Think tank urges Bangladesh to end export incentives by 2028

Bangladesh's leading policy research organisation has called for the elimination of export cash incentives within the next few years, signalling growing concern about the long-term viability of the subsidy programme that has supported the country's export sector for decades.

The Centre for Policy Dialogue made the recommendation as policymakers grapple with budgetary constraints and the need to redirect resources toward other developmental priorities. The think tank argues that maintaining the incentive scheme places a significant burden on government finances while potentially distorting market mechanisms.

The export cash incentive programme, which provides direct financial support to exporters based on shipment values, has been instrumental in promoting Bangladesh's trade competitiveness. However, critics contend that the scheme has created dependencies among exporters and may no longer align with the country's evolving economic needs.

Industry observers note that any transition away from the incentive structure would require careful coordination with export-oriented sectors, including the garment industry, to minimise disruption. The government would likely need to develop alternative support mechanisms or structural reforms to help exporters adapt to market conditions without direct subsidies.

The policy recommendation comes amid broader discussions about fiscal sustainability and economic reform in Bangladesh, as the nation seeks to balance its development objectives with budgetary realities.