The DSE Brokers Association of Bangladesh (DBA) has urged Bangladesh Bank to raise the ceiling of its special fund facility for each scheduled bank to Tk 3 billion from the existing Tk 2 billion and extend the facility for another five years until November 30, 2031.

The DBA made the proposal in a formal letter submitted to Bangladesh Bank Governor Mostaqur Rahman, FCMA, on Tuesday. A copy of the letter was also sent to Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan, according to a press release.

The association said the special fund facility introduced by the central bank had played a positive role in enhancing institutional investment capacity, improving market liquidity and stability, and boosting investor confidence.

Currently, each scheduled bank is allowed to form a special fund of up to Tk 2 billion for investment in the capital market. The existing facility is scheduled to expire on November 30 this year.

The DBA said the facility should not be withdrawn amid the prevailing liquidity crunch in the capital market and heightened global uncertainty arising from ongoing tensions in the Middle East.

Instead, the facility should be strengthened to provide further support to the market, it said.

The association proposed raising the fund ceiling for each scheduled bank to Tk 3 billion and extending the facility for five more years, from December 1, 2026 to November 30, 2031.

According to the DBA, extending and enhancing the facility would help increase institutional investment, market liquidity and depth, and investor confidence.

It would also contribute to the long-term and sustainable development of the country's capital market, the association said.

The DBA expressed hope that Bangladesh Bank would take necessary steps to raise the special fund limit to Tk 3 billion and extend the facility until November 30, 2031, considering the current condition of the capital market and the broader economic interests of the country.

The association also reaffirmed its commitment to working in coordination with Bangladesh Bank and other relevant regulatory bodies to implement the government's development initiatives for the capital market and provide necessary support.

Bangladesh Bank (BB) has allowed designated authorised dealer (AD) banks to open and maintain foreign currency (FC) accounts in the names of eligible private sector industrial borrowers to retain proceeds of approved foreign loans.

The central bank issued the instruction today (Wednesday), aiming to facilitate cross-border settlement of payments from approved foreign loans, BSS reports.

According to the circular, private sector industrial enterprises in Bangladesh can avail themselves of medium- and long-term external financing subject to prior approval from the competent authorities.

The AD banks will have to obtain and retain copies of the specific approval of the competent authority for the foreign loan, including approval from the Scrutiny Committee on Foreign Loan or Supplier's Credit of the Invest Bangladesh Authority, where applicable.

For loans approved by Bangladesh Bank or the Standing Committee on Non-Concessional Loan (SCNCL), the banks will also have to retain copies of the relevant approvals.

The balances maintained in such FC accounts can be used for import payments in accordance with the prevailing Import Policy Order and foreign exchange regulations, as well as for bona fide service payments required for implementation of the projects for which the loans were approved.

For service payments, banks will have to obtain approval from the competent authority where applicable and conduct necessary due diligence, including deduction and payment of applicable taxes and VAT.

The circular also allows encashment of foreign currency into Taka from the FC accounts for local procurement, subject to the provisions of the relevant approvals.

The FC accounts may earn interest or profit, subject to the terms and conditions governing the banker-customer relationship.

The AD banks will have to report utilisation of the foreign loan proceeds to the Foreign Exchange Investment Department (FEID) of Bangladesh Bank on a quarterly basis, covering the quarters ending December, March, June and September.

After completion of drawdown and utilisation of the foreign loan proceeds, the FC accounts will have to be closed and Bangladesh Bank's FEID informed accordingly.

However, if the loan agreement requires retention of funds for repayment of the foreign loan, the FC accounts may be maintained until maturity. In such cases, the accounts may be credited with export proceeds, net of import payments, and funds arising from conversion of Taka from legitimate local sources.

The balance maintained for repayment purposes, however, cannot exceed the amount required for the next three installments.

The new provisions will apply to FC accounts opened and operated against foreign loans approved for eligible borrowers by the Invest Bangladesh Authority, Bangladesh Bank and SCNCL, as applicable.

Bangladesh Bank instructed the AD banks to ensure that the proceeds retained in such accounts are used only for the purposes for which the loans were approved and in accordance with prevailing foreign exchange regulations, approval conditions and loan agreements.

The point-to-point inflation rose to 8.34 percent in September 2026 from 8.26 percent in August, according to data released by the Bangladesh Bureau of Statistics (BBS) on Wednesday.

However, the rate was slightly lower than the 8.36 percent recorded in September last year, according to a UNB report.

Food inflation increased to 7.22 percent in September from 7.02 percent in August, while non-food inflation edged down to 9.30 percent from 9.32 percent.

In September 2025, food and non-food inflation stood at 7.64 percent and 8.98 percent respectively.

At the rural level, general inflation rose to 8.38 percent in September from 8.31 percent in August, but remained below the 8.47 percent recorded a year earlier.

Rural food inflation increased to 7.18 percent in September from 7.01 percent in August, while non-food inflation fell slightly to 9.57 percent from 9.59 percent.

In September 2025, rural food and non-food inflation were 7.54 percent and 9.40 percent respectively.

In urban areas, general inflation increased to 8.26 percent in September from 8.20 percent in August, while it was 8.28 percent in September last year.

Urban food inflation rose to 7.25 percent in September from 7.04 percent in August. Non-food inflation, however, declined to 8.94 percent from 8.97 percent.

The corresponding rates in September 2025 were 7.94 percent for food and 8.51 percent for non-food items.

Card, ATM, POS, internet banking and NPSB-IBFT services of around 30 banks resumed on Tuesday night after being disrupted since Sunday, October 4, following a sudden system upgrade by Q-Cash, an electronic payment network used by the lenders.

Several banks have since informed customers through Facebook, SMS and websites that the services are fully operational.

Senior bank officials said Q-Cash gave them little notice, with some receiving SMS only hours before or after the upgrade began. The upgrade began on Sunday night and is scheduled to continue until noon on October 10.

On Tuesday, Bangladesh Bank summoned IT Consultants Limited, the operator of Q-Cash, and directed it to promptly restore card-related services.

Arief Hossain Khan, executive director and spokesperson of Bangladesh Bank, told The Daily Star that the services were restored Tuesday night and the issue had been resolved.

“We called in Q-Cash’s management, and they told us it was an accident. Their server migration had been scheduled for October 28, but a server fault forced them to begin immediately. If they hadn’t, a major disaster could have occurred. Even so, we have asked them for a written explanation,” he said.

A senior BB official, requesting anonymity, alleged that the disruption stemmed from non-payment of dues to Compass Plus, the system’s original equipment manufacturer, and poorly planned system activities.

Asked whether the incident was linked to a dispute with a foreign company, the BB spokesperson said, “We have no knowledge of this.”

Kazi Saifuddin Munir, managing director and CEO of IT Consultants, did not respond to calls or WhatsApp messages from The Daily Star.

On October 5, Munir said the migration was scheduled for October 28, and the company had informed the banks and BB.

“However, due to unavoidable circumstances, we had no option but to proceed immediately with full migration to the new system,” he said.

He said the company had provided the service to banks for 24 years without incident and was trying to make all services available by Thursday evening.

Listed company Fine Foods Limited has recommended a 40.5% cash dividend for its general shareholders for the fiscal year 2025-26, while its sponsors and directors will receive a 5% cash dividend for the year.

The dividend was recommended at a board meeting held yesterday after reviewing the company's financial results for the year ended 30 June 2026.

Meanwhile, Fine Foods' share price fell 0.44% to Tk471.40 on the Dhaka Stock Exchange (DSE) today (7 October).
Fine Foods has a total of 13,973,918 shares. Of these, general shareholders hold 12,027,102 shares, while sponsors and directors hold 1,946,816 shares.

Under the proposed dividend, general shareholders will receive a total of Tk4.87 crore, while sponsors and directors will receive Tk9.73 lakh.

The record date for the dividend has been set for 12 November 2026.

Alongside the dividend announcement, the company reported significant improvement in its financial performance for FY26.

Fine Foods' turnover rose to Tk26.11 crore in FY26 from Tk11.89 crore a year earlier, representing an increase of around 120%.

The company's earnings per share (EPS) rose sharply to Tk11.81 in fiscal 2025-26 from Tk4.18 a year earlier, marking an increase of around 183%.

Meanwhile, net asset value (NAV) per share increased to Tk25.20 from Tk14.65, while net operating cash flow per share rose to Tk1.90 from Tk1.67.

The board also recommended holding the company's 32nd Annual General Meeting (AGM) at 11:50am on 26 December. The AGM will be held under a hybrid system.

Unitholders of CAPM BDBL Mutual Fund-01 have overwhelmingly approved a proposal to convert the closed-end mutual fund into an open-end fund, according to a disclosure by its trustee.

At a Special General Meeting (SGM) held at RAOWA Convention Hall in Mohakhali DOHS today (7 October), 99.19% of unitholders, based on units held, voted in favour of the conversion.

The conversion now requires approval from the Bangladesh Securities and Exchange Commission (BSEC).
The move follows regulatory changes under the BSEC Mutual Fund Rules, 2025. In June, the securities regulator instructed trustees to comply with provisions requiring eligible closed-end mutual funds to either convert into open-end schemes or proceed with redemption.

Against this backdrop, the trustee called the SGM yesterday, where unitholders were given the option to approve the conversion or proceed with redemption.

The proposal was approved under Rule 63 of the BSEC (Mutual Fund) Rules, 2025, the trustee said.

If approved by the regulator, the fund will shift from a closed-end structure, where units are traded on the stock exchange, to an open-end structure, where investors generally subscribe to or redeem units based on the applicable net asset value (NAV) and fund terms.

The conversion could therefore change how investors buy and sell units of the fund. The effective date and subscription and redemption arrangements will depend on the terms approved by the BSEC.

CAPM BDBL Mutual Fund-01 is managed by CAPM Company Limited and sponsored by Bangladesh Development Bank Limited. Its units are currently traded on the Dhaka Stock Exchange.

The trustee will now complete the regulatory process, with the conversion taking effect only after BSEC approval and compliance with any conditions imposed by the regulator.

Senior officials in India and the United States have indicated long-running efforts to finalise a bilateral trade agreement have stalled, again. Both nations had agreed to a framework for the deal in February which brought down to 18 percent from 50 percent the punitive tariff on most Indian goods imposed in August last year after a previous round of talks collapsed.

In the meantime, the Supreme Court invalidated US President Donald Trump’s use of emergency powers to impose sweeping tariffs globally, leading to a 10 percent baseline rate. But a final deal between two of the world’s biggest economies remains elusive.
WHY HAVE TRADE TALKS HIT A WALL?

Trade talks have reached a “plateau” with little room for manoeuvre, Finance Minister Nirmala Sitharaman said earlier this week, following United States Trade Representative Jamieson Greer’s comment that a deal is not “imminent.” Neither side has detailed reasons for the delay in finalising the deal.

But talks in the past months have met with complications, most recently a new US law that paves the way for up to 100 percent tariffs on Indian goods because of New Delhi’s purchase of Russian oil. Those purchases have not been significantly reduced.

The potentially stiff levy goes against New Delhi’s efforts to secure tariff terms better than peer economies, including Vietnam and China. A deal has also been held back because Washington is yet to complete a Section 301 trade investigation on several nations over alleged excess industrial capacity. The probe is to evaluate whether such overproduction is hurting or undercutting American industries.

Unless this probe is completed, it is hard to tell what final tariff Indian goods will attract. Overall, bilateral ties between India and the US have been rocky this past year, casting a shadow on efforts to stabilise their trade partnership. Events including a US military attack on a ship off Oman that killed three Indian seafarers and India rejecting Trump’s repeated claim of brokering a ceasefire with Pakistan have hurt relations.

WHAT IS AT STAKE?

The US is India’s largest export market and exports have so far been resilient. India’s goods exports to the United States rose to $42.79 billion in April-August from $40.39 billion a year earlier. In the fiscal year 2025/26, India enjoyed a nearly $34 billion trade surplus with the US. India says many of its largest export categories to the US, including generic pharmaceuticals and smartphones, are not subject to the current 10 percent levy. But analysts say that in the absence of a trade deal, India risks higher US tariffs from the ongoing trade probe and purchase of Russian oil, even if it could negotiate for waivers under the sanctions law. Another increase in tariffs could hurt businesses, dent market sentiment and hurt the Indian currency, which is already trading close to record lows.

WHAT MORE DO THE TWO SIDES WANT?

India is striving to protect politically sensitive sectors, particularly agriculture, while securing better tariff treatment for its exporters. India has sought to keep dairy, poultry, rice, wheat and other farm products outside the scope of market-opening commitments. It wants greater certainty over US tariffs before making concessions.

The Trump administration wants India to cut Russian oil purchases, arguing Indian purchases of Russian crude help finance the war in Ukraine. India says decisions on where to source fuel are driven by the energy needs of its 1.4-billion-strong population. Russian crude became particularly important after Moscow’s full-scale invasion of Ukraine because it was available at discounted prices. The war in the Middle East and resulting disruptions have sharpened the calculation over energy imports.

ARE FURTHER TALKS PLANNED?

US Secretary of State Marco Rubio is expected to visit India later this month, when two-way talks could make some progress. Modi and Trump, who spoke by phone on September 30, are also expected to speak again soon to review progress. Modi is expected to visit the US in December for a G20 leaders’ meet.

Bangas Limited, a publicly listed biscuit maker, saw its business decline in the 2025-26 fiscal year, as domestic sales fell by around 16% from the previous year despite a strong rise in exports.

The confectionery products manufacturer reported local sales of biscuits and bread at Tk14.57 crore in FY26, down 18.64% year on year from Tk17.91 crore in the previous fiscal year.

Meanwhile, its exports soared 41% to Tk1.17 crore from Tk83 lakh in FY25, according to the auditor's report published on the stock exchanges' website.

As its sales dropped, the biscuits manufacturer witnessed a decline in its profit by 14% in FY26.

Bangas sells Grand Choice, Evening Touch, Lovely, Wonder, Glucose and Lexus biscuits in the local market.

The company reported earnings per share (EPS) of Tk0.24 at the end of June 2026, down from Tk0.28 in the previous fiscal year.

Based on its outstanding shares, its net profit stood at Tk18.26 lakh in FY26, compared with Tk21.34 lakh a year earlier.

Its board of directors approved a 3% cash dividend for general shareholders only, meaning sponsor-directors will not receive any dividend.

General shareholders will receive Tk17.60 lakh in dividends for FY26.

The company reported a net asset value (NAV) per share of Tk21.10, while net operating cash flow per share was negative Tk0.25.

It has scheduled its annual general meeting (AGM) for 12 November through a hybrid platform, while 19 October has been fixed as the record date to determine eligible shareholders.

Bangas Limited, which was listed on the stock exchanges in 1984, produces sweet and salted biscuits and bread under the Bangas brand.

Its shares closed at Tk117.40 each on the Dhaka Stock Exchange (DSE) yesterday, meaning the stock is trading significantly above its NAV per share.

Countries, both rich and poor, must take faster action to cut debt and counter growing inequality as their economies weather a triple whammy from the artificial intelligence boom, heavy borrowing and shocks from wars in the Middle East and Ukraine, the head of the IMF said Wednesday.

“Some very tough political choices stare us in the face,” IMF Managing Director Kristalina Georgieva said in a speech in Singapore ahead of autumn IMF-World Bank meetings to be held in Bangkok next week.

“My message to the world’s economic policymakers next week will be this: we cannot keep delaying necessary policy action — you have the tools, now have the wisdom to use them,” she said.

At the meetings in Bangkok, finance ministers and central bank governors of 191 IMF-World Bank member countries will assess the state of the world economy and discuss strategies to support financial stability and sustained growth.

So far, the hardest recent hits to global well-being have come from conflicts in the Middle East, Ukraine and elsewhere, Georgieva noted.

But excessive debt is a growing burden for wealthy countries such as the US, Japan and Germany, as well as low-income countries that must choose between spending on public welfare or repaying onerous loans at a time of high interest rates, she noted.

Georgieva pointed to risks associated with the rapid buildup of data center capacity to deliver artificial intelligence, which has helped push stock prices in many places to record highs, supporting strong economic growth despite high energy costs due to the Iran war.

Investments in AI are likely to exceed the relative scale of spending on building railroads, electricity grids and telecommunications networks.

“Love it, hate it or fear it, AI is here, rapidly becoming a key driver of countries’ relative fortunes in the world economy,” she said.

The AI building boom is underpinning robust corporate earnings as well as higher inflation. But there is a lag between the heavy investments involved and the arrival of AI’s benefits, Georgieva said.

“Should earnings fall short,” she said, “hyperscaler leverage and large and growing global holdings of U.S. equities could turn a disappointment into a far-reaching shock.”

Seven of the top 10 countries for AI-related trade are in the Asia-Pacific region, where the share of global economic activity has risen to 43 per cent from 25 per cent in 1991, the last time the meetings were held in Bangkok.

While China, India, Japan, South Korea, Taiwan and other countries with strong tech sectors are benefiting from the AI boom, it is bypassing most others, Georgieva said, adding to economic inequality. AI also is raising energy demand, pushing prices for fuel, fertilizer, food and other key commodities still higher.

She urged countries to rein in public spending and to raise the cost of borrowing as needed to control inflation, while protecting the most vulnerable members of their societies.

Policies are needed to ensure AI is well regulated and to train workers, make labor markets more flexible, facilitate entrepreneurship and improve energy security, Georgieva said.

GPH Ispat, a listed steelmaker with liabilities of around Tk 12,000 crore, has asked the Bangladesh Bank to waive or relax Credit Information Bureau (CIB) requirements for four months as it seeks to restructure part of the debt owed to more than two dozen banks and finance companies.

In a letter to the central bank governor on September 24, the company said the bureau’s procedural and regulatory requirements were complicating its efforts to secure banking facilities and complete the proposed loan restructuring on time.
Earlier in June, City Group was given a three-month lifeline until September to restructure its outstanding loans following its request. City Group’s outstanding loans now stand at around Tk 25,000 crore, spread across 48 banks and non-bank financial institutions.

GPH Ispat said the CIB listing was affecting its working capital management and ability to keep operations running without interruption.

The CIB is the central bank’s database of borrowers’ credit histories. Banks consult it before approving new credit, meaning a borrower’s CIB status can directly affect access to fresh financing, including working capital.

The steelmaker has liabilities of around Tk 12,000 crore with more than two dozen banks and finance companies, including United Commercial Bank, Pubali Bank, Mutual Trust Bank, Trust Bank, City Bank, One Bank, Dutch-Bangla Bank, BRAC Bank, Eastern Bank, Modhumoti Bank, Sonali Bank, NRBC Bank, Meghna Bank, Southeast Bank, NCC Bank, Mercantile Bank and Uttara Bank.

The company said it was taking steps to strengthen its finances, improve liquidity management, regularise its dues and keep the business running.

A meeting on the issue was held at the central bank on September 13, led by the governor. It considered restructuring and rescheduling the company’s loans and credit facilities, as well as implementing a coordinated turnaround plan.

A committee headed by the managing director of United Commercial Bank has been formed to resolve the matter. At its meeting in September, the committee decided to prepare a realistic, coordinated plan to restructure the company’s overall liabilities.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, told The Daily Star, “We sat down with the BSEC chairman to discuss how the company can be supported.”

“In the country’s current situation, we must come forward to save companies like these,” he said, adding that work was under way. “We are considering giving them loan rescheduling or restructuring facilities, and looking at new working capital.”

GPH Ispat wants the relaxation to complete the ongoing restructuring and rescheduling, finalise documents and approvals with banks and financial institutions, arrange working capital to keep its normal business going, carry out its financial restructuring and deleveraging plan approved by regulators and lenders, and improve cash flow and its ability to repay and regularise its dues.

The company stressed that the request was aimed only at supporting its recovery and business continuity, not at evading or weakening any regulatory requirement. It said it remained committed to transparency with banks and compliance with all applicable laws, prudential rules and the BB directives.

The letter was signed by managing director Mohammad Jahangir Alam, who declined to comment when contacted.

An analysis of GPH Ispat’s financial statements shows that it made a profit of more than Tk 100 crore only twice in the decade since FY2014-15, while repeatedly expanding capacity with bank loans. Its profit margin remained mostly below 5 percent.

According to its audited report, GPH Ispat, which was incorporated in 2006, had long-term loans of Tk 4,718 crore and short-term loans of Tk 2,802 crore at the end of the last fiscal year.

Sales fell by around 30 percent year-on-year to Tk 3,940 crore. Despite the decline, the company posted a profit of Tk 3 crore, compared with a loss of Tk 24 crore in the previous year.

GPH Ispat’s annual production capacity includes 8.4 lakh tonnes of mild steel billets and 6.4 lakh tonnes of MS rods and medium sections.

In its FY25 annual report, the company said the country’s total annual steel production capacity was around 13-15 million tonnes, while effective demand had declined sharply, pushing capacity utilisation down to roughly 30-40 percent.

It described the mismatch between capacity and demand as a major short-term challenge for the sector. The situation did not improve in the last fiscal year.

Bangladesh’s economic growth more than doubled to 4.6 percent in the final quarter of fiscal year 2025-26 (FY26) from 2.05 percent a year earlier, driven by a strong recovery in manufacturing and services, according to the Bangladesh Bureau of Statistics (BBS).

The growth estimate, however, comes against a backdrop of weak private-sector credit, energy supply constraints and financial-sector vulnerabilities, prompting economists to caution against interpreting the rebound as a broad-based acceleration of the economy.

Industrial production grew 6.52 percent in the April-June quarter, compared with just 0.92 percent in the same period a year earlier, the BBS reported in its quarterly estimate of the country’s gross domestic product (GDP).

GDP is a measure of the final value of goods and services produced in an economy over a certain period.

A robust rebound in manufacturing and construction drove the industrial uptick, offsetting the slump in utility supply services, according to the national statistical agency.

Manufacturing was the main driver, with growth surging to 8.66 percent from 3.28 percent a year earlier. It was the highest growth in the sector in six quarters.

The construction sector also returned to positive growth, expanding 1.69 percent in the fourth quarter after contracting 4.47 percent in the same quarter of FY25.

The services sector, which accounts for the largest share of the economy, grew 4.28 percent in April-June, nearly doubling from 2.26 percent a year earlier.

The rebound in industry came despite continued weakness in electricity, gas and water supply services, which contracted 2.41 percent in the fourth quarter following a 3.56 percent decline in the previous quarter.

Agriculture, meanwhile, recorded slower growth of 1.73 percent in the fourth quarter, down from 3.19 percent a year earlier.

INTERPRET CAUTIOUSLY: ECONOMISTS

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said the strong manufacturing growth warrants careful scrutiny.

“It is not immediately easy to reconcile such strong manufacturing growth with the broader conditions prevailing during the period, including energy supply constraints and the continued weakness of private-sector credit growth,” he said.

While stating that the fourth-quarter GDP figure appears relatively strong, he said that it should be viewed against the unusually weak performance a year earlier.

In the same quarter of FY25, growth was exceptionally weak at just 2.05 percent.

“When economic activity recovered from that unusually low level, the year-on-year growth rate naturally appeared much higher. The latest figure does indicate some recovery, but it should not be interpreted as evidence of a broad-based or particularly strong acceleration in the economy,” he said.

One possible explanation, he said, is that confidence improved, at least temporarily, following the February 2026 election, supporting some recovery in production and investment-related activity.

“If the manufacturing estimate is borne out by subsequent data, that may have contributed meaningfully to the stronger overall GDP number. Even so, the scale of the reported manufacturing rebound remains difficult to fully explain at this stage, and a clearer assessment will require more detailed sectoral and high-frequency data,” Razzaque said.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said the quarterly growth could be described as moderately encouraging compared with the average growth recorded over the past two fiscal years.

He, however, added, “It is still far below what Bangladesh needs and what the economy is capable of achieving.”
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The Purchasing Managers’ Index (PMI) also points to an improvement in economic activity during the quarter. The average PMI rose to 56.8 in the fourth quarter from 54.4 in the previous quarter.

Reaz said the manufacturing sector showed some improvement in July, but momentum weakened in August and September.

Meanwhile, Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, said fourth-quarter growth typically receives a boost from higher execution of the Annual Development Programme, as the government settles bills and seeks to meet year-end targets.

“But we have to be very cautious that the structural problems hindering our growth are very real, especially those stemming from the banking sector and the energy sector. Without serious commitment to reform, I think the outlook is not very great for growth to enjoy a serious positive turnaround,” he said.

The BBS released the data a day after the World Bank estimated that Bangladesh’s economy grew 3.4 percent in FY26.

The multilateral lender also forecast 3.4 percent growth for the current fiscal year, citing a deepening energy crisis, financial-sector vulnerabilities and global uncertainties.

The World Bank’s forecast would mark a fourth consecutive year of slowing economic expansion.

The 16th Bangladesh-India Joint Working Group on Trade will be held in New Delhi today and tomorrow, with Bangladesh set to raise several bilateral trade issues, including non-tariff barriers, anti-dumping duties on jute goods and land port-related matters.

A 10-member government delegation led by Ayesha Akther, additional secretary to the commerce ministry, left the country yesterday to attend the meeting.
Mohammad Abdur Razzaque, chairman of RAPID, said the meeting was a constructive approach by both countries at a time when bilateral relations remain strained.

“We will raise almost all the trade-related issues from Bangladesh’s side. But we do not know yet what the Indian side may raise. However, this is a platform for discussion, not a decision-making meeting,” a delegation member, requesting anonymity, told The Daily Star over the phone.

Among the major issues, Bangladesh will discuss anti-dumping duties on Bangladeshi jute goods, rail freight and the normal movement of goods between the two countries.

Non-tariff barriers are major obstacles to bilateral trade and will also be discussed. However, the official said the Comprehensive Economic Partnership Agreement (CEPA) is not on Bangladesh’s agenda.

The bilateral trade deficit will also come up for discussion, as India’s exports to Bangladesh are much higher than Bangladesh’s exports to India.

Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said the meeting was a constructive approach by both countries at a time when bilateral relations remain strained.

Trade relations between Bangladesh and India should be normal, as the two neighbouring countries are important sources of raw materials and finished goods for each other, he said. India could become a larger market for Bangladesh if trade barriers are reduced.

Once Bangladesh loses preferential market access after graduating from the group of Least Developed Countries (LDCs), Bangladeshi exporters may face a 20 percent duty on exports to India, compared with the current zero rate.

“It will come as a shock for Bangladeshi exporters,” he said.

Bangladesh mainly exports garments to India, although agricultural and fisheries products are also exported there, he added.

In fiscal 2025-26, Bangladesh exported goods worth $1.75 billion to India and imported goods worth $10.96 billion, according to National Board of Revenue (NBR) data.

After China, India is Bangladesh’s second-largest source of imports, with local traders importing large volumes of industrial raw materials, fabrics, yarn and cotton.

Bangladesh wants to increase bilateral trade with Indonesia to more than $10 billion, with Commerce Minister Khandakar Abdul Muktadir calling for greater exports and progress on a long-stalled preferential trade agreement.

Muktadir said market-access barriers need to be removed and Bangladesh's exports of ready-made garments, pharmaceuticals and agricultural products expanded to narrow the large trade imbalance between the two countries.

The issues came up during a meeting between Muktadir and Indonesian Deputy Foreign Minister Muhammad Anis Matta at the Ministry of Commerce on Wednesday.

"Bangladesh imports about $3.5 billion worth of goods from Indonesia," the commerce minister said.

"Meanwhile, Bangladesh exports only about $56 million worth of goods to the country. Bangladesh needs to increase its exports to reduce this trade deficit.

"If market-access barriers are removed, it is possible to increase trade between the two countries to more than $10 billion."

The meeting also covered the proposed preferential trade agreement (PTA), a Comprehensive Economic Partnership Agreement (CEPA), energy cooperation, mutual recognition of halal certificates, and access to the Indonesian market for Bangladeshi potatoes, medicines and vaccines.

Muktadir said Bangladesh produces pharmaceuticals to international standards and exports them to more than 100 countries.

He sought Indonesia's cooperation in easing procedural complications, including drug registration requirements, to help increase Bangladeshi pharmaceutical exports to the Indonesian market.

Matta welcomed a proposal to organise a standalone exhibition of Bangladeshi pharmaceutical products in Jakarta and assured Bangladesh of cooperation in arranging the event.

Bangladesh and Indonesia have held four rounds of talks on the PTA but have yet to agree on duty-free market access for ready-made garments. The negotiations have been stalled since 2023.

Matta acknowledged competition between the textile and garment industries of the two countries but said the problems needed to be identified and steps taken to resolve them.

He proposed a ministerial-level meeting between the two countries during the international trade fair in Indonesia from Oct 14-18. He also invited Muktadir and a Bangladeshi delegation to attend the event.

Indonesian Ambassador to Bangladesh Listyowati and other officials from the two countries also attended the meeting.

The Executive Committee of the National Economic Council (ECNEC) on Wednesday approved Rampal solar power plant and 12 other development projects involving Tk 162.08 billion ( Tk 16,207.55 crore).

The projects included 10 new schemes, two revised ones and one involving an extension of the project period, UNB reports.

The government will provide Tk 10,600.80 crore from its own funds, while Tk 4,081.85 crore will come as project loans and Tk 1,524.91 crore from the concerned organisations’ own funds.

Prime Minister and ECNEC Chairperson Tarique Rahman presided over the meeting held at the Secretariat.

Of the approved projects, seven are under the Ministry of Local Government, Rural Development and Co-operatives.

These include a project to improve road infrastructure and drainage systems in 18 wards of five newly incorporated regions of Dhaka South City Corporation; infrastructure development in important areas of Rangpur City Corporation; rehabilitation of damaged roads in Rangpur City Corporation; and construction of roads, drains and footpaths in zones 1 to 8 of Gazipur City Corporation.

The ECNEC meeting also approved a project to construct the 442MW peak solar power plant at Rampal under the Ministry of Power, Energy and Mineral Resources.

It also approved a project for developing women’s skills and creating entrepreneurs through cooperatives, a rural infrastructure development project in Sirajganj, Bogura and Naogaon districts, and the second phase of the Important Urban Infrastructure Development Project under its second revision.

The Ministry of Shipping’s project for Bangladesh Inland Water Transport Corporation (BIWTC) was approved in its third revision.

The project involves procuring 35 commercial vessels and eight auxiliary vessels and constructing two new slipways.

Besides, a railway project for expanding the capacity of Bangladesh Railway by procuring 30 metre-gauge diesel-electric locomotives was also approved.

The ECNEC meeting also approved a Foreign Ministry project to renovate and modernise the purchased chancery building in Paris, France, so that it can be put into use.

Two projects under the Road Transport and Bridges Ministry also received approval. One involves constructing the Second Karatoya Bridge at the 15th kilometre of the Bhajanpur (Nijbari)-Atorkhari-Mayanguri-Amtali-Mirgh-Panchagarh (Z-5060) road and the other is the second revised Thanchi-Rumaikri-Madak-Likri road construction project.

Meanwhile, the ECNEC was informed about a project costing less than Tk 50 crore that had already been approved by the Planning Minister.

The project involves re-excavating the Nandahar and Harabati rivers and the Nungola and Kharoa canals in Joypurhat district.

Dhaka Chamber of Commerce and Industry (DCCI) and the Economic Reporters’ Forum (ERF) Institute signed a memorandum of understanding (MoU) on Wednesday to strengthen bilateral cooperation and undertake joint research on Bangladesh’s economy.

DCCI President Taskeen Ahmed and ERF President Doulot Akter Mala signed the agreement at the DCCI auditorium on behalf of their respective organisations.

Under the MoU, the two organisations will collaborate on training programmes, workshops, seminars, research and knowledge-sharing activities, with a particular focus on strengthening the capacity of journalists covering economic issues.

Speaking at the signing ceremony, DCCI Senior Vice President Razeev H Chowdhury said economic reporting plays a vital role in helping entrepreneurs and policymakers formulate effective responses to emerging economic challenges at home and abroad.

He expressed hope that joint initiatives by the DCCI and ERF would contribute to enhancing the professional skills of economic journalists.

ERF President Doulot Akter Mala said the DCCI has long-standing experience and a strong reputation in conducting research on economic and business issues.

She expressed hope that the MoU would provide opportunities for the two organisations to jointly conduct research on Bangladesh’s economy, particularly trade and investment.

Such joint research would help promote informed policymaking, necessary economic reforms and private-sector development, she said.

DCCI Secretary General Dr A K M Asaduzzaman Patwary, ERF General Secretary Abul Kashem and members of the ERF Executive Committee, among others, were present at the signing ceremony.

National Board of Revenue (NBR) high-ups, however, harbour doubts about accuracy of such huge claim buildups and say scrutiny is needed before claim settlement.

Exporters and manufacturers deplore that they cannot also submit new applications for VAT refunds as the VAT-refund module remains disabled.

Refund of VAT, literally, remains stalled due to the disabled online module that is mandatory for submitting refund applications.

Businesses without bonded-warehouse facilities are the worst sufferers.

Since November last year, filing refund applications through the online system has been mandatory. No manual application is allowed for VAT refunds. However, no digital module is currently active for submitting refund applications.

Businesses view this dilemma as a sign of the revenue authority's unwillingness to allow VAT provided for by the law.

However, a National Board of Revenue (NBR) high-up found the existing Tk 150 billion refund claims suspicious and would need scrutiny.

A senior VAT official has said the refund claim is huge and abnormal, raising doubts that some businesses may be showing lower selling prices or lower value addition.

"Currently, we are allowing refund of Advance Tax (AT) to be claimed through applications," he said.

Naimul Huda, Executive Director of Incepta Pharmaceuticals, has said the company has a pending VAT-refund claim of Tk 120 million dating back to 2019.

"We neither give entry in the system nor claim the AT manually," he told The Financial Express.

VAT consultant Md Daud Faraizy, however, has said the VAT authority is not even allowing businesses to submit application.

"The NBR has no timeline to approve refund applications, but businesses must submit refund applications within six months, in general, of the creation of the refund," he said.

A VAT-registered manufacturer or importer can usually adjust AT in its VAT return. If an eligible surplus remains, it may apply for a cash refund under the refund rules.

Also, an unregistered importer may apply for an AT refund if the goods are for its own final use and will not be transferred to anyone else.

VAT and SD refunds claimed by exporters, deemed exporters, back-to-back LC exporters, and organisations having closed their operations in Bangladesh, on the import of raw materials remained blocked due to dysfunctional modules in the VAT online system.

Businesses find the inactive refund module a violation of existing VAT law provisions on refunds, as even the submission of refund applications remains blocked.

A number of businesses having supplied raw materials for megaprojects are not receiving their refunds despite having applied to the NBR years ago.

A senior official of the NBR says the AT-refund process has been made smoother, but VAT-refund claims by exporters and local manufacturers remain stalled as the NBR decided to investigate the claims.

VAT expert Daud Faraizy, however, has said the refund claims have accumulated over the last six years because businesses were not allowed to avail themselves of the facility.

"Now the amount has turned into a large sum, which the revenue authority finds difficult to pay," he said, explaining that if the amount were divided, the refund demand in each year would have been negligible.

In the VAT online system, it has been mentioned that businesses cannot claim refunds for VAT, except AT.

On November 11, 2025, the NBR introduced online VAT refund by establishing interconnectivity with the Integrated VAT Administration System and Bangladesh Electronic Fund Transfer Network. It scrapped the provision for manual refund application, asking all taxpayers to apply for refunds using the new module.

In the module, the NBR inserted a 27-point checklist for refund processing, including a ceiling for claiming refunds, updated return submission and other compliances.

Mr Faraizy says the law and rules allow online refund application but the provision has not been followed due to the absence of a functioning online system.

Businesses with stuck-up refund claims include Apex Yarn Dyeing Limited, Ispahani Tea, DBL Ceramics, CEAT AK Khan ltd, KSRM, Confidence group, SAMUDA, Primitak, Hawlader Yunus & Co, Ranks Telecom, Walton Hi-Tech Industries, Incepta Pharmaceuticals, Abul Khair Consumer Products, BSRM Wires, Kabir Steel Ltd, Madina Garments, SR Shipping Ltd, Kiswan Snacks, Confidence Infrastructure, Global Steel and Engineering, Protik Ceramics, Karnaphuli Shoes Industries, Fulkoli Bread and Biscuits Ltd, Banoful and Company, Universal Sweater, and Pacific Workwears.

Bangladesh's apparel exports to the US declined in January-August 2026, but the rate was less than those of several major Asian competitors as overall US clothing imports contracted amid higher prices.

US apparel imports fell 7.42% year-on-year to $49.08 billion in the first eight months of 2026, while imports from Bangladesh declined 4.43% to $5.39 billion, according to the US Department of Commerce's Office of Textiles and Apparel (Otexa).

Shipments from China and India fell 29.39% and 26.44%, respectively, while Pakistan declined 3.83% and Vietnam 0.76%. Imports from Cambodia and Indonesia, meanwhile, rose 6.91% and 2.58%.
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Fazlul Hoque, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh's smaller decline was encouraging amid the broader market contraction.

"US imports have been affected as the prices of goods have increased. In that context, the positive aspect is that our decline is smaller than that of our competitors," he told TBS.

He said export orders were gradually returning, indicating an improving trend.

Tariff advantage supports Bangladesh

Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), attributed Bangladesh's relatively resilient performance partly to its favourable tariff position compared with major competitors such as China.

"Compared with our competitors, our tariff structure is better. Naturally, buyers will want to take advantage of that," he said.

However, Bangladesh needs to move into higher-value apparel and expand man-made fibre production to strengthen its position, he added.

Shovon Islam, managing director of Sparrow Group, said Bangladesh's tariff structure and diversified product range were helping it compete with India and Pakistan, while lead times and raw material availability remained key weaknesses.

Bangladesh is performing better than India and Pakistan and roughly on par with Indonesia and Cambodia, but remains behind Vietnam, he said.

Vietnam benefits from shorter lead times and a stronger position in higher-value athletic and performance apparel made from man-made fibres, he added.

Product diversification key to bigger gains

Otexa data show Bangladesh's apparel import volume fell 2.75% in square-metre equivalent terms during January-August, while its average unit price declined 1.73%.

China and India recorded much steeper volume declines of 21.61% and 24.91%, respectively. Vietnam's volume fell 0.18% and Pakistan's 0.27%, while Cambodia and Indonesia posted growth of 7.18% and 8.53%.

Bangladesh's average unit price decline was smaller than China's 9.93% and India's 2.04%, but the overall average unit price of US apparel imports rose 1.71%.

Shovon said Bangladesh needs to expand higher-value and man-made fibre production to capture more of the shifting US demand.

He said Chinese manufacturers were increasingly diversifying production towards Vietnam and Cambodia as their access to the US market weakened, creating an opportunity for Bangladesh to attract investment.

Chinese investors remain interested in Bangladesh, but concerns over the political and policy environment, bank financing, energy supply and law and order have slowed investment, he said.

Bangladesh had previously attracted around 250 Chinese investors, mainly in garments and textiles, but the momentum has weakened since 2024, Shovon added.

August rebound offers relief

Bangladesh's RMG exports to the US surged 25.65% year-on-year to more than $817 million in August, according to Bangladesh Export Promotion Bureau data compiled by Bangladesh Apparel Voice.

Exports to the US totalled $1.61 billion in July-August, up 11.42% year-on-year.

The August rebound is a positive signal after a weak first half, but sustaining the momentum will depend on converting Bangladesh's tariff advantage into longer-term sourcing gains, Shovon observed.

With Vietnam remaining resilient and Cambodia and Indonesia expanding, Bangladesh is holding its ground in the US market. However, gaining a larger share will require improvements in competitiveness beyond tariffs, including shorter lead times, greater product diversification and stronger man-made fibre capacity.

The government is seeking $6.47 billion in foreign loans from multilateral development banks and bilateral development partners to implement 13 new projects, including upgrading the Dhaka-Chattogram highway to six lanes, constructing MRT Line-2 and procuring 300 electric buses.

The projects have a combined estimated cost of Tk1,06,439 crore, of which Tk79,583.47 crore has been proposed as foreign financing.
The proposals will be placed before the Foreign Assistance Search Committee today (8 October) to identify potential development partners and explore financing arrangements, according to officials at the Economic Relations Division (ERD).

The meeting will be chaired by ERD Secretary Shahriar Quader Siddique.

Dhaka-Chattogram highway expansion

Among the largest proposals is upgrading the 232.76-kilometre Dhaka-Chattogram highway to a six-lane access-controlled expressway at Tk71,850 crore, including Tk55,080 crore in foreign loans and Tk16,770 crore in government funding.

The project has received in-principle Planning Commission approval, with completion targeted for January 2027-December 2032, subject to financing.

The RHD has completed a feasibility study and detailed design for the six-lane expressway, with service lanes on both sides for local and slow-moving traffic and designated entry and exit points.

Existing intersections will be converted into interchanges, with flyovers and underpasses, while urban sections will be elevated to ease congestion.

The Asian Development Bank (ADB) has expressed interest but may not finance the project alone. An ADB-led co-financing arrangement with the Asian Infrastructure Investment Bank (AIIB) or Japan International Cooperation Agency (Jica) is therefore being considered, with the ERD to decide.

Cumilla-Brahmanbaria highway

The government is seeking a new development partner to four-lane the Cumilla (Mainamati)–Brahmanbaria (Dharakhar) national highway, dropped from India's third Line of Credit (LoC-III).

The project will cost Tk7,188.66 crore, including Tk4,378.67 crore in government funding and Tk2,810.65 crore in foreign loans. The government is considering multilateral and other development partners, with the ADB expressing preliminary interest.

The Mainamati-Sarail highway is a key link between Chattogram and Sylhet and is expected to support industrial and agriculture-based activities along the route.

Approved on 13 September 2022 under joint Bangladesh-India financing, the project was scheduled for 1 July 2022-30 June 2026 but remains incomplete. Once implemented, it is expected to increase road capacity and ease passenger and goods movement between the two regions.

Additional financing for Gabtoli-Narayanganj MRT

The government also plans to build MRT Line-2 from Gabtoli to Narayanganj, with a branch from Nayabazar to Sadarghat. The project is estimated to cost Tk60,962 crore, including Tk45,924 crore in proposed foreign financing.

The World Bank has already agreed to provide a $72 million loan, but additional financing will be needed. The government will therefore approach other development partners for co-financing, with the project placed before the Foreign Assistance Search Committee to explore additional foreign loans.

300 electric buses procurement

The government plans to replace diesel-powered buses in the Bangladesh Road Transport Corporation (BRTC) fleet with electric buses under a Tk2,713 crore project proposed for July 2026-June 2029.

The project envisages procuring 300 air-conditioned single-decker electric buses, with the Road Transport and Highways Division overseeing implementation and BRTC as the executing agency.

The government will provide Tk703 crore, while Tk2,009.77 crore is proposed as a development partner loan, with South Korea's Economic Development Cooperation Fund (EDCF) named as the potential financier.

Solar power, urban projects

The government is also planning to establish two 60MW solar power plants in Payra, Patuakhali, and Munshiganj to expand the use of renewable energy, at a combined estimated cost of around Tk1,505 crore, with foreign financing proposed for both projects.

The Payra solar power plant has an estimated cost of Tk783 crore, while the proposed Munshiganj plant is expected to cost Tk718.72 crore.

Proposals for foreign financing for three urban development projects will also be placed before the committee.

These include Tk36.85 crore for the "Integrated Project for Revitalization of Old Dhaka", Tk4,447 crore for the "Rayerbazar Sewerage System Development Project" and Tk3,050 crore for the "Urban Water Supply and Sanitation Project in Selected City Corporations and Municipalities of Bangladesh (UWSSP)".

The ERD will assess potential development partners and financing options for the projects before proceeding with negotiations with the respective lenders.

Inflation rose to 8.34 percent in September from 8.26 percent in August, ending two consecutive months of gradual easing as higher food costs pushed up overall consumer prices.

Food inflation increased to 7.22 percent last month from 7.02 percent in August, according to data released by the Bangladesh Bureau of Statistics (BBS) yesterday.
In contrast, non-food inflation eased slightly, falling from 9.32 percent in August to 9.30 percent in September.

Following the fuel price hike in the third week of September, price pressures mounted in both rural and urban areas. Rural households, however, faced higher price increases, with inflation rising to 8.38 percent last month, compared with 8.26 percent in cities.

Despite the monthly rise, September inflation was lower than the 8.36 percent recorded in the same month last year.

This means the disinflation process remains fragile, according to Deen Islam, a professor at the Department of Economics at Dhaka University.

Fahmida Khatun, a distinguished fellow at local think tank Centre for Policy Dialogue (CPD), said, “A small year-on-year decline in inflation is a good sign. But this does not mean prices have fallen.”

“People’s living standards will improve only when price hikes ease consistently for a longer period and wages begin to catch up,” she said.

Sectoral inflation data for September showed notable cost increases across key spending categories.

Restaurant and hotel prices recorded the steepest increase at 13.26 percent, up from 12.49 percent in August. Housing and utility expenses rose by 9.81 percent, while transport costs increased by 9.46 percent.

Over the 12-month period to September, the national moving average inflation rate stood at 8.65 percent.

For the current fiscal year, the Bangladesh Bank (BB) set an inflation target of 7.5 percent. The central bank in late September kept its main interest rate unchanged at 9.5 percent for the October-December quarter, saying inflation risks remained large and the economy was weak.

The BB said the risks included higher global energy prices, the ongoing conflict in the Middle East, the recent fuel price hike and implementation of the new pay scale for public employees.

The central bank said it would wait and watch before cutting rates again. On August 2 this year, the BB lowered the policy rate by half a percentage point to 9.5 percent after years of tightening.

According to the recently released World Bank’s South Asia Economic Update, inflation is projected to remain high at 8.6 percent in fiscal year 2026-27, staying above the BB’s target.

The Washington-based multilateral lender says surges in global energy prices, higher import costs and local currency depreciation are behind stubbornly high inflation in Bangladesh.

The World Bank said Bangladesh is South Asia’s most dependent economy on fertiliser imports, with such imports exceeding 0.4 percent of GDP, making its agricultural sector and food prices vulnerable to spikes in input costs.

The lender noted that Bangladesh used fuel subsidies to slow the direct pass-through of global oil price increases into domestic retail consumer prices as it sought to tackle inflation.

Prof Deen Islam said the government’s immediate priority should be to ensure that persistent high inflation does not impose a disproportionate burden on low-income households.

“Monetary and fiscal policies need to work together, while targeted social protection should shield the most vulnerable from the effects of elevated food and essential-service prices,” he added.
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Similarly, Fahmida said the government should expand social safety net programmes during this difficult time.

“Programmes such as open market sales (OMS) should be available to poor and low-income households. Targeted energy subsidies should be given to vulnerable households,” said the economist.

Finance Minister Amir Khosru Mahmud Chowdhury today (Tuesday) expressed his confidence that the National Board of Revenue (NBR) would be able to meet its revenue collection target for the current fiscal year.

"We hope we will be able to meet the target that has been set, Insha Allah. The NBR officials are geared up, energized and working hard," he said, BSS reports.

The Finance Minister was responding to the questions of journalists after holding a meeting with National Board of Revenue officials at the NBR's Agargaon headquarters today.

Asked about the decline in VAT collection during the first one and a half months of the current fiscal year compared with the same period last year, Khosru said it was too early to draw conclusions as taxation is a gradual growth.

"Judgment cannot be made within one and a half months. There can be some problems at the beginning. Growth comes later, gradually," he said.

The finance minister also said the problems affecting revenue collection have existed for a long time and cannot be resolved overnight.

"Tax collection is slowly picking up. We have to encourage people to pay taxes. There have been problems on both sides for a long time. We are trying to ensure that people can pay taxes without being harassed," he said.

"It's working reasonably well and improving, although there is still room for further improvement," he added.

About the latest growth projections by the World Bank, Amir Khosru Mahmud Chowdhury has responded with a "wait and see" approach to the World Bank's forecast that Bangladesh's GDP growth will slow to 3.4% in FY27.

"Wait and see," Khosru replied.

In its latest South Asia Economic Update, released today, the World Bank revised down Bangladesh's GDP growth forecast for FY27 by 1.2 percentage points to 3.4%. Its forecast for FY26 was also revised down by 0.5 percentage points to 3.4%.

The World Bank projects South Asia's growth to rise to 6.9% in 2026 before moderating to 6.7% in 2027.