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The government has increased the cash incentive for the export-oriented textile sector to 5 percent from 1.5 percent for the 2026-27 fiscal year to encourage the use of locally produced raw materials and boost export competitiveness.
The Foreign Exchange Policy Department (FEPD) of the Bangladesh Bank issued the revised directive on Sunday through Circular No. 19, amending FEPD Circular No. 17 issued on July 5, 2026.
The enhanced incentive applies to the existing alternative cash assistance scheme and is aimed at supporting exporters that source yarn, fabrics and other raw materials from local manufacturers instead of using bonded warehouse facilities or duty drawback schemes.
Eligible exporters must be members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) or other recognised trade bodies. They must also submit documentary proof that eligible raw materials were sourced locally.
Bangladesh Bank said the revised incentive does not change existing verification procedures, and exporters must continue to comply with current regulations governing local sourcing.
The 5 percent cash incentive will apply to eligible export shipments made between July 1, 2026, and June 30, 2027, with the directive taking immediate effect.