The government moves to offer cash subsidy on some more products in the new-market- expansion category to encourage businesses to expand country's export trade.
Presently, only apparel items enjoy the facility.
Officials said the ministry of finance (MoF) recently asked the ministry of commerce (MoC) to find out the products suitable for receiving subsidy in the new-market expansion category as Bangladesh's export sector is now dependent on traditional markets and narrow product basket.
Sources said the MoC later engaged the export promotion bureau (EPB) to list out the products having the potential to trade on newer markets.
Presently, the apparel sector gets an additional 3.0 per cent cash incentives for exporting goods to destinations other than the USA, Canada, and European Union. The government introduced the provision to encourage exporters to discover new markets instead of completely remain dependent on traditional ones.
For sending goods to traditional markets the apparel-makers receive 4.0 per cent cash subsidy annually.
A senior MoC official told the FE that country's export earnings would not see significant boost unless goods are exported to new markets and new products are included in the product basket.
"With the thin product basket we won't be able to do a lot. So we want to promote new products and new markets," he said.
He mentioned that, presently, some 27 export-oriented sectors enjoy export subsidy or cash incentives.
The government may include some of the 27 sectors in the list to be given cash incentives for exporting goods to new markets, he noted.
For the fiscal year 2017-18 the government earmarked some Tk 45 billion as cash incentives/subsidy for the country's export-oriented sectors. Of the total sum of perks, Tk 40 billion is kept for entire export sector while Tk 5.0 billion is for jute and jute-goods sector alone.
Presently, the export-oriented sectors enjoy cash incentives ranging between 2.0 per cent and 20 per cent.
The items are jute products, halal meat, potato, active pharmaceutical ingredients (API), agro-products, frozen fish, handicraft items made out of elephant grass (hogla), paddy straw (khor) and sugarcane bark (akher chobra), leather products, export-oriented apparel sector, plastic goods, locally produced paper and paper-related products, software, and information technology-enabled services and hardware.
According to officials, the MoF also asked the MoC to examine a proposal regarding the lowering of the value-addition criteria for active pharmaceutical ingredients to enjoy export subsidy and include it in the export policy.
The finance also asked for checking whether the cash subsidy can be offered to export- oriented garment accessories and packaging industry for their boost.
For the current fiscal year the government has set export-earning target at US$41 billion against last fiscal's achievement of $34.8 billion.
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