Dhaka: Bangladesh Bank (BB) has announced a new policy allowing export incentives or cash assistance for garments and textiles manufactured and exported through sub-contracting processes. Under this new regulation, sub-contracted production and export activities will benefit from incentives at the same rate and under the same conditions as those granted to main ready-made garment manufacturers.
According to Bangladesh Sangbad Sangstha, this development marks a significant shift from previous policies where cash assistance was typically provided to producer-exporter entities based on the Net FOB value of garments or textiles produced within their own facilities. The new policy stipulates that producer-exporter companies using sub-contracting must meet certain conditions to qualify for these benefits.
The BB circular outlines that eligible firms must have their own operational factories to receive cash assistance on the Net FOB value of exported garments or textiles produced through sub-contracting. Moreover, the sub-contracting process must adhere to the Sub-Contracting Guideline for the Readymade Garment Industry – 2019 and the Rules for Direct Export-Oriented Garment Establishments (Temporary Import under Warehouse System, Warehouse Management, and Procedures) 2024.
It is important to note that trading firms or companies that do not engage in production are not eligible for this facility. The directive is effective immediately for products shipped or vessel-loaded from the date of the circular’s issuance.