Bangladesh decides on increasing incentive to support its RMG sector

The Bangladesh Ministry of finance has decided to give more cash incentive for all types of ready-made garment (RMG) items. The decision was taken to lessen the losses incurred by RMG exporters due to the political turmoil last year as the apparel sector, contributes to about 80 percent of the country’s total export.

Cash incentive at the rate of 0.25 percent on the FOB value of export will be given of all types of RMG items which according to Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), need to be increased to at least 1.0 percent.

Currently, exporters from small and medium industries in textiles sector as well as export-oriented local textile sector against use of local yarn are getting cash incentive of 5.0 per cent.

Besides, apparel exporters will get additional 1.0 percent more cash incentive for expanding their businesses to new markets and exporting new products to countries other than the United States, Canada and the European Union. Currently they are getting 2.0 percent which is now being 3.0 percent.

The cash incentives scheme is effective from January 1 this year to June 30, 2014. A circular will be issued in this connection.

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