Austria has proposed € 5.0 million in export credit with a view to expanding its trade relation with Bangladesh which is now being scrutinised by the government, officials said.
An Austrian trade delegation gave the loan proposal during their recent visit to Bangladesh.
Finance Minister AMA Muhith has sent a letter to Bangladesh Bank (BB) and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) along with the Austrian proposal.
The finance minister in his letter said a trade delegation from Austrian business community visited Dhaka aiming to expand their trade in Bangladesh. The delegation said they want to make contributions to the global trade as they have managed a large export credit on soft conditions.
According to the proposal for soft loan under the Austrian Export Promotion Scheme, the size of loan is five-million-euro. Of the total, some 90 per cent is loan and some 10 per cent is grant. The tenure of the loan is 27 and half years with nine-and-half-year grace period. But the rate of interest on the credit has not been mentioned in the proposal.
The loan will have to be repaid by 36 semi-annual installments. Some 0.80 per cent is guarantee charge, according to the proposal.
The bilateral trade between Bangladesh and Austria is over US $ 400 million and Bangladesh's export to Austria is around US $ 360 million (per Aus statistics), according to the data of embassy and permanent mission of Bangladesh, Austria.
However, the trade figure posted by Export Promotion Bureau of Bangladesh is much less, which is in the vicinity of US $ 100 million with Bangladesh's export of US $ 60 million.
Although bilateral trade between the two countries is growing steadily with Bangladesh's ready-made garment (RMG) topping the list of the products traded, there is a further scope for increasing Bangladesh's export to Austria with export items like leather products, home textiles, handicrafts, frozen food, pharmaceuticals etc.
Similarly, Austrian export to Bangladesh could be increased further.
"We have sent the soft loan proposal to BB and FBCCI. We have yet to take any decision in this regard. It is now at initial stage," a senior official of the finance ministry said.
© 2024 - All Rights with The Financial Express
