaque said the agreement's only apparent benefit for Bangladesh was the promise of duty-free access for garments made with US cotton, but even that remained uncertain.

"The agreement merely states that the US will determine the mechanism for granting the facility. I do not believe Bangladesh will be able to benefit from it," he said.

"The US no longer adheres to trade agreements or international trade rules. It uses its economic power to impose obligations on other countries. As a result, Bangladesh will still have to honour its purchase commitments even if it receives no meaningful concessions from Washington, despite the economic cost," Razzaque added.

Costly commitments

Although Bangladesh has yet to ratify the agreement, it has already begun implementing key commitments, importing energy, consumer goods and other products from the US and US companies at higher prices.

On 1 July, the government approved the import of 2.2 lakh tonnes of US wheat under a government-to-government arrangement at $322 per tonne.

On the same day, it also approved the import of 50,000 tonnes through an international tender at $297.92 per tonne, meaning the government agreed to pay about $24 more per tonne for US wheat.

Following the signing of the trade agreement in February, Dhaka also agreed to purchase 14 Boeing aircraft worth around Tk45,000 crore. The government and private sector have also increased purchases of US LNG, sugar, soybeans, cotton and other commodities.

The interim administration also amended the Public Procurement Act and Public Procurement Rules to make it easier for US companies to participate in public tenders.

Fears over fresh tariffs

Trade experts say the Trump administration launched investigations into 60 countries, including Bangladesh, over alleged forced labour but has never disclosed any evidence supporting the allegations. They argue the tariffs were imposed unilaterally.

They fear the ongoing USTR investigation into Bangladesh's alleged excess production capacity could follow the same pattern and result in additional tariffs.

Experts note that every country investigated under Section 301 over alleged forced labour ultimately faced tariffs, suggesting the outcome had been predetermined.

Mohammad Hafizur Rahman, former director general of the WTO Cell at the commerce ministry, rejected the allegation that Bangladesh has excess production capacity.

"Garments are Bangladesh's principal export, yet almost all raw materials are imported. There is no basis for claiming Bangladesh has excess production capacity," he said.

He said Bangladesh's only real advantage is its low-cost labour. "Employing a large workforce in the garment sector at relatively low wages does not constitute excess capacity; rather, it reflects the economic realities of Bangladesh."

He argued that such allegations would only be credible if Bangladesh were producing goods on a scale unmatched by competitors such as India, China or Myanmar.

Exporters remain unconvinced

BGMEA President Mahmud Hasan Khan said Bangladeshi exporters have yet to receive duty-free access for garments made with US cotton, despite the commitments made under the agreement.

"USTR has informed us that the facility will become effective from September. The US will also determine the eligibility conditions and export volume. The concession will be available for three years," he said.

Fazlee Shamim Ehsan, senior vice-president of BKMEA, said there was little sign that Bangladesh would receive meaningful benefits from Washington.

"The agreement signed during the Yunus administration remains ambiguous. It does not specify what percentage of US cotton must be used in a garment to qualify for duty-free treatment. Ultimately, the extent of the benefit will depend entirely on decisions taken by the Trump administration," he said.

A delegation of Bangladesh Capital Market Investors Association (BCIA) met Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan at the commission’s office on Sunday and placed an 11-point recommendation aimed at stabilising the capital market and restoring the confidence of local and foreign investors.

Handing over a letter to the BSEC Chairman, BCIA President Kazi Mohammad Nazrul said the country’s capital market has been passing through an acute crisis due to what he said 15 years of plunder and mismanagement under the previous Awami League government along the incompetence of the Khondoker Rashed Maqsood-led commission formed during the interim government’s tenure, reports UNB.

He expressed confidence that under Masud Khan’s leadership, the newly constituted commission would be able to steer the market towards stability and open a new chapter for the economy.

On the draft margin rules recently published by the commission, the BCIA said the proposed framework creates disparity in the distribution of loans against different shares, and demanded that the margin loan amount be made uniform across all listed securities.

The association also called for listing state-owned enterprises and multinational companies on the bourses within the next three months, with 80 percent of IPO shares reserved for general investors, application amounts capped at Tk 5,000, and the lottery-based allotment system reinstated.

Referring to Dhaka Stock Exchange’s recent move placing 62 companies under its “red zone” and issuing cautionary notices to investors, the BCIA said that before any of these companies are delisted, they should first be given two years to restructure.

It further recommended that directors of such companies be required to buy back all shares held by general investors at either the market price or the issue price, whichever is higher, before delisting proceeds.

The association pointed out that unlike most global bourses which are institution-driven, Bangladesh’s market is dominated by retail investors, who account for roughly 80 percent of participation.

It therefore urged that investor representatives be given a greater say in market governance, with coordination meetings between the commission and general investors’ representatives held four times a year.

Among other demands, the BCIA sought the introduction of a real-time monitoring system to instantly detect abnormal transactions and manipulative trading, along with punitive action against offenders.

It also proposed a special Tk 10,000 crore fund at 3 percent interest to boost market liquidity, to be channelled through ICB and various brokerage houses so that general investors can access loans at 5 percent interest for investment.

The association further demanded that mutual funds, described as the “lifeblood” of the market, be made to remain active, with each fund required to invest at least 80 percent of its assets in the market. Rather than extending the tenure of closed-end funds, it recommended converting them into open-end funds.

On corporate governance, the BCIA said listed companies frequently resort to irregularities and malpractice in their financial reporting, and called for implementation of the Financial Reporting Act, 2015 to ensure a transparent and accountable market.

It also pressed for the long-pending buy-back law to finally be enforced, noting that successive governments and commissions had promised but failed to implement it.

The association additionally proposed scrapping the existing categorisation of listed companies into A, B, N and Z categories, arguing that the classification creates unfair distinctions among shares.

Instead, it suggested introducing a rating-based system, such as A1, A2, A3 and A4, to help investors gauge the relative strength of companies.

BCIA said most investors in Bangladesh’s capital market lack adequate knowledge about the market and often fall victim to misinformation and rumours, resulting in financial losses.

It called for arrangements to introduce internationally recognised certification for financial advisers to guide general investors.

“We hope the chairman will look favourably on implementing our 11-point recommendations to build a developed and prosperous capital market,” the BCIA president said.

Walton Hi-Tech Industries PLC, one of Bangladesh’s leading electrical and electronics manufacturers, has signed a global distributorship agreement with Libya-based ASR Al Techniyah to expand its presence in North Africa.

Under the three-year agreement, ASR Al Techniyah, a private company registered in Tripoli, will serve as Walton’s authorised distributor, overseeing the sales, marketing and distribution of Walton products across Libya.

According to a company disclosure filed with the Dhaka Stock Exchange (DSE), the partnership aims to introduce Walton’s range of home appliances and electronics to Libyan consumers under mutually agreed terms.

The agreement marks another step in Walton’s strategy to strengthen its international presence by taking “Made in Bangladesh” technology to new markets.

Under the deal, ASR Al Techniyah will market and sell Walton-branded products, including refrigerators, televisions, air conditioners and washing machines.

Abdur Rouf, head of Walton Global Business Division, said the company’s innovative technology, modern designs, product quality, durability, energy efficiency, eco-friendly features and competitive pricing have helped it stay ahead of rivals in overseas markets.

He said the brand has gained consumers’ trust in many countries, with its presence now spanning 55 markets, including Libya.

Rouf added that Walton has already exported two shipments of refrigerators, air conditioners, televisions and washing machines to Libya this year. The company expects the expansion to support its entry into other North African markets.

Walton’s share price rose 0.16 percent on the DSE yesterday.

In fiscal year 2024-25, the company posted revenue of Tk 7,082 crore, down from Tk 7,512 crore a year earlier. Profit after tax also fell to Tk 1,036 crore from Tk 1,356 crore.

Bangladesh has set an ambitious export goal for the current fiscal year, targeting a 15% jump in earnings to $63.4 billion despite factories operating well below capacity for months amid a persistent shortage of orders.

The challenge is clear, considering exports shrank 0.58% in the last fiscal year.

Economists and exporters say meeting the target will require far more than a rebound in global demand. Manufacturers continue to struggle with gas shortages, double-digit borrowing costs, weak investment and US tariffs, while sluggish consumer spending in major Western markets and geopolitical tensions continue to cloud the global trade outlook.

Commerce Minister Khandaker Abdul Muqtadir today (26 July) announced the export target for 2026-27 fiscal year at a press conference at the ministry.

The government aims to earn $63.4 billion from exports–- $55.2 billion from merchandise shipments and $8.2 billion from services. The target represents a 15% increase over the actual export earnings recorded in FY26.

Of the merchandise export target, the government expects the ready-made garment sector to earn $44.5 billion, up from the $38.7 billion earned in previous fiscal.

For FY26, the government had targeted $63.5 billion in total exports, including $55 billion from goods and $8.5 billion from services. However, the target was missed.

Merchandise exports fell 0.58% year-on-year to $48 billion, while services exports stood at $7 billion. The services figure will be finalised in two to three months, Muqtadir said.

As a result, the overall export target for FY27 is effectively lower than the previous year's target, despite being higher than last year's actual export earnings.

'Realistic opportunity to recover'

At the press conference, Muqtadir, on the feasibility of achieving the export growth target, said business confidence had improved following the restoration of policy certainty.

He added that clarity over Bangladesh's LDC graduation and the country's market access during the transition period, together with ongoing trade negotiations, should support export growth despite domestic challenges, including the energy shortage.

He mentioned that the government had launched initiatives to accelerate exports by improving the business environment, facilitating investment and simplifying public service delivery, which he expected would produce tangible results in the near term.

He said negotiations on free trade agreements (FTA) with South Korea and the UAE are in final stages. The government aims to conclude FTAs with several other countries within this year and expects to begin formal negotiations with the European Union on an FTA shortly.

Asked when the Economic Partnership Agreement (EPA) with Japan would take effect, he said the deal would be tabled at the next session of parliament for ratification.

Regarding the trade deal with the US, Muqtadir said only the tariff's name had changed, not its rate, and it would not pose an additional obstacle to exports.

On export diversification, he said to reduce reliance on the ready-made garment sector, the government is prioritising leather, footwear, shipbuilding, ship recycling, light engineering and information technology, with sector-specific action plans to be rolled out soon.

"We want garment exports to reach $80 billion, while other sectors together contribute another $100 billion," he said.

The minister acknowledged that domestic gas production had reached its limit and Bangladesh was already importing 900 million cubic feet of liquefied natural gas a day.

With only two FSRUs in operation, the country cannot increase imports further, making any near-term improvement in energy supplies unlikely. He said the government plans to install two more FSRUs and is treating the issue as a priority.

Muqtadir said the gas shortage has left 30% of the country's installed industrial capacity idle. "While there is no quick fix, the government is working to address the problem."

'May not reach 15%, but could come close'

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the government targeted 9% export growth in FY26 over the previous year's actual earnings, but merchandise exports ultimately contracted.

He cited the US' 10% new tariff, LDC graduation uncertainty and global headwinds, alongside high business and borrowing costs at home, as major obstacles to export growth. "Given these domestic and global conditions, a 15% export growth target is highly ambitious."

However, the economist said stronger export growth remains achievable if the government effectively implemented the positive measures announced in the budget, including the national single window, faster port clearance, and reliable gas supplies.

"It may not reach 15%, but it could come close," he added.

Shehab Udduza Chowdhury, vice-president of BGMEA, said the government has announced some positive policies, but implementation remains weak.

"Overall, the challenges are mounting, making the target unrealistic," he said.

For instance, he said India's FTA with the European Union will allow its exports to enter the bloc duty-free within the next five to six months, creating a fresh challenge for Bangladesh.

He warned that renewed tensions in the Middle East could trigger another energy shock, while gas shortages at home had already intensified.

Shehab further said manufacturers were being squeezed by rising production costs while weak demand prevented them from raising export prices.

"If the government can at least resolve domestic bottlenecks, particularly the gas crisis, exporters may be able to achieve modest positive growth," he said.

Md Fazlul Hoque, managing director of Plummy Fashions and former president of the BKMEA, shared a similar view, saying that there is little indication that global apparel demand will rebound sharply anytime soon

"At the same time, high borrowing costs, gas shortages and a weakened banking sector are making financing more difficult and driving up production costs. Bangladesh also lags competitors in productivity," he told TBS.

He added that uncertainty over global energy prices persists despite the easing of recent conflicts. "The government's target does not reflect the realities facing exporters."

Bangladesh is seeking to deepen economic ties with China as part of a broader strategy to accelerate industrialisation, modernise infrastructure and reduce vulnerability to global economic shocks, Finance Adviser Dr Rashed Al Mahmud Titumir said on Sunday, outlining what he described as a pragmatic, interest-driven approach to foreign policy under the country's new government.

Speaking at a seminar titled "Bangladesh-China Relations: Enhanced Trust and New Direction", Titumir said the relationship with Beijing would be guided by Bangladesh's national priorities rather than geopolitical alignments, as Dhaka pursues an ambitious target of becoming a US$1.0 trillion economy by 2034.

"China occupies a place of special importance," he said. "Our foreign policy is primarily driven by our social, economic and political factors. Our task now is to translate our shared vision into tangible outcomes that benefit the peoples of both countries."

South Asia Institute of Policy and Governance (SIPG) of the North South University organised the seminar.

His remarks reflect Bangladesh's efforts to position itself amid intensifying strategic competition between China, the United States and India, while maintaining a foreign policy centred on economic development. The government has repeatedly described its approach as "Bangladesh First", emphasising national interest over bloc politics.

Titumir said Bangladesh's newly approved five-year strategic framework for reform and development closely complements China's forthcoming 15th Five-Year Plan, creating opportunities for cooperation in industrial development, infrastructure and investment.

Rather than pursuing growth through consumption-led investment, Bangladesh is prioritising production-oriented foreign investment, he said, arguing that Chinese expertise in manufacturing and industrial upgrading makes Beijing a natural partner for the country's economic transformation.

"We are looking for investment for industrialisation," he said. "China has followed that particular form of economic modernisation."

He said the government had inherited an economy and public institutions weakened by years of mismanagement and was pursuing a phased strategy of recovery, restoration and reconstruction before accelerating growth.

The finance adviser also linked the government's economic philosophy to the Bangladesh Nationalist Party's historical development policies, crediting former Prime Minister Begum Khaleda Zia with overseeing one of the country's fastest periods of poverty reduction and describing the economic vision of late President Ziaur Rahman as rooted in indigenous solutions rather than externally prescribed austerity.

Without naming previous governments directly, Titumir said Bangladesh's development strategy would reflect its own historical experience rather than copy any foreign economic model.

Infrastructure emerged as a central theme of his address. Bangladesh is seeking Chinese participation in rail modernisation, expressways, port expansion and multimodal logistics networks, including implementation of the framework agreement on Mongla Port modernisation signed during Prime Minister Tarique Rahman's recent visit to China.

He also welcomed President Xi Jinping's proposal for a transport corridor linking Kunming and Chattogram and reiterated Bangladesh's interest in discussions on the China-Bangladesh-Myanmar Economic Corridor, saying improved regional connectivity would stimulate trade, investment and tourism.

The government is encouraging Chinese companies to relocate manufacturing operations to Bangladesh and integrate the country into regional and global value chains, while also attracting investment from a broader range of international partners.

"We do not believe in exclusive relationships; we believe in inclusive relationships," Titumir said.

Trade remains heavily skewed towards China, however. Bilateral trade has reached nearly US$24bn annually, while Bangladesh's exports remain below US$1bn.

Titumir said narrowing that imbalance had become a priority and urged greater utilisation of China's duty-free and quota-free market access. Bangladesh hopes to expand exports of garments, jute products, leather goods, pharmaceuticals, agricultural products and processed foods.

He welcomed recent Chinese approval for import of Bangladeshi guava and jackfruit and called for similar access for additional products.

The finance adviser also identified water management as another priority area for bilateral cooperation, highlighting Bangladesh's interest in Chinese expertise on flood control, river management, hydrological forecasting and irrigation.

He described the Teesta River Comprehensive Management and Restoration Project as one of Bangladesh's most important development priorities and expressed hope for continued Chinese technical and financial support.

Beyond economics, Titumir called for closer cooperation in renewable energy, healthcare, digital infrastructure, education and cultural exchanges to broaden public engagement between the two countries.

On regional diplomacy, he thanked China for its role in supporting efforts to resolve the Rohingya refugee crisis and urged Beijing to continue facilitating conditions for the refugees' safe and sustainable return to Myanmar.

He also expressed Bangladesh's support for revitalising the South Asian Association for Regional Cooperation (SAARC), while seeking Chinese backing for Dhaka's aspirations to join groupings including BRICS, the Shanghai Cooperation Organisation and the Regional Comprehensive Economic Partnership.

The speech signals that Bangladesh intends to deepen engagement with China while simultaneously pursuing diversified international partnerships - an approach the government argues will strengthen economic resilience in an increasingly fragmented global economy.Stock Market Data

Dr Liu Zongyi, director of the South Asia Studies of the Shanghai Institute for International Studies, said "Not long ago, Bangladesh Prime Minister Tarique Rahman hit a successful visit to China.When President Xi Jinping met with Prime Minister Tarique Rahman, the two sides announced the building of a China Bangladeshi community with a shared future in the new era, opening a new chapter for bilateral relations". He noted that this high-level visit helped bilateral relations achieve stronger political mutual trust, a deeper practical cooperation, and more effective international coordination.

"Our two countries aim to realize organization together. We are driven by shared development. We take shared governance as our responsibility and connected each other through exchanges between civilizations. We work hands in hand for a shared future".

He noted that present Bangladesh-China partnership goes beyond its ordinary bilateral friendship.

Foreign Secretary Asad Al Siam said during his bilateral meeting with Bangladesh PM Tarique Rahman, Chinese President Xi assured that China would stand beside Bangladesh regardless of changes in the international environment which conveys a message of confidence in the bilateral partnership at a time of increasing global uncertainty.

According to the foreign secretary, the visit has set a high benchmark. "The agreements are ambitious. The political understanding has been refreshed. The economic opportunities are substantial. Our task now is to translate these achievements into tangible outcomes for the people. Together with our colleagues, both in public and private sector, we are ready to do so".

Moderated by Professor Sheikh Tawfique M Haque, Director, South Asia Institute of Policy and Governance (SIPG) of the North South University, the seminar was also addressed by Benazir Ahmed, a member of the Board of Trustees of the university.

Foodpanda Bangladesh’s losses rose 40 percent to €11.76 million last year, extending a losing streak that now stretches back a full decade, according to parent company Delivery Hero’s annual financial statements.

The Bangladesh operations of the German company comprise four entities: the core food delivery business; the quick-commerce arm Pandamart; cloud kitchen unit DH Kitchens; and a holding company, Jade 1343 GmbH & Co Vierte Verwaltungs KG.

Together they have lost €110.66 million since 2016 and have yet to turn a profit in any year, the statements show.

Food delivery accounts for the largest share of that total, with cumulative losses of €79.22 million. Its losses widened 65 percent last year to €7.14 million, accounting for over 60 percent of the group’s total loss.

Among the other entities, Pandamart logged a loss of €2.27 million last year, reaching a total of €20.27 million since its launch in 2020. DH Kitchens narrowed its losses by 15 percent to €0.34 million, with €2.28 million lost since 2020. Jade 1343 lost €2.01 million last year, taking its cumulative losses since 2021 to €8.89 million.

THE UBER DEAL

Foodpanda has yet to turn a profit in Bangladesh since entering the market in 2013. Its decade of losses now intersects with Uber’s $13 billion acquisition offer for Delivery Hero, announced last week.

The logic behind the deal, according to Uber, is to cross-sell by gaining access to takeaway customers in markets where it offers rides but not food, such as South Korea and the Middle East, and converting them into users of both.

Uber reckons that its cross-platform users generate roughly three times the gross bookings and higher profits than single-product users.

But in the case of Bangladesh, Uber exited the food delivery business within 14 months in June 2020 after failing to gain any ground despite considerable cash burn in the intensely competitive market.

There are two possible scenarios regarding the acquisition, said AKM Fahim Mashroor, former president of the Bangladesh Association of Software and Information Services. One possibility is that Uber retains the Foodpanda brand and the business continues to operate largely as it does now, he said.

The other scenario is that Uber discontinues the brand altogether, said Mashroor, also the chief executive officer of BDjobs.com. “Since Bangladesh is not a particularly lucrative market, that is also a real possibility -- everything could change.”

Meanwhile, responding to queries from The Daily Star, Foodpanda Bangladesh said it is yet to receive any indication of changes to its operations following the acquisition announcement.

“Nothing changes today. Any organisational decisions and specific branding decisions will be worked through after closing, which is expected in the second half of 2027,” the company said in a statement.

“Bangladesh is one of Delivery Hero’s most dynamic markets, possessing immense potential for long-term growth. Our focus and investments over the last decade have been dedicated to building cutting-edge technology, empowering communities economically and fostering ecosystem development for customers and partners,” the company added.

Uber did not respond to The Daily Star’s request for comment.

The government yesterday set a merchandise export target of $55.2 billion and a services export target of $8.2 billion for fiscal year 2026-27. Economists and business leaders said achieving the targets would be difficult amid an uncertain global environment and persistent domestic constraints.

The targets are 15 percent higher than the actual export earnings in the last fiscal year, Commerce Minister Khandakar Abdul Muktadir said at a press conference at the commerce ministry.

Bangladesh exported $48 billion worth of goods in FY2025-26, down 0.58 percent from the previous year.

Garment exports, which account for more than 80 percent of the country’s export earnings, fell 1.64 percent year on year to $38.70 billion in FY26. Industry leaders said exports are unlikely to recover quickly as higher energy costs, weaker consumer demand in key markets and rising inventories continue to weigh on global orders.

Before FY2024-25, merchandise exports had declined for two consecutive years after reaching a record $52 billion in FY22.

Abdur Razzaque, chairman of the Research and Policy Integration for Development, said achieving 15 percent export growth was possible, but considerable uncertainty remained.

Even the latest 10 percent tariff imposed by the US could affect exports. However, since shipments were weak in the last fiscal year, they may rebound this year, he added.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said achieving even 10 percent export growth would be difficult given the ongoing gas shortage, which has disrupted industrial production over the past 10 days.

“The current situation does not suggest the target is achievable. Exporters will be satisfied if they can achieve 2 percent to 4 percent growth by the end of the year,” Hatem said.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, also said the target would be difficult to achieve because of both domestic and external pressures.

At the briefing, Muktadir did not provide a sector-wise breakdown of the export target but said he remained optimistic that exports would recover and the goal could be achieved.

The government is counting on business stimulus measures, budget support and greater policy stability following the return of an elected government to help revive exports.

He also said exports could receive a further boost from new trade agreements. The Economic Partnership Agreement (EPA) with South Korea is expected to be signed within the next few months, while the EPA signed with Japan in February is expected to take effect after Parliament ratifies it in its next session.

Bangladesh also plans to sign at least six free trade agreements by the end of the year as negotiations progress. It is also negotiating a free trade agreement with the European Union to retain duty-free access to its largest export market after graduating from the group of Least Developed Countries (LDCs).

The country’s graduation to developing-country status may be delayed by another three years after two UN bodies, including the United Nations Committee for Development Policy (UNCDP) and the United Nations Economic and Social Council (ECOSOC), backed Bangladesh’s request.

The extension could provide greater certainty for businesses and trading partners by allowing Bangladesh to retain its LDC status until 2029, the minister said.

Replying to a question, Muktadir said improving energy supplies to industry remained a top priority, although it could not be done overnight. The government is procuring two more Floating Storage and Regasification Units (FSRUs) to increase gas supplies to factories.

He said lower exports in the last fiscal year were driven by both domestic political uncertainty and adverse global conditions. With an elected government in place, policy stability and predictability would help boost exports of goods and services, he added.

Onion farmers in several major producing districts have been grappling with low prices and mounting losses for months. But wholesale prices have risen by as much as twofold in some areas over the past two weeks, bringing much-needed relief to growers.

For consumers, however, the rebound has come at a cost, with retail prices climbing as supplies dwindle.

Visits to wholesale markets in Faridpur and Rajbari, along with interviews with farmers, traders and agriculture officials, showed that onions were selling for Tk 750 to Tk 900 per maund (37.32 kg) around mid-July, depending on quality.

Prices later peaked at about Tk 1,600 to Tk 1,900 per maund before settling at around Tk 1,500 to Tk 1,700 yesterday.

According to the Department of Agricultural Extension in Faridpur, the district produced 751,635 tonnes of onions from 47,036 hectares in 2025-26, up from 593,239 tonnes the previous season

Traders said onion supplies have fallen by around 25 percent. They attributed the decline to the spoilage of large quantities of stored onions due to excessive heat, rainfall and inadequate storage facilities, which have reduced farmers’ stocks.
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Wholesalers package onions at Baharpur onion market in Baliakandi upazila, Rajbari. The photos were taken recently. PHOTO: AHMED HUMAYUN KABIR TOPU & SUZIT KUMAR DAS

Babu Mia, 52, an onion farmer from Bastaputi village in Nagarkanda upazila of Faridpur, said he harvested 200 maunds of onions this year and stored 150 maunds. Some of the stored onions rotted, while others lost weight, leaving him with around 130 to 135 maunds.

“Two weeks ago, the price was so low that I would not even have recovered my production costs. Instead, I would have incurred further losses,” he said.

Another farmer from the same village, Sukanta Mondal, 45, said he refrained from selling his onions earlier because of the low prices and still has around 150 maunds in storage.

“The prices over the past few months had discouraged me from cultivating onions again. But the recent price hike has restored my confidence,” he said.

Nazmul Sahadat, 48, a trader at Banibaha onion market in Rajbari Sadar, said most farmers are now busy harvesting jute, while continuous rainfall over the past few days has further reduced onion supplies by about 25 percent.

Sudeb Mondal, an onion trader in Nagarkanda upazila of Faridpur, said the sudden rise in prices had caught traders by surprise.

“The price increase will benefit both farmers and traders. I think onion prices may exceed Tk 2,000 per maund,” he said.

According to the Department of Agricultural Extension (DAE) in Faridpur, the district produced 751,635 tonnes of onions from 47,036 hectares of land during the 2025-26 season, up from 593,239 tonnes in the previous season.

Nationwide, onion production reached 4.9 million tonnes against an annual demand of around 4.5 to 4.6 million tonnes.

Despite the surplus, a significant quantity has failed to reach the market because of storage losses, spoilage and post-harvest wastage.

According to the Department of Agricultural Marketing (DAM), around 50 percent of the country’s onion production remains in storage at the farm level.

The tighter supply has already reached consumers. Retail prices currently stand at Tk 50 to Tk 60 per kg, up from Tk 35 to Tk 45 per kg two weeks ago, according to data from the state-run Trading Corporation of Bangladesh.

A similar trend has unfolded in Pabna, another major onion-producing district.

Prices began climbing last Saturday (July 18) in Pabna’s wholesale markets. During the first four days of the week, they reached Tk 1,800 to 1,900 per maund. After a temporary slump around Wednesday, prices rose to Tk 1,800 to Tk 2,000 per maund by yesterday.

“The price of onion increased by Tk 100 to Tk 200 this week,” Md Robiul Islam, a prominent onion trader at Pushpopara Haat, told The Daily Star.

“When market demand rises, wholesale prices increase. Prices depend strictly on supply and demand in the wholesale market,” he explained.

For growers who endured months of low prices and mounting storage losses, the rebound has provided some respite.

Md Kamruzzaman, a leading onion farmer from Durgapur village in Sujanagar upazila, told The Daily Star that the cost of cultivating onions per bigha reached Tk 60,000 to Tk 70,000 this year.

“Farmers have experienced record spoilage this year. Around 30 to 40 percent of hybrid onions have already rotted in farmers’ homes,” he said.

The farmer estimated that onion growers could only turn a profit if prices remained above Tk 1,500 per maund.

“The current market price is acceptable,” Kamruzzaman added.

According to Md Ashikur Rahman, sub-assistant agriculture officer at the Department of Agricultural Extension (DAE) in Pabna, onions were cultivated on 54,335 hectares of land in the district this year, yielding a record total of 995,367 tonnes.

“After the harvest, more than 6.5 lakh tonnes of onions were stored in farmers’ warehouses. Currently, a stock of 275,800 tonnes remains available in the district,” Ashikur Rahman stated.

Agriculture officials have also welcomed the surge.

“The production cost of onions comes out to over Tk 32 per kg, yet onions had been selling below Tk 30 for the past four months, forcing farmers to sell at a loss. If farmers receive above Tk 40 per kg, they can make a reasonable profit. Therefore, this price increase was necessary for the survival of our farmers,” Ashikur Rahman said.

India said on Saturday it would continue engaging with the United States to conclude a bilateral trade agreement, after Washington imposed a 10 percent tariff on imports from the South Asian nation under new trade measures.

The Trump administration on Friday unveiled fresh duties of between 10 percent and 12.5 percent on goods from 60 trading partners, including India, alleging those countries had failed to curb imports made with forced labour.
The fresh duty on India is lower than the 12.5 percent tariff proposed in June and excludes products such as generic pharmaceuticals, smartphones, steel, aluminium and auto parts, India’s commerce ministry said in a statement.

India remains engaged with the United States and would continue discussions on sector-specific issues, including textiles, as part of negotiations on a bilateral trade pact, the statement said.

The two countries have been negotiating a trade agreement since last year as they seek to deepen economic ties and resolve long-standing market access issues.

“The government remains committed to working with the United States towards the early conclusion of the India-U.S. Bilateral Trade Agreement,” the ministry said.

It said about 45 percent of India’s exports to the United States would remain outside the scope of the fresh tariff because of product exemptions, while the remaining 55 percent would face the new 10 percent duty.

The fresh levy applies on top of standard US most-favoured-nation tariffs.

Reuters reported on Friday that Indian textile and apparel exporters are likely to be at a disadvantage against several Asian rivals under the new tariff regime.

India said on Saturday that a "substantial" share of its exports to the United States, which now attracts zero additional duties, including generic medicines and smartphones, continues to remain outside the scope of the additional 10% duty imposed by Washington under Section 302 related to the use of forced labour in manufacturing in 60 countries.

Also, products already covered under Section 232 measures, including steel, aluminium and auto parts, are not subject to the additional 10% duty, the Indian Commerce Ministry said in a statement.

On account of these exemptions, an estimated 45% of India's exports to the United States remain outside the purview of the additional 10% Section 301 duty, it said, adding that the remaining 55% of exports will attract the additional 10% duty, where India's tariff incidence is comparatively lower than that for most other economies covered by the investigation.

The textile-specific mechanism referenced in the final measures is yet to be established and operationalised, the statement said.

Bangladesh Bank has warned the Parliamentary Standing Committee on the Ministry of Finance that rising defaulted loans have created capital and provision deficits at many banks, increasing instability in the country’s financial sector.
The observations were presented by Bangladesh Bank’s Monetary Policy Department at the first meeting of the committee at the parliament on Sunday, bdnews24.com reports.

The central bank also identified uncertainty over fuel supplies, sluggish investment and low demand for credit in the private sector as key domestic challenges to the economy.

Speaking to bdnews24.com after the meeting, committee member Md Saiful Alam said the panel had recommended reducing the policy interest rate to a single digit and reviewing it every six months instead of leaving it unchanged for long periods.

Bangladesh will require an estimated US$421 billion in additional financing over the next five years to achieve the Sustainable Development Goals (SDGs), according to a latest government assessment.

The assessment was unveiled on Sunday at the National Validation Workshop on the Development Finance Assessment (DFA) and SDG Financing in Dhaka, organised by the Economic Relations Division (ERD) with support from the United Nations Development Programme (UNDP) and the UN Resident Coordinator's Office in Bangladesh.

The workshop reviewed the findings of the DFA-a global framework designed to align financing policies, institutions and financial flows with national development priorities-and discussed Bangladesh's updated SDG Financing Strategy, according to a press statement.

"The remaining period of SDGs up to 2030 will be challenging. The financing gap is large, the time available is limited, and the global environment remains uncertain. Nevertheless, I remain confident that Bangladesh can make meaningful progress," it said, quoting ERD Secretary Md. Shahriar Kader Siddiky.

"What we now need is a clear set of priorities, coordinated action, better governance and effective implementation", he said while speaking at the workshop as the chief guest.

Presenting the findings, Dr Selim Raihan, Professor of Economics at the University of Dhaka, outlined Bangladesh's changing financing landscape and options for raising more money from public and private sources.

He presented the $421 billion estimate for fiscal year (FY) 2026-2030, noting most of the amount would need to come from domestic public and private finance, climate finance and international partnerships.

Carol Flore-Smereczniak, UN Resident Coordinator highlighted the significance of domestic resource mobilisation at this moment in Bangladesh's development journey.

She said: "In today's world, opportunities for development financing are diminishing. This is an opportunity for Bangladesh to increase its domestic investment in the SDGs, by increasing the tax-to-GDP ratio and by encouraging the private sector to make SDG-aligned investments".

Additional Secretary of ERD and the Chair of the event A.H.M. Jahangir stressed the need for a joined-up financing plan as Bangladesh prepares to graduate from LDC status.

Speaking for UNDP, Sonali Dayaratne, Deputy Resident Representative, underscored the need for stronger financing policies and partnerships to close the funding gap.

"Financing today is no longer simply about mobilising more resources; it is about ensuring that all key government institutions, development partners, the private sector, and civil society are active partners in the design process from the outset." she noted.

The workshop was supported by the UNDP Climate Finance Network (CFN) Programme, funded by the UK's Foreign, Commonwealth and Development Office (FCDO).

It brought together government officials, development partners, banks, academics, and civil society to discuss the findings of the two studies to better plan the financial roadmap to achieve the SDGs, the statement added.

Bangladesh received US$2.30 billion in workers' remittances during the first 25 days of July 2026, marking a 20.6 percent year-on-year increase compared with US$1.91 billion received during the corresponding period of July 2025, according to the latest data from Bangladesh Bank.
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The central bank data showed that expatriate Bangladeshis sent US$129 million in remittances between July 23 and July 25 alone, BSS reports.

The strong inflow in the opening month of the 2026-27 fiscal year reflects the continued contribution of Bangladeshi migrant workers to the country's foreign exchange reserves and overall economic stability.

The US Federal Reserve is set to hold its second meeting under new chairman Kevin Warsh starting Tuesday, with markets expecting policymakers to keep interest rates steady amid inflation concerns that could be exacerbated by US President Donald Trump’s renewed war on Iran.

Warsh was chosen to lead the US central bank by Trump, who has made his demand for lower interest rates clear as he has exerted unprecedented pressure on the independent monetary policy making body.
After two days of closed-door sessions, the Fed’s open market committee (FOMC) will announce its decision on Wednesday at 2:00 pm (1800 GMT), followed by a press conference by Warsh.Most investors expect the Fed to hold rates steady at 3.50-3.75 percent for the fifth straight meeting, according to CME’s FedWatch monitoring tool.US consumer inflation eased to 3.5 percent year-on-year last month, but remains far higher than the Fed’s long-term two-percent target, which it has not achieved for more than five years.

Since last week, a ramping up of hostilities has seen intense US strikes and Tehran’s retaliatory action targeting Washington’s allies across the region, while Yemen’s Houthi rebels have threatened to blockade the Red Sea oil trading route.The fighting has sent energy prices soaring once more, with the benchmark oil futures contract breaching $100 per barrel for the first time since late May, when energy prices were on their way down.At the Fed, policymakers have been losing patience with persistent inflation, indicating that a rate hike may be near.The Fed “has to be ready to tighten monetary policy to prevent a repeat of the 2021-to-2022 inflation episode,” Fed Governor Chris Waller said last week.“Sternly staring at inflation until it melts before our withering gaze is not an option.”

Since taking office, Warsh has vowed to reduce or eliminate the amount of forward guidance the Fed provides on its decision-making process, a move that has received mixed reactions.

The new chairman has said that providing forward guidance locks policymakers into positions that they may need to change. Some analysts, however, argue that opacity in decision-making creates more uncertainty for markets.

In public statements since taking control of the Fed, Warsh has said he has a “resolute commitment” to delivering price stability, but has not offered details on how and when he thinks it would be appropriate to act.

The Fed has a dual mandate to keep inflation to its long-term target while also delivering maximum employment.

Its main tool to achieve this is the economy’s key interest rate -- raising rates tends to curtail economic activity and high prices, while lowering them encourages hiring and investment but can also stoke inflation.

The US labor market has largely stabilized, with steady unemployment despite zigzagging job growth, leaving policymakers mostly focused on inflation.

“’Resolute commitment’ is, in my opinion, insufficient to tighten monetary policy and curb any inflationary pressures,” said Gregory Daco, chief economist at EY-Parthenon.

With Warsh largely remaining silent, several other policymakers have been vocal about their concern over high prices and the potential need for action in the near-term.

“When you create a vacuum, it’s oftentimes the case that the vacuum gets filled,” said Daco.

With headline inflation dipping in June, ahead of further rises expected ahead, analysts say they do not expect a rate hike at this meeting -- but that the decision will likely see some dissenting voices.
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“We may have a new chairman, but the old guard is now worried about where the economy has moved since the beginning of the year,” Diane Swonk, chief economist at KPMG, told AFP.

Inflation has been under pressure not just from rising fuel prices due to the war, but also due to heightened demand from the AI boom and the continued effect of Trump’s tariffs rippling through the economy.

“The hawkish core of the Fed has not only hardened but it’s broadened,” said Swonk, who expects two rate hikes later this year.

US President Donald Trump had no time for lengthy tariff investigations when he returned to office last year, wanting to hammer trading partners right away to wring concessions.

What followed was a chaotic start to a trade agenda that was eventually upended by a stinging Supreme Court defeat this year.
Now he and his team are moving into a new phase to build a more durable US tariff wall using more traditional and court-tested trade laws, those he had little patience for 18 months ago.His latest global tariff salvo — duties of 10 percent or 12.5 percent on 60 countries over allegedly weak enforcement of forced-labor bans — marks the first of numerous tariff actions to be unveiled in the months ahead.They include probes into excess industrial capacity, alleged intellectual property theft by Vietnam, and national security protections for strategic industries from semiconductors to robotics and industrial machinery.“We’re at the end of the beginning of the Trump tariff agenda,” said Dan Ujczo, associate general counsel at Canadian oil producer Cenovus Energy, who specializes in US-Canada trade.

“Within the next few weeks, and certainly by the end of the summer, we will see large parts of President Trump’s trade policy fully in effect.”This could bring more clarity and certainty for businesses on Trump’s ultimate tariff structure, along with dread in foreign trade ministries that they may have to cough up more concessions to protect access to a $3.4 trillion US import market.

Trump’s new anti-forced labor duties imposed under Section 301 of the Trade Act of 1974, the unfair trade practices statute used against China during his first term, almost directly replace a global 10 percent temporary tariff that expired on Friday.

They cover 99.4 percent of US imports, the US Trade Representative’s office said.

This rebuilds part of Trump’s signature “Liberation Day” tariffs of 10 percent-50 percent on nearly every country, which the US Supreme Court struck down as illegal under an untested national emergencies law Trump used to impose them.

Another part of the baseline tariffs is likely to be rebuilt by another Section 301 investigation into excess industrial capacity, targeting 16 big trading partners, including China, the EU, Japan, South Korea, Mexico and Vietnam.

That ongoing probe targets industrial subsidies and other export-focused policies.

Amid a wider uproar over Trump’s move, some viewed it as largely maintaining the status quo.

Mark Bissell, CEO of Michigan-based vacuum maker Bissell Inc, said the newest tariffs were largely what the company anticipated and it hadn’t frontloaded inventory from China and elsewhere to try to beat them.

“We continued to run the business based on the belief that the tariffs would stay in the 10-15 percent range,” Bissell said in an email to Reuters.

Trump’s gamble on quick but untested tariffs right out of the gate did four things.

It heaped added costs onto retailers and other import-dependent industries; it brought dozens of trading partners to the negotiating table, yielding concessions for lower rates; it prompted swift retaliation and tariff escalation from China that led to a delicate truce; and it filled US fiscal coffers with hundreds of billions of dollars.

The Liberation Day tariffs alone yielded $166 billion in revenue, a major offset to a growing federal deficit, but refunds to importers have now turned those collections negative.

The 150-day temporary tariffs, based on a law meant to quell balance-of-payments crises, have added $31 billion in assessed revenue through July 5.
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But if a federal court ruling against them stands, that money, too, is subject to refund.

With US public debt approaching $40 trillion, Josh Lipsky, chair of international economics at the Atlantic Council, said subsequent administrations may become addicted to tariff revenue that is likely to be sustained.

“The tariff wall is being rebuilt strong brick by strong brick, and it’s very durable,” Lipsky said.

Trump’s broad use of Section 301 in the forced-labor case prompted an immediate legal challenge by small businesses, but trade and legal experts say this will take time to play out.

The statute has a solid track record in the courts, and judges may be reluctant to enjoin actions aimed at curbing forced labor and lowering barriers to US goods.

MORE TO COME

US Trade Representative Jamieson Greer made clear this week that Trump will use everything at his disposal to erect tariffs to reshore production and shrink the trade deficit.

“The specific authorities this administration is using have changed, but the trade strategy has not,” Greer told the US Senate Finance Committee.

Greer, who has not committed to a timeline for the industrial capacity investigations, has said the layers of tariffs being rebuilt will not exceed caps included in deals he has been negotiating,

including 15 percent for the EU, Japan and South Korea and higher rates for Southeast Asian countries.

Administration officials say even though China is viewed as the world’s largest source of excess manufacturing, its rates will not exceed the cap of about 20 percent agreed by Trump and Chinese President Xi Jinping last November,

which is on top of the 25 percent tariffs from his first term.

Some nominal — or announced — duties may be higher than actual applied rates, which analysts say may be an enforcement mechanism for countries to stick to agreed trade deal terms.

Still, some things continue to come out of the blue, including the 50 percent duties on Canadian beer, dairy, hockey sticks and other products Trump announced on Monday over Ottawa’s refusal to make trade concessions,

and his threat to cut off all trade with Spain over not meeting NATO military spending targets.

That proclivity for spontaneous tariff announcements remains an ongoing risk, said Eswar Prasad, a trade professor at Cornell University and former head of the International Monetary Fund’s China department.

“Trump’s eagerness to impose tariffs to address a whole range of grievances will not only continue disrupting the global trading system but will have significant adverse effects on American households and businesses.”

Trust Bank PLC reported a consolidated net profit of Tk119.33 crore in the first half of 2026, down 11.81% year-on-year, according to the bank's price-sensitive information.

The bank's earnings per share (EPS) stood at Tk1.20 during the January-June period, compared with consolidated net profit of Tk135.32 crore in the same period a year earlier.

On a solo basis, the bank's net profit stood at Tk123.78 crore in the first half of 2026, down from Tk139.64 crore in the corresponding period of 2025.

In the second quarter, covering April-June, Trust Bank's consolidated net profit stood at Tk92.38 crore, down around 13% from Tk105.94 crore in the same quarter a year earlier.

The bank's consolidated net operating cash flow per share stood at Tk23.13 in the first half of 2026, compared with Tk26.43 in the January-June period of 2025.

Its net asset value (NAV) per share increased to Tk30.06 as of June 2026, from Tk27.04 a year earlier.

At the Dhaka Stock Exchange, Trust Bank shares closed at Tk15.70 each today (26 July), down 0.63% from the previous trading session.

In 2025, Trust Bank reported a profit of Tk372.32 crore.

Based on its 2025 profit, the bank recommended a 13% dividend for shareholders, comprising an 8% cash dividend and a 5% stock dividend.

RAK Ceramics (Bangladesh) Limited staged a turnaround in the first half (January-June) of 2026, returning to profit with Tk2.28 crore in earnings after posting a Tk21 crore loss in the same period a year earlier.

According to price-sensitive information disclosure published on the company's website today (26 July), the ceramic tile manufacturer reported earnings per share (EPS) of Tk0.05 for the first six months of 2026, compared to a negative EPS of Tk0.49 a year earlier.

The company attributed the turnaround to changes in income tax regulations, lower depreciation costs, and improved production following a recovery in gas supply.

Revenue also increased 21% year-on-year to Tk374 crore during the January-June period, up from Tk310 crore in the same period of 2025.

The company said improved gas pressure helped increase production, while higher sales volume contributed to revenue growth. Lower depreciation costs also helped raise its gross profit margin to 19.24%, from 14.97% a year earlier.

In the second quarter (April-June) of 2026, RAK Ceramics recorded sales of Tk199 crore, compared to Tk163 crore in the same quarter last year.

The company posted a quarterly net profit of Tk7.85 crore, reversing a net loss of Tk18.50 crore in the April-June period of 2025.

As of 30 June 2026, the company's net asset value (NAV) stood at Tk645 crore, with NAV per share at Tk15.08, compared to Tk15.73 a year earlier.

The Dhaka Stock Exchange (DSE) ended its three-week gaining streak last week as heavy selling by foreign and institutional investors, coupled with regulatory uncertainty and renewed Middle East tensions, dampened investor sentiment.

Analysts said the Bangladesh Securities and Exchange Commission's (BSEC) proposed changes to margin lending rules prompted major investors to cut exposure.

The benchmark DSEX index fell 96 points, or 1.63%, to 5,804.30, while average daily turnover dropped 28% to Tk1,063 crore from Tk1,474 crore the previous week.

Foreign, institutional investors lead sell-off

DSE data showed foreign and institutional investors remained net sellers throughout the week.

On 21 July, foreign investors accounted for 3.31% of total turnover on the sell side against just 0.23% on the buy side. By the final session on 23 July, foreign buying had dropped to zero, while selling stood at 2.45%.

Institutional investors also sold more than they bought in three of the five sessions, with selling peaking at 10.18% of daily turnover on 21 July.

Retail investors remained the market's biggest buyers, accounting for nearly 90% of purchases, though they also sold shares as the market weakened.

Insurance stocks tumble on margin rule proposal

The main trigger for the decline was the BSEC's draft proposal to tighten margin lending rules, particularly by excluding several insurance stocks from margin loan eligibility, sparking a broad sell-off in the sector.

According to EBL Securities, investors reacted negatively from the week's opening session. Although speculation over possible regulatory easing briefly stabilised the market midweek, the recovery was short-lived.

Sheltech Brokerage said buying interest emerged in December-closing stocks ahead of the earnings season but lacked the strength to sustain a rebound.

General insurance stocks fell 7.4%, and life insurance shares lost 5.4%, making insurance the week's worst-performing sector. Meghna Insurance dropped 13.5%, Global Insurance 12.4%, and Standard Insurance 12.2%.

Mutual funds buck the trend

Mutual funds were the week's top-performing sector, gaining 9.3% after regulators allowed funds to retain unrealised gains instead of distributing them as cash dividends, a move seen as strengthening their financial position.

MBL First Mutual Fund surged 47.8%, while NCCBL Mutual Fund One and Green Delta Mutual Fund each gained 25%.

The non-bank financial institution (NBFI) sector also rose 2%, led by Fareast Finance, up 41.7%, and FAS Finance, which gained 38.5%.

The country's foreign exchange market has started to feel the pinch as recent changes to the interest rate cap on trade financing, along with the reimposition of tax on interest paid on offshore loans, have discouraged foreign borrowing, creating devaluation pressure that is already evident in the recent volatility of the dollar.

Bankers say the two policy changes have made foreign lenders more cautious, narrowed financing options for importers, and increased import costs.

The banking sector has been facing exchange rate volatility since early July, with the interbank dollar rate climbing to nearly Tk124 after remaining below Tk123 for about a year.

The central bank has also suspended dollar purchases from banks for the past one and a half months amid mounting depreciation pressure. In FY26, the central bank bought $6.4 billion when the taka was under appreciation pressure. Its last purchase was on 4 June.

Although the impact of the policy changes is not yet fully visible because of weak import demand amid a sluggish business environment, bankers warned of potential volatility in the dollar market if offshore funding becomes less attractive while export earnings and remittance remain insufficient to finance trade.

Shift from UPAS LCs to Sight LCs

Explaining the recent dollar volatility, the treasury head of a private commercial bank, who requested anonymity, said changes to the tax treatment of foreign borrowing have prompted many importers to shift from UPAS (Usance Payable at Sight) letters of credit (LCs) to Sight LCs to avoid the additional tax burden.

In the latest national budget, the government also reintroduced a 20% income tax on interest payments for offshore loans, ending the exemption granted in 2024. The tax was reimposed at a time when the country needs to attract greater inflows of overseas funds.

An offshore loan is a financing arrangement in which a borrower secures funds from a lender located in a foreign country, typically through an offshore banking unit.

Immediate payment requirements under Sight LCs would increase demand for US dollars, placing additional pressure on the foreign exchange market, the banker said.

He said a UPAS LC allows an importer to obtain short-term financing from a foreign bank, usually for 60 to 180 days. The foreign bank pays the exporter immediately, while the importer repays later. As this constitutes foreign borrowing, the interest is now subject to the reimposed tax.

By contrast, a Sight LC requires immediate payment once compliant documents are presented. As there is no extended financing period, it avoids the additional tax burden associated with UPAS financing.

The banker further said the tax has made UPAS financing less attractive, prompting importers to opt for Sight LCs despite the greater liquidity requirement.

However, the shift comes with higher immediate demand for US dollars because importers must arrange payment upfront instead of after 60-180 days. As a result, they need foreign currency immediately, increasing spot demand for dollars.

He said large importers can hedge part of their exposure through forward contracts, although the scope for such hedging is limited. Consequently, greater reliance on Sight LCs could add short-term pressure and volatility to the dollar market.

He added that while banks generally ensure dollar availability before opening a Sight LC, the shift away from UPAS financing could tighten foreign exchange liquidity and increase funding pressure on import-dependent businesses, particularly on commodities such as sugar and edible oil.

If cross-border borrowing declines because of the additional tax burden, the banker warned, the domestic foreign exchange market could come under further pressure. Unless export earnings and remittance inflows increase sufficiently, banks may have to rely more heavily on local dollar liquidity or arrange more expensive sources of foreign currency funding.

Interest rate ceiling

Another consequence is the central bank's 3% interest rate ceiling on short-term offshore borrowing, which has discouraged foreign lenders from extending credit to Bangladesh.

In April, the central bank instructed banks through a circular that interest rates on trade finance must not exceed SOFR plus 3%, tightening the previous ceiling of SOFR plus 4%.

Before the circular, banks could charge around 7.51% on UPAS LCs. Following the new cap, the rate has fallen to around 6.51%. By comparison, banks can charge 12% to 13% on local currency loans.

Soon after the circular was issued, the Association of Bankers Bangladesh (ABB) requested the Bangladesh Bank to revise the cap, warning that it could increase devaluation pressure because banks would be unable to meet short-term trade financing needs adequately.

The ABB also warned that interest rates on local currency loans could rise as demand for domestic borrowing increases. It said shortages of funds for short-term trade financing would increase the cost of doing business and keep inflation elevated, contrary to the central bank's policy objectives and the country's current economic needs.

Speaking to TBS, Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said the 3% interest rate cap is making the business much less attractive for banks.

"We requested the central bank to reconsider it because everyone – including the IMF – is saying that the borrowing cost is already more than 2.5%," he said.

Cap on short-term trade finance concern for international lenders

The treasury head of another private commercial bank, who also requested anonymity, said long-term borrowing has remained largely unaffected, but the 3% cap on short-term trade finance has become a concern for international lenders.

Foreign banks have already begun renegotiating pricing with Bangladeshi banks, although the impact on borrowing volumes is not yet evident because demand for trade finance remains weak, he said.

The banker said the bigger concern is that correspondent banks view regulatory pricing caps as a departure from standard market practice. International lenders invest heavily in assessing country risk, allocating capital and building correspondent banking relationships. If lending rates are administratively capped, they may lose the incentive to provide financing or expand their exposure to Bangladesh, he added.

He further said if offshore funding becomes less attractive, importers may increasingly rely on direct buyer's credit or bill discounting from overseas financial institutions. However, the new Finance Act taxes interest on such cross-border financing, raising borrowing costs that are ultimately likely to be passed on to consumers.

He also warned that domestic banks could lose leverage in negotiating terms. Banks currently use their broader relationships with customers – including loans, deposits, payroll services and other business – when arranging trade finance. If financing shifts offshore, those relationships become fragmented, weakening local banks' bargaining power.

He added that importers forced to replace cheaper foreign currency borrowing with costlier local currency loans would face financing costs typically three to four percentage points higher, driving up the prices of imported goods.

Bangladesh Bank data show commercial banks' foreign deposits posted a net inflow of $391 million during July-May of FY26, compared with a net outflow of $1.14 billion in the same period a year earlier.

Although stronger foreign borrowing recently turned the balance positive, bankers expect inflows to weaken in the coming months because of the recent policy changes.

The US has imposed new tariffs on 60 trading partners, including Bangladesh, accounting for the vast majority of its imports, over claims they failed to properly stop forced labour.

The duties, ranging from 10 per cent to 12.5 per cent, target key economic partners– including the UK, China, the European Union, Canada, Japan and India.

They came into effect on Friday, as a temporary 10 per cent tax on foreign goods introduced earlier this year expired, reports BBC.

The move is the latest escalation in the global trade war reignited by US President Donald Trump when he returned to office last year.

The US Supreme Court ruled earlier this year that many of the tariffs imposed globally under emergency powers were illegally enacted.

The president has since sought other ways to pursue his flagship trade policy.

Last month, the White House proposed 10 per cent -12.5 per cent duties on imports from dozens of countries over concerns they were not doing enough to tackle forced labour.

On Thursday, US Trade Representative Jamieson Greer, acting under Trump's direction, said those duties would now take effect.

"Today's action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere," his statement said.

Greer invoked Section 301 of the Trade Act of 1974, which governs US trade enforcement of practices that burden or restrict American commerce.

Earlier this week, the Trump administration invoked a different statute, Section 338 of the Tariff Act of 1930, to impose 50 per cent tariffs on products from Canada.

On Thursday, the Office of the US Trade Representative said the latest tariffs were being imposed on partners "for their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour".

The new duties apply to the top 60 US trade partners covering 99.4 per cent of US imports, it added.

The office said Trump had made adoption of a ban on imports produced with forced labour a "critical" part of reciprocal trade agreements with other nations.

It said so far 10 trading partners had agreed to enact such a ban in these agreements, and other countries had implemented bans in response to its investigations in recent weeks.

Trading partners that have "made commitments to adopt, and effectively enforce" bans on forced labour imports will be subject to a 10 per cent tariff, while those that have not will have the higher 12.5 per cent rate, the office added.

Greer said he was "encouraged by the trading partners who have moved quickly to adopt forced labour import prohibitions, and look[ed] forward to ensuring their effective enforcement".

The new levies show the Trump administration is "determined" to push on with its tariff strategy, said trade policy expert Deborah Elms from the Hinrich Foundation.

It is unlikely countries hit with tariffs will be able to prove that they have sufficient measures to prevent forced labour imports, she told the BBC.

The levies are likely to raise costs for businesses and consumers, although its impact could be softened due to the number of exempted goods, said the Asia Society Policy Institute's economic security expert Wendy Cutler.

Most trading partners will be disappointed with the new levies and are likely to focus on ways to "reduce their dependence on the US market" by making deals with other countries, Cutler added.

What have other countries said?

Some countries have responded to the announcement, including Brazil. Its government called the move "unjustified" and "arbitrary".

Washington has chosen to "manipulate an issue of great importance" to workers' rights to support its protectionist trade policy, Brazil's government said in a statement.

Brazil, which has been hit with a new 12.5 per cent US tariff, added that it will respond with measures under its "reciprocity law" and consider other trading partners.

Earlier this month, the US imposed a separate 25 per cent tariff on furniture, machinery, sugar and other imports from Brazil, while keeping exemptions of some goods, including beef and coffee.

The Japanese government said on Friday that it "regrets" the new US tariffs, saying that its trade is conducted in line with international rules.

Australian Trade Minister Don Farrell said the levies were "completely unjustified" and that he will continue to press Washington to lift all duties on his country's goods.

China has previously said it opposed any form of unilateral tariff, and denied allegations of forced labour.

"There is no so-called forced labour in China, and we oppose using this as an excuse for political manipulation," Chinese foreign ministry spokesperson Mao Ning said.

But several international human rights groups have said forced labour does exist in China, particularly among Muslim ethnic minorities in Xinjiang.

Trump's signature policy

Trump has long argued that tariffs protect American workers and boost the US economy.

In April 2025, Trump imposed tariffs of up to 50 per cent on global trading partners on what he called "Liberation Day", aiming to address what he saw as unfair treatment of the US.

In February, the US Supreme Court struck down those tariffs and said the president had exceeded his authority, prompting tens of billions of dollars in refunds.

But the White House has since looked at alternative ways to impose import duties, including a sweeping 10 per cent levy as part of a temporary solution that expired on Friday.

Washington has also imposed other tariffs on countries like Brazil and Canada.

The US and China have also been embroiled in a tit-for-tat tariffs war, which is currently on hold.

Trump has used tariffs to press countries, such as Mexico, on non-trade issues.

The administration could be set to impose further tariffs as it is currently investigating 16 countries - accounting for the vast majority of US imports - over claims of manufacturing overcapacity.