The Bangladesh Securities and Exchange Commission (BSEC) has approved the draft prospectuses of three closed-end mutual funds, with a combined target size of Tk75 crore, marking a fresh boost for the capital market amid a slowdown in new product launches.

The approval was given at a commission meeting held at the regulator's office yesterday, according to a press release.

The approved funds are Midland Bank Growth Fund, Midland Bank Balanced Fund, and the Shariah-based Sandhani AML SLFL Shariah Fund.

Market participants have welcomed the move, describing it as a positive signal at a time when the introduction of new investment products in the capital market has remained sluggish.

According to the press release, the initial target size of the Midland Bank Growth Fund has been set at Tk25 crore. As the sponsor, Midland Bank PLC has invested Tk2.5 crore in the fund, while the remaining Tk22.5 crore will be raised from general investors. The fund's unit face value has been fixed at Tk10.

Midland Bank Asset Management Company Limited will act as the asset manager of the fund. Sandhani Life Insurance Company Limited will serve as the trustee, while Commercial Bank of Ceylon PLC will act as the custodian.

At the same meeting, the commission also approved the draft prospectus and abridged version of the Midland Bank Balanced Fund. The fund's initial target size has also been set at Tk25 crore. Midland Bank PLC, as the sponsor, will contribute Tk2.5 crore, and the remaining Tk22.5 crore will be offered to general investors. The unit face value of the fund has been fixed at Tk10.

Midland Bank Asset Management Company Limited will serve as the asset manager, while Sandhani Life Insurance Company Limited and Commercial Bank of Ceylon PLC will act as the trustee and custodian, respectively.

In addition, the commission approved the draft prospectus of the Shariah-based closed-end mutual fund Sandhani AML SLFL Shariah Fund. The fund's initial target size has been set at Tk25 crore. The sponsor, Sandhani Life Finance Limited, will invest Tk2.5 crore, while the remaining Tk22.5 crore will be raised from general investors. The unit face value of the fund has also been fixed at Tk10.

Sandhani Asset Management Limited will act as the asset manager of the fund. Bangladesh General Insurance Company PLC will serve as the trustee, and Commercial Bank of Ceylon PLC will act as the custodian.

Market insiders said the approval of three closed-end mutual funds at a single meeting could help channel fresh long-term funds into the capital market. Mutual funds are widely regarded by investors as relatively safer, professionally managed investment vehicles, particularly for long-term investment.

The approval of a Shariah-based fund is also expected to create new opportunities for investors seeking Islamic investment products.

The benchmark index of the Dhaka Stock Exchange (DSE) closed marginally higher yesterday as a strong rally in insurance stocks helped pull the broader market into positive territory, despite mixed performances across other sectors.

Investors showed renewed interest in both general and life insurance shares, which provided the key support to the market at a time when overall participation remained moderate.

The DSEX ended the session up by 4 points, or 0.09%, at 4,946, while the blue-chip DS30 index gained 1.37 points, or 0.07%, to settle at 1,899.

Market breadth was nearly balanced, with 159 issues advancing, 156 declining and 75 remaining unchanged, reflecting a cautious but selective trading pattern.

Turnover improved by around 10% from the previous session, rising to Tk386 crore, as investors became more active in a handful of sectors and stocks.

According to the daily market review of LankaBangla Securities, general insurance stocks dominated the trading floor, accounting for the highest share of total turnover.

This heavy concentration of trading value underscored the renewed speculative and institutional interest in the sector. Mutual funds and pharmaceutical stocks followed, although their turnover shares were far lower compared to insurance counters, LankaBangla said.

Sector-wise, general insurance posted the strongest return of the day, rising by 2.06%, while life insurance also performed well, gaining 1.15%. These gains played a decisive role in lifting the benchmark index, as several insurance stocks experienced sharp price jumps.

Non-bank financial institutions and pharmaceutical companies also ended the day in positive territory, each advancing by 0.29%, supported by selective buying in fundamentally strong names.

However, not all sectors shared the upbeat tone. Paper and printing stocks slipped by 0.65%, mutual funds fell by 0.64% and jute declined by 0.45%, as investors booked profits and remained cautious about near-term prospects in these segments.

The mixed sectoral performance highlighted the lack of a broad-based rally, with the market largely driven by insurance-led momentum.

Square Pharmaceuticals, Orion Infusion, Dominage Steel, City Bank and Fine Foods emerged as the top turnover leaders, reflecting continued investor focus on liquid and widely followed stocks.

On the gainers' board, Fareast Finance led the rally, followed by Paramount Insurance, FAS Finance, Peoples Leasing and Bangladesh Welding, many of which benefited from speculative demand.

In contrast, Beach Hatchery topped the losers' list, while BIFC, Alif Industries, International Leasing and GQ Ball Pen also posted notable declines.

The Chittagong Stock Exchange echoed the positive trend, with both of its indices closing higher, although turnover dropped sharply to Tk5.66 crore.

State-owned Sonali Bank achieved a milestone in 2025 by recording its highest-ever operating profit of Tk8,017.35 crore, representing a substantial increase of Tk2,322.80 crore over the previous year.

The figures were disclosed by the bank's managing director and chief executive officer, Md Shawkat Ali Khan, during a press briefing held at the bank's headquarters in Dhaka's Motijheel today (13 January).

Shawkat noted that the bank's operating profit in 2024 stood at Tk5,694.55 crore, and he expressed optimism that the net profit for 2025 would exceed Tk1,500 crore after necessary provisioning.

A significant highlight of the year was the bank successfully addressing its chronic capital deficit. "For a long time, capital shortfall was a major challenge for state-owned banks," the MD said. "As of this year, Sonali Bank no longer has a capital deficit. Being free from this burden is a massive achievement for us."

The bank's Capital to Risk-Weighted Assets Ratio now exceeds the minimum regulatory requirement of 10%, providing a strong foundation for future business expansion.

On asset quality, Shawkat said the bank's non-performing loan (NPL) ratio had fallen to 15.4% as of 25 December. The bank aims to reduce this to 11-12% by 2026 and bring it down to single digits within the next three years, between 2026 and 2027, he said.

The MD said that Tk745 crore has already been recovered from the top 20 defaulters, with further recovery processes ongoing. "To mitigate risk, the bank is also decentralising its loan portfolio."

Currently, 37% of total loans are concentrated in five branches; these are being gradually shifted to other branches to reduce credit concentration, he said.

Despite the record profits, the bank still has significant outstanding receivables from various government entities. Specifically, Sonali Bank is owed approximately Tk5,500 crore in LC (Letter of Credit) commissions for its role as the sole financier of the Rooppur Nuclear Power Plant project. "Recovery of these funds will further strengthen our capital base," Shawkat noted.

Reflecting on past challenges, the MD said that no major irregularities have occurred since the Hallmark scandal, attributing the current stability to strict credit appraisal and improved corporate governance.

Bangladesh’s economy rebounded in the first quarter of the current fiscal year of 2025-26 due mainly to stronger agricultural and industrial production.

The overall output, or Gross Domestic Product (GDP), which measures the total value of goods and services produced in a given period grew by 4.50 percent in July-September, according to estimates from the Bangladesh Bureau of Statistics (BBS) released yesterday.

This rate is higher than the 2.58 percent quarterly growth a year earlier.

The industrial sector led the expansion of the economy, posting 6.97 percent growth in the first quarter of FY26. The latest industrial growth is almost double the 3.59 percent recorded during the same period last year, when production was hit hard by mass uprisings and labour unrest.

Factory floors this year were noticeably busier compared with the corresponding quarter.

Agriculture, the largest employer in the economy, expanded by 2.3 percent, recovering from losses caused by repeated floods in 2024. The services sector, the country’s second-largest employer, also grew during the first quarter.

“This is an encouraging sign,” said Prof Mustafizur Rahman, distinguished fellow at local think tank Centre for Policy Dialogue (CPD). “The growth shows signs of recovery as the difference from last year is high.”

Rahman, however, said that this improvement is based on a low growth base from last year. And the growth in the service sector is not big, while agricultural output depends on the weather.

“There is a challenge in the sustainability of the growth,” said the economist.

Although the performance in the industrial sector was strong, export-oriented industries did not do well in the second quarter of the current fiscal year, which could have a negative impact, said Rahman.

Besides, imports of machinery and raw materials for export-oriented industries have not increased despite revived imports of capital machinery. “So, we have to wait to see whether this is a full recovery of the economy or not,” he added.

Zahid Hussain, another noted economist, described the overall recovery as “modest” compared with Bangladesh’s historical growth.

He said, “In the overall growth rate, a large contribution came from the agricultural sector.” BBS data showed agricultural growth of 2.30 percent, up sharply from a negative 0.6 percent in the first quarter of the previous fiscal year.

Farming growth in the same quarter was also slight in 2023-24, at only 0.62 percent.

Last year, floods heavily affected Aus rice and Aman seedbeds, but this year production rebounded, said Hussain, a former lead economist at the World Bank’s Dhaka office.

Hussain said the sustainability of growth will depend on electricity supply and diesel availability.

According to him, while fuel imports are stable, electricity generation remains a concern. Investment remains lacklustre, and exports have slowed, adding to the challenges.

Historically, growth in the services sector ranges between 5 percent and 6 percent, higher than the current trend.

Disruptions from year-round street protests and a weak law and order situation have had a huge impact on services. High inflation has also reduced people’s purchasing power, limiting consumption of services, he added.

Headline inflation reached 8.49 percent in December, up from 8.29 percent in November and October’s 39-month low of 8.17 percent, according to BBS data.

AkijBashir Cables is introducing Bangladesh's first three-layer house wiring cable, which sets a new benchmark for insulation resistance, durability and long-term performance.

In an interview with The Business Standard, Khorshed Alam, chief operating officer of Akij Bashir Group, discusses the group's entry into Bangladesh's cable and wire market, outlining its investment rationale, growth ambitions and focus on safety, quality and local manufacturing. The interview was conducted by Abbas Uddin Noyon, chief reporter of TBS.

What motivated AkijBashir Group to enter the cable and electric wire industry at this point, and why did you choose Eminence Electric Wire & Cables Ltd for acquisition?

Bangladesh is at a stage where infrastructure development, urbanisation and industrial expansion are all accelerating simultaneously. Reliable power transmission and safe electrical connectivity have therefore become critical national needs. As a diversified industrial group, AkijBashir sees the cable and electric wire segment as strategically aligned with our long-term vision of supporting national development through essential manufacturing.

From a business-structure perspective, our building materials division already contributes more than 60% of the group's overall portfolio. Our strategic objective has been to expand this division further so that we can offer most, if not all, key construction-related products under one trusted umbrella. Entering the cable industry is a natural extension of that strategy.

In our market research, we also identified clear gaps. On one side, certain dominant players have created unhealthy market dynamics, while on the other, several suppliers struggle with consistency and reliable delivery. We felt there was room for a credible, quality-driven player with a strong commitment to standards and supply assurance. Eminence Electric Wire & Cables Ltd offered an established manufacturing base, skilled workforce, and a compliance-oriented culture, allowing us to scale quickly without compromising quality.

How do you assess the current size and future potential of Bangladesh's cable industry?

In volume terms, the cable industry is already a large market, roughly estimated at around Tk12,000 crore. The growth outlook is strong, supported by public infrastructure projects, real estate development, industrial expansion, and rising safety awareness among consumers.

We believe the industry can sustain annual growth of 10-15% over the next 10 to 15 years, barring short-term disruptions. Another important trend is the gradual replacement of substandard cables with certified, higher-quality products. There is also scope for import substitution as local manufacturers adopt better technology. With advanced production facilities and new features, we want to meet rising customer expectations and energise the market.

What are your short- and long-term strategic goals for this venture in terms of market position and branding?

In the short term, our priority is operational stability, ensuring consistent quality, reliable supply, and strong distribution across key domestic markets. We want the brand to stand for safety, reliability and value from the outset.

In the long term, our plan is to expand the product portfolio, invest in advanced manufacturing technology, and gradually explore export opportunities. Ultimately, our goal is to position AkijBashir Cables among the leading players in the national market, with a reputation comparable to top regional brands.

What level of investment has gone into acquisition and expansion, and how has it been financed?

The investment includes both the acquisition of Eminence Electric Wire & Cables Ltd and capital expenditure for modernisation, capacity expansion and quality assurance systems. While we are not disclosing exact figures at this stage, it represents a substantial long-term commitment.

The project has been primarily financed through AkijBashir Group's own funds, reflecting our strong balance sheet and confidence in the sector. We are also receiving support from our valued financial partner, Jamuna Bank.

What production capacity are you targeting initially, and how will you scale up?

Initially, we are targeting a capacity of around 300 tonnes of copper cables and 200 tonnes of aluminium cables. The facility has been designed with scalability in mind, allowing us to expand capacity in phases. In the near term, we aim to increase this to around 600 tonnes of copper and 300 tonnes of aluminium as demand grows, both domestically and potentially in export markets.

How many jobs has this venture created so far?

Employment generation is a key part of our contribution. With the launch of AkijBashir Cables and our three-layer cable technology, we have already created employment opportunities for more than 700 people across manufacturing, quality control, logistics and sales. Our nationwide distribution network also supports significant indirect employment across Bangladesh.

What distinguishes AkijBashir Cables from existing competitors?

The most important distinction is our focus on safety and quality. AkijBashir Cables is introducing Bangladesh's first three-layer house wiring cable, which sets a new benchmark for insulation resistance, durability and long-term performance. This structure significantly reduces the risk of short circuits and current leakage and can withstand temperatures of up to 105 degrees Celsius, features not commonly available in the local market.

We believe fire risk linked to electrical wiring is a serious concern. While cables are often blamed, the real issue lies in raw material purity, manufacturing standards, and proper application. We source copper from LME-approved suppliers with 99.9% purity and use high-grade PVC from authenticated sources. We are fully committed to maintaining international standards.

Can improved local manufacturing reduce dependence on imported cables for major projects?

In the initial phase, our focus is on domestic, industrial and communication cables, including underground applications as urbanisation increases. More specialised, high-technology cables required for mega projects will come in our second phase. However, our long-term vision is clearly to reduce import dependence by developing advanced local manufacturing capabilities.

Pricing is always a concern for consumers. How will you balance quality and affordability?

High-quality raw materials inevitably cost more. For example, sourcing copper from LME-approved suppliers can be 30-40% more expensive than non-certified alternatives. But this purity directly impacts safety and longevity.

That said, we are very conscious of market realities. Our pricing strategy will remain competitive and aligned with existing products, without compromising quality. We believe consumers are increasingly willing to pay a fair price for safety and reliability.

Where are your machinery and raw materials sourced from?

The factory we acquired was already well-equipped with world-class machinery sourced from Europe, Germany, China and India. For raw materials, copper will be sourced mainly from Singapore, while PVC will come from China and partly from India.

Who are your initial target customers?

Our primary focus is domestic wiring, followed by industrial and communication cables. Given AkijBashir Group's strong brand acceptance among general consumers, we see domestic cables as a natural starting point. Gradually, we will move into higher-voltage and specialised cable segments.

Foreign investors' trading activity on the Dhaka Stock Exchange (DSE) dropped sharply in 2025, with turnover falling to one of its lowest levels in recent years, reflecting cautious sentiment, year-end portfolio rebalancing and long-standing structural constraints in Bangladesh's capital market.

Data from the DSE and brokerage houses indicate that foreign turnover remained subdued throughout the year, deteriorating significantly towards the end.

Monthly foreign turnover stood at just $5 million as of 15 December, a steep decline compared to $30 million in October and $22 million in November. Earlier in the year, foreign activity showed intermittent strength, peaking at $41 million in May and $40 million in July, but those gains proved short-lived as global investors gradually reduced exposure.

December saw a pronounced sell-off in several heavyweight stocks, contributing to a sharp net decline in foreign holdings. According to the monthly shareholding report, foreign investors sold shares worth around Tk120 crore during the month, while purchases amounted to only about Tk2 crore, resulting in a significant net outflow. Most of the selling pressure was concentrated in a handful of large-cap stocks that traditionally attract foreign interest.

Summit Alliance Port experienced the largest reduction in foreign ownership, with holdings dropping by 3.68 percentage points, equivalent to roughly Tk38 crore. Grameenphone also saw foreign stakes fall by 0.07 percentage points, translating into sales of about Tk24 crore. City Bank recorded a notable decline of 0.64 percentage points, worth Tk25.22 crore, while Square Pharmaceuticals, BRAC Bank and Renata also witnessed moderate reductions in foreign shareholding.

Despite the broader trend of selling, a small number of companies recorded marginal increases in foreign stakes during December. These included Beximco Pharmaceuticals, Prime Bank, National Bank, Orion Infusion, LankaBangla Finance and Orion Pharma, although the absolute value of these increases remained modest and insufficient to offset overall outflows.

Market participants said the recent decline in foreign activity reflects a combination of stock-specific exits and routine portfolio adjustments rather than a fundamental loss of confidence in Bangladesh's equity market.

Norway's sovereign wealth fund, along with a limited number of UAE- and EU-based institutions, remains among the key foreign players active in the market, according to industry insiders.

A managing director of a leading brokerage firm said foreign investors continue to face constraints due to the limited scope for diversification. Bangladesh has a relatively small pool of investable large-cap stocks that meet the governance, liquidity and risk standards required by global institutional funds. As a result, even modest changes in allocation decisions can have an outsized impact on foreign turnover figures.

Another brokerage chief executive noted that December is traditionally a period of portfolio rebalancing, as foreign institutions prepare year-end financial statements and realign holdings in line with global asset allocation strategies. Such adjustments often lead to temporary outflows from frontier and emerging markets, particularly when investors seek to lock in profits or reduce exposure to perceived risks.

He added that foreign inflows could recover if the country's political and economic situation stabilises further in the coming months.

Analysts also pointed to structural challenges linked to global index inclusion. Many international funds track FTSE equity country benchmarks, and Bangladesh's partial exclusion from these indices continues to weigh on sustained foreign participation. The country was removed from FTSE indices following the imposition of floor prices on stock movements, which disrupted price discovery and liquidity.

Although the Bangladesh Securities and Exchange Commission has lifted most of those restrictions since early last year, floor prices remain in place for two companies, keeping them outside the FTSE universe.

Currently, total foreign investment in the DSE stands at around Tk13,000 crore, with only about 36% of listed companies having any foreign shareholding.

In its November 2025 review, MSCI made no changes to Bangladesh's market classification, while 42 DSE-listed companies remain included in the FTSE Frontier Index.

Bangladesh's current account balance deteriorated further in the first five months of the current fiscal year 2025-26, even though remittance inflows crossed $13 billion, due mainly to a widening trade deficit caused by higher imports and weak export growth.

According to the Balance of Payments (BOP) data released by the Bangladesh Bank today (13 January), the current account deficit stood at $696 million during July-November of FY26, compared to a deficit of $568 million in the same period of FY25.

Economists and central bank officials said the higher deficit reflects a sharp increase in imports, while exports failed to keep pace.

A senior Bangladesh Bank official said higher imports of crude petroleum, refined petroleum products, fertiliser and capital machinery were the main drivers of the import surge. Crude petroleum imports rose by 37%, petroleum oil imports by 14% and fertiliser imports jumped from $960 million last year to $1.73 billion this year. Capital machinery imports also increased by nearly 10%.

Bangladesh Bank data show that the trade deficit rose by 18.52% year-on-year to $9.40 billion in July-November FY26, up from $7.94 billion in the same period last year. Imports during the period increased by 6.10% to $27.60 billion, while exports grew by only 0.60% to $18.19 billion.

The current account is a key component of the BOP, capturing a country's net trade in goods and services, income from abroad and current transfers such as remittances. Analysts noted that while strong remittance inflows often cushion the current account, a large trade deficit can still push the balance into deeper negative territory.

In FY26's first five months, remittances were around $2 billion higher than in the same period last year. However, the trade deficit was roughly $1.5 billion wider than a year earlier, offsetting much of the remittance gain and worsening the current account position.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, told TBS, the deterioration was primarily driven by the trade deficit. "Imports have increased, which in itself is not bad for the economy, but exports have not grown accordingly. In fact, export growth has fallen to below 1%, which has widened the trade deficit and hit the current account," he said.

The economist added, "An increase in imports is not a bad thing for the economy; rather, it is a sign of a healthy economy. A decline in exports, however, is detrimental. Therefore, I believe it is essential to work on increasing the country's exports in the coming days."

Financial account in surplus

Despite the current account deficit, Bangladesh's financial account recorded a surplus of $1.23 billion in the first five months of FY26, a significant turnaround from a deficit of $1.01 billion in the same period last year. Economists attributed this improvement mainly to a surplus in trade credit and higher net aid inflows.

Trade credit stood at a surplus of $595 million during the period, compared to a deficit of $817 million a year earlier, while net aid inflows rose to $504 million from $269 million, marking an increase of more than 87% year-on-year.

Zahid Hussain said trade credit and net aid flows were the two key drivers behind the positive financial account. He noted that trade credit tends to turn negative when exports rise, but in the current context, weaker exports and higher deferred import payments have pushed it into surplus.

BOP remains positive

Thanks to the strong financial account surplus, Bangladesh's overall BOP recorded a surplus of $769 million in July-November FY26, compared to a deficit of $2.54 billion in the same period last year. Economists said the improvement highlights stronger external financing flows, even as pressures persist on the trade and current accounts.

However, analysts also pointed to a decline in short-term foreign borrowing by the private sector. According to economists, net repayments of short-term loans have increased as new borrowing has slowed, reflecting weak investment demand amid an economic slowdown.

Zahid Hussain said the fall in short-term borrowing does not indicate a lack of access to foreign credit, as reserves and dollar liquidity have improved and banks' credit lines have expanded. "Rather, it shows reduced demand for new loans due to sluggish private-sector investment," he said.

A commerce ministry report shows that under an Economic Partnership Agreement (EPA) with Japan, Bangladesh will initially benefit from duty-free access for a large number of products, but the balance will begin to shift in Japan's favour after six years.

Officials and experts acknowledge that there are revenue risks but also say phased duty reductions will limit the risks and give local industries time to strengthen.

They say the EPA will boost exports, attract investment, and support Bangladesh's development, while the agreement could also encourage other countries to pursue similar deals.

The commerce ministry report, a copy of which was obtained by The Business Standard, shows that when the agreement takes effect, 7,379 Bangladeshi products will receive duty-free access to the Japanese market, while 1,039 Japanese products will enjoy the same benefit in Bangladesh.

Although these figures initially favour Bangladesh, a further 2,702 Japanese products will gradually receive duty-free access to the Bangladeshi market within the next six to eight years.

At one stage, a total of 9,354 Japanese products will enter Bangladesh without tariffs, while 7,436 Bangladeshi products will enjoy duty-free access to the Japanese market.

Commerce Secretary Mahbubur Rahman said because duty reductions for various sectors are being phased in, it will take time for all Japanese products to gain tariff-free access.

"As a result, there is little risk of revenue loss or an oversupply of Japanese goods. By then, Bangladesh will have reached a competitive position in many sectors," he added.

He noted that Bangladesh must gradually adopt a lower import duty structure as most developed countries are reducing tariffs, leaving the country no alternative but to follow suit.

Mahbubur confirmed that the agreement will be signed on 6 February, with him and Commerce Adviser Sk Bashir Uddin expected to attend the signing ceremony in Tokyo.

However, a senior commerce ministry official, speaking on condition of anonymity, said there was uncertainty over signing the deal just five days before the national election.

Bangladesh's EPA with Japan could encourage other countries to engage similarly.
MA Razzaque, Chairman of Rapid

$248.34m revenue loss

The ministry report also estimates that Bangladesh could lose about $248.34 million a year in revenue if customs, supplementary, and regulatory duties on Japanese products were withdrawn.

At the same time, it warns that exports to Japan could fall by $250 million to $300 million after LDC graduation if an EPA is not signed and Bangladeshi goods face regular tariffs.

Most of the 1,039 Japanese products set to receive zero-duty access at the initial stage already enter Bangladesh at zero or 1% duty.

Good opportunity for RMG

At present, garments exported to Japan must meet double-stage transformation rules of origin, meaning at least two production stages must be completed in Bangladesh.

The report said once the EPA takes effect, Bangladeshi garments will be able to enter Japan from day one under single-stage transformation rules, requiring only one production stage in Bangladesh.

Due to phased process, there is little risk of revenue loss or an oversupply of Japanese goods.
Mahbubur Rahman, Commerce Secretary

Leather, agriculture, services

The report notes that 206 leather and leather goods products could later gain duty-free access to the Japanese market through further negotiations. However, the leather sector is considered highly sensitive by Japan and is not included in any of its free trade agreements or EPAs.

Most of Bangladesh's 1,259 agricultural products will not receive zero-duty access to Japan immediately after the deal is signed.

Under the WTO's sectoral classification, there are 155 service sectors. Under the EPA, Bangladesh will gain duty-free access for 120 service sectors in Japan, while Japan will receive the same benefit for 97 service sectors in Bangladesh.

Passenger cars

In the case of Japan's CKD (completely knocked-down) passenger cars, tariffs will be reduced gradually over 12 years before eventually allowing duty-free entry into the Bangladeshi market.

A senior commerce ministry official, speaking on condition of anonymity, said Japan had strongly pushed for immediate duty-free access for its cars, as Bangladesh is a major market for Japanese vehicles.

However, Bangladesh has not agreed to the proposal due to revenue concerns. Instead, Dhaka has offered Japan extended MFN status for vehicle exports, meaning that if Bangladesh grants duty-free access to cars from any other country, Japanese cars will automatically receive the same benefit, the official added.

What experts say

Mostafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, said the deal should not be judged solely on goods trade; services, investment, technology, and other factors are equally important.

"Although Japan will grant immediate zero-duty access for 7,379 Bangladeshi products, only a few are currently exported. To benefit fully, Bangladesh must boost supply capacity, diversify exports, and strengthen competitiveness," he said.

He explained that tariff concessions for Japanese products pose little threat to local industries.

"No Bangladeshi sectors face direct competition from imports from Japan. On the contrary, products currently imported under tariffs from other markets could, in future, enter duty-free from Japan, benefiting consumers and producers," he added.

The economist added that attracting Japanese investment is crucial, requiring a better business climate, one-stop services, reliable gas supply, improved port facilities, and shorter lead times.

Mostafizur also stressed focusing on services exports, including training nurses and medical technicians to meet Japan's demand for skilled workers.

MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), told TBS that the EPA with Japan has several positive aspects.

"Bangladesh exports the most RMG to Japan, so even after LDC graduation, these products will enter Japan duty-free. Without an EPA, Bangladeshi garments would face a 10% tariff after graduation," he said.

He added that Japan is a developed country and a globally recognised negotiator. "Bangladesh's EPA with Japan could encourage other countries to engage similarly."

Razzaque further said Japan is also a major investor, and with its push to reduce dependence on China, Bangladesh could emerge as a new destination for Japanese investment.

However, Razzaque cautioned about risks, noting that revenue loss is the main concern.

"The more Japanese products enter Bangladesh duty-free, the higher the risk to revenue. Local industries must also be strengthened. Moreover, if the agreement is not properly implemented, it could send a negative signal internationally," he added.

Former Tariff Commission member Mostafa Abid Khan said signing an EPA with Japan was a positive development, but it was too early to say how much Bangladesh's export sector would ultimately benefit.

"Japanese imports would not hurt Bangladesh if tariff policies for other countries were properly aligned," he told TBS. "Failure to adjust MFN (most favoured nation) rates could create a risk of trade diversion."

Government sees opportunity

The government believes the Japan deal will create new opportunities for trade, investment, and employment. It also hopes the agreement will reduce dependence on the European Union and the United States, while positioning Japan as a major export market.

Japan has notified the World Trade Organisation that it will extend GSP benefits to LDCs and graduating countries until 2029. Dhaka views the EPA as a long-term safeguard, as GSP is temporary while the EPA is a binding agreement.

Currently, 98.7% of Bangladeshi products enjoy duty-free and quota-free access to the Japanese market, and Japan is one of Bangladesh's key export destinations.

According to commerce ministry data, Bangladesh exported $1.4 billion worth of goods to Japan in FY25, while importing $1.8 billion in the same year.

Seven rounds of meetings

The Bangladesh-Japan EPA was launched under the ousted Awami League, with a joint research group identifying 17 priority sectors in a 27 December 2023 feasibility report.

Negotiations began in Dhaka on 19 May 2024 but stalled after the 5 August political change. The interim government revived talks in November 2024, setting a one-year signing target. Seven rounds of meetings preceded the commerce ministry's announcement of the deal signing.

The EPA aims to secure market access, expand services trade, and address post-LDC graduation challenges, marking Bangladesh's only bilateral deal beyond its pact with Bhutan.

Bangladesh's economic growth gained momentum in the first quarter of the 2025-26 fiscal year, with point-to-point GDP growth at constant prices rising to 4.50%, up from 2.58% in the same period of the previous fiscal year.

According to provisional quarterly estimates released by the Bangladesh Bureau of Statistics (BBS) yesterday (12 January), overall GDP growth at constant prices stood at 3.72% in the 2024–25 fiscal year.

However, the BBS noted that there are some differences between the provisional annual GDP estimates for 2024-25 and the quarterly estimates. These discrepancies will be adjusted through benchmarking in line with internationally accepted methods once the final GDP figures for the fiscal year are determined.

Sector-wise data show a notable recovery in agriculture. In the first quarter of 2025-26, agricultural growth reached 2.30%, compared to negative growth of 0.60% in the same quarter of the previous year.

Growth in the industrial sector strengthened further, recording 6.97% in the first quarter of the current fiscal year, nearly double the 3.59% growth posted in the corresponding quarter of 2024-25.

The services sector also saw an upward trend, with growth rising to 3.67% in the first quarter of 2025-26 from 2.96% a year earlier. The improvement was driven by a gradual increase in domestic demand and business activity.

The Bangladesh Bank's board approved a draft amendment to the Bangladesh Bank Ordinance 2025 in October as part of efforts to ensure the central bank's autonomy, but the amendment has yet to be implemented, even after three months, due to delays in obtaining final approval from the finance ministry.

The proposed changes to key appointments – particularly, the exclusion of government representatives from the central bank's board – have reportedly caused discontent among bureaucrats, contributing to the delay, according to an insider.

Against this backdrop, bankers at a meeting with the Bangladesh Bank on 11 January demanded swift implementation of legal reforms, including amendments to the Bank Company Act and the Bangladesh Bank Ordinance, to prevent a recurrence of the political interference seen under the previous regime.

During the meeting chaired by Bangladesh Bank Governor Ahsan H Mansur, bankers raised questions about the delay in implementing legal reforms. Nazma Mobarek, secretary of the Financial Institutions Division, was present at the meeting as the government representative.

Asked whether the central bank faced any political resistance in implementing the legal reforms, Governor Mansur told TBS that there had been no political interference, but some bureaucratic resistance on certain issues.

He said the key changes to the Bangladesh Bank Ordinance relate to the appointment and removal of the governor and deputy governors, board composition, and pay structure.

Mansur said the appointment and removal of top management would be conducted through an independent committee to ensure transparency and independence, noting that a political government would no longer be able to remove top officials solely through a notice and would instead have to follow due process.

Speaking to TBS on condition of anonymity, a managing director of a private commercial bank said the question was directed at the secretary, but she did not respond and left the meeting abruptly.

This was the first time a government representative had attended a bankers' meeting, but she left after bankers raised issues related to legal reforms, said the banker, warning that without the implementation of legal reforms to strengthen the central bank's autonomy, corruption in the banking sector could be repeated.

When contacted, Nazma Mobarek said a meeting was scheduled for 16 January to discuss the Bank Company Act and that work was underway on the Bangladesh Bank Ordinance.

The Bangladesh Bank's move to amend the Ordinance, in line with recommendations from the IMF, aims to shield the central bank from political interference and bring its governance in line with global best practices.

The draft amendment initially excluded government representatives from the central bank's board in line with international practice. At present, the Bangladesh Bank board includes three government representatives, a structure the governor said is not followed by any other central bank worldwide.

However, he said the Bangladesh Bank later included one government representative in the final draft, a move that drew objections from the IMF. "Despite the IMF's objection, we retained one government representative on the board, considering Bangladesh's context," he added.

Regarding pay structure, the governor said the draft amendment proposes an independent pay scale, a practice followed globally. He noted that the Bangladesh Bank earned a profit of Tk24,000 crore in 2025 – the highest among any organisation in the country.

"The central bank should therefore have an independent pay structure, with salaries higher than government levels but lower than those in private sector banks," he said, adding that while there is bureaucratic resistance over pay scale and board composition, the government is working to address the concerns.

On the proposed amendment to the Bank Company Act, the governor said some bank directors had opposed the requirement for 50% independent directors on boards. However, he argued that the provision ultimately benefits owners, as stronger governance improves bank performance.

Citing BRAC Bank as an example, he said the bank operates with 50% independent directors and has become one of the country's top-performing banks. The amendment, he added, would also reduce family dominance on boards, noting that bank owners have already seen how excessive family control has damaged institutions in the past.

Key reforms under amended Bangladesh Bank Ordinance

According to the draft, under a "double-layer" system for governor's appointment, a search committee will be formed, and the president will give the final approval. Decisions will be taken by a majority vote of the members present at the search committee meeting, and in the event of a tie, the presiding member will have the power to cast a second or casting vote.

The committee will include a former finance minister (chairperson), a former Bangladesh Bank governor or deputy governor, the comptroller and auditor general, the chairperson of the Public Service Commission, and two eminent citizens with expertise in economics, banking, or finance – at least one of whom must be a woman.

The governor's post will be upgraded from secretary to ministerial status.

The government will be legally restricted from dismissing the governor at will; the governor can only be removed through the same process used for removing a Supreme Court justice, which is a complex constitutional procedure.

The governor, deputy governors, and non-executive directors can only be removed by the Supreme Judicial Council for disqualification or gross misconduct.

The draft introduces major changes, including the restructuring of the Bangladesh Bank's board and the Monetary Policy Committee, with limited government officials' involvement.

It also clearly defines the Bangladesh Bank's mandate to ensure price and financial stability, granting it full policymaking, financial, operational, and personnel autonomy. Under the proposed ordinance, the Bangladesh Bank will become a statutory organisation.

The bank will manage its budget, allocate profits, and oversee monetary policy, financial supervision, and foreign exchange without interference. Direct government financing is restricted. Interest rates will be set by an independent Monetary Policy Committee.

The board will comprise the governor, two deputy governors, one government representative and five or six independent non-executive members with at least 15 years of relevant professional experience.

The ordinance was prepared in line with IMF recommendations as part of its $4.7 billion loan package, aiming to provide legal safeguards for the Bangladesh Bank's institutional, functional, financial, and personal autonomy, shielding it from undue political and private sector influence.

Major changes in the Bank Company Act

The Bangladesh Bank proposes limiting the number of directors from a single family and their affiliates on bank boards from five to two, and cutting a director's continuous term from 12 years to six, in a move to curb family influence in bank management.

Such dominance by certain board members has crippled the country's banking sector over the past 15-20 years, particularly during the Sheikh Hasina regime, leading to rampant loan scams, rising non-performing loans, and loss of public funds and trust.

Conglomerates such as S Alam gained control of multiple banks and withdrew thousands of crores of taka, much of which was allegedly laundered out of the country.

The central bank, in the final draft amendment of the Bank Company Act, also proposes to bar political figures from boards, ease foreign investors' shareholding limits, restrict one person from holding large stakes in multiple banks, and treat general and wilful defaulters equally.

The proposed draft amendment prohibits political figures – particularly government ministers, members of parliament, and mayors of city corporations – from serving as bank directors.

It also reduces the maximum number of directors in a bank company from 20 to 15 and requires that at least 50% of board members be independent directors, appointed from a panel prepared by the Bangladesh Bank.

While private importers must clear all customs duties before goods are released from port, two of the government's largest energy importers – Bangladesh Petroleum Corporation (BPC) and Petrobangla – have been lifting fuel consignments without paying upfront, leaving more than Tk34,000 crore in unpaid duties and taxes, according to customs officials.

The practice, they said, has severely hurt revenue collection at Chattogram Custom House, which handles most of the country's petroleum and liquefied natural gas (LNG) imports and relies heavily on payments from the two state-owned entities to meet its targets.

The biggest exposure is Petrobangla's LNG imports.

In an official letter dated 8 January, Chattogram Custom House demanded Tk22,048.62 crore in unpaid duties and taxes from Petrobangla for the period from 2021 to December 2025, alleging that LNG cargoes had been released without lawful assessment or payment.

According to the letter, obtained by The Business Standard, Petrobangla imported LNG under 408 bills of entry up to 30 November 2025. Duties amounting to Tk1,610.54 crore were paid against only 38 bills, while the remaining 370 consignments were cleared without payment.

The customs authority said this violated Sections 83, 84 and 90 of the Customs Act, 2023, which require importers to submit bills of entry, complete assessments and pay all applicable duties and taxes before goods are released.

"Petrobangla has been releasing LNG consignments by submitting bills of entry without paying duties or taxes, which is clearly contrary to the law," said Tafsir Uddin Bhuiyan, additional commissioner of Chattogram Custom House.

BPC's Tk12,347 crore exposure

BPC and its subsidiaries including Padma Oil Company, Meghna Petroleum, Jamuna Oil Company, Eastern Refinery and Standard Asiatic, have also built up large unpaid customs liabilities.

Between July 2020 and June 2025, these entities imported goods under 7,190 bills of entry, creating potential unpaid duties and taxes of Tk12,347 crore, customs officials said.

Show-cause and demand notices were issued for 695 bills, claiming Tk3,430.32 crore. BPC later paid Tk700 crore, but as of 29 October 2025, final demand notices were still outstanding on 578 bills amounting to Tk2,730.32 crore.

'Unequal system'

Customs officials said repeated reminders have failed to secure timely payments, forcing the authorities to issue final demand notices.

They said government-owned importers enjoy operational privileges that private firms do not, allowing them to clear goods without immediate duty payment.

"Private importers cannot release goods without paying duties. But state-owned entities do, and that gap is one reason we struggle to meet revenue targets," Tafsir Uddin said.

With Chattogram handling most fuel imports, any delay by BPC and Petrobangla directly hits national revenue performance, he added.

Energy expert Prof M Tamim said the two companies collect duties and taxes from consumers but fail to pass them on to the government.

"Releasing imports without paying duties is a clear irregularity," he said, urging the National Board of Revenue to intervene.

Why delay in payments

Petrobangla Director (Finance) Mizanur Rahman said LNG imports were previously subject to double taxation, with a 15% VAT at the import stage and another 15% during distribution.

"The government withdrew the 15% import-stage VAT in June 2025, leaving only a 2% advance income tax (AIT) and no customs duty on LNG imports," he told The Business Standard.

"We are now paying the AIT regularly. Most of the Tk22,048 crore dues relate to the period before June 2025."

A senior Petrobangla official said chronic delays in government subsidy payments were the main reason the company could not clear its tax liabilities.

"We sell gas at a subsidised rate of around Tk2 per unit. The government is supposed to reimburse that subsidy, but Finance Division delays have left us short of cash," the official said.

The situation worsened as the taka weakened and global LNG prices surged, sharply raising import bills, he added.

Petrobangla Chairman Mohammad Reznur Rahman said, "We are working with the NBR

and the Finance Division. Some arrears have already been paid, and once the subsidy is

disbursed, we will settle the remaining dues."

BPC's chairman and directors did not respond to calls for comment. However, a BPC official said the corporation's companies regularly pay their dues and that payments are withheld only when disputes arise over customs claims.

Duties waived in budget

Petrobangla Director (Finance) Mizanur Rahman said LNG imports were previously subject

to double taxation, with a 15% VAT at the import stage and another 15% during

distribution.

"The government withdrew the 15% import-stage VAT in June 2025, leaving only a 2%

advance income tax (AIT) and no customs duty on LNG imports," he told The Business

Standard.

"We are now paying the AIT regularly," he added, noting that the Tk22,048.62 crore in

dues had accumulated before June 2025.

The FY2025–26 budget withdrew import duties on several fuels, including diesel and natural gas, while granting concessions on CNG, NPG and LNG imports.

The import duty on natural gas was cut from 100% to zero, while duties on crude and partially refined petroleum, fuel oils, gas oil and other heavy oils were fully waived.

For CNG, NPG and LNG, the import duty was reduced from 10% to 5%.

The budget also proposed lowering the import duty on crude oil and oil derived from bituminous minerals from 5% to 1%.

For aviation fuels – including jet fuel, kerosene, naphtha, motor and aviation spirits, and white spirit – the duty was proposed to fall from 10% to 3%, with the same rate applied to light diesel and high-speed diesel.

The Dhaka Stock Exchange (DSE) has finalised the annual rebalancing of its benchmark index and the semi-annual rebalancing of its blue-chip index, leading to the exclusion of several market heavyweights and multinational entities.

According to the latest reshuffle, 16 companies are being dropped from the DSE Bangladesh Broad Index (DSEX), while nine new firms are being included. This adjustment brings the total number of constituents in the DSEX to 319, down from the previous 326.

The new index composition, approved by the DSE Index Committee, is scheduled to take effect on 18 January.

Among the most notable DSEX exclusions is Beximco Limited, along with the multinational Unilever Consumer Care. The list of dropped companies also highlights significant stress in the banking sector, as five banks – Exim Bank, Social Islami Bank, First Security Islami Bank, Union Bank, and Global Islami Bank – have been removed from the broad index.

Other notable exits include Phoenix Finance, Midas Finance, Union Capital, Apollo Ispat, and Hamid Fabrics.

On the entry side, the DSEX is seeing an influx of mostly Z-category or "junk" stocks. New additions include Bangladesh Welding, Desco, Dulamia Cotton, Safko Spinnings, Standard Ceramic, and Zeal Bangla Sugar, alongside A-category firms like Hwa Well Textile and Northern Islami Insurance, and B-category Sharp Industries.

DSE officials noted that although many of the removed companies maintained substantial market capitalisation, they failed to meet the necessary trading or turnover criteria. This disconnect is largely attributed to the ongoing slowdown in the capital market, which has dampened trading activity across the board.

Under the Bangladesh Index Methodology developed by S&P Dow Jones Indices, stocks must meet specific liquidity and market cap thresholds to remain eligible. For the DSEX, a constituent must maintain a float-adjusted market capitalisation of at least Tk10 crore. More importantly, stocks are required to have a minimum six-month average daily value traded of Tk10 lakh. They must also trade for at least half of the normal trading days in each of the three months leading up to the rebalancing.

Simultaneously, the blue-chip DSE 30 Index (DS30), which represents the most investable and liquid stocks on the exchange, underwent its semi-annual rebalancing.

Three companies – Meghna Petroleum, BSRM Steel, and Fine Foods – have been included in this prestigious list. They replaced Heidelberg Materials, GPH Ispat, and Khan Brothers PP Woven Bag, which were dropped for failing to sustain the required criteria.

The DS30 is designed to reflect a significant portion of the total equity market capitalisation and is built on pillars of liquidity, financial viability, and market cap.

To qualify for the DS30, a company must have a float-adjusted market capitalisation above Tk50 crore and maintain a three-month average daily value traded of at least Tk50 lakh. Furthermore, the methodology mandates that DS30 constituents must be profitable, specifically requiring positive net income over the latest 12-month period. This is calculated by aggregating the four most recent quarters of reported net income. While the liquidity requirement can be eased to Tk30 lakh under certain conditions to maintain index size, the fundamental requirement for financial viability remains a strict barrier for entry into the blue-chip category.

In contrast to the shifts in the main board, the DSE SME Growth Index (DSMEX) remained entirely unchanged following its annual review. No new companies met the criteria for inclusion, and none of the existing 19 constituents failed to meet the requirements.

Consequently, the DSMEX will continue with its current lineup of 19 companies when the new changes take effect later this month.

The Bangladesh Bank has doubled the licence renewal fee for money changers to Tk10,000 from the existing Tk5,000.

The central bank issued a circular through its Foreign Exchange and Policy Department on Monday (12 January), sending it to all authorised dealers and licensed money changers in the country.

The directive for the revised fee will take effect from 15 January.

A Bangladesh Bank official said the licence renewal fee for money changers had remained unchanged at Tk5,000 since 2002.

In view of rising prices and inflation in the country, the fee has now been increased to ensure consistency.

Money changers are required to renew their licences once a year.

Bangladesh Bank has purchased $700 million from commercial banks through auctions during the first 12 days of January this year, as part of its ongoing intervention in the foreign exchange market.

The central bank's spokesperson and Executive Director Arief Hossain Khan confirmed the development today (12 January).

Bangladesh Bank bought $81 million from 10 commercial banks at an exchange rate of Tk122.30 per dollar today. With this latest purchase, the central bank's total dollar purchases from commercial banks in the current fiscal year have reached $3.83 billion.

As part of its strategy to intervene in the foreign exchange market, Bangladesh Bank began buying dollars through auctions in July last year.

Under the market-based exchange rate system, the central bank's goal is to maintain balance in the foreign exchange market, allowing the dollar price to fall when supply exceeds demand, and permitting prices to rise when demand increases, according to officials.

Bankers said there are several reasons for the recent decline in dollar demand. With the government's large foreign payment obligations falling, demand for foreign currency has decreased. At the same time, sluggish business activity and weaker investment have reduced imports of capital machinery.

Stocks on the Dhaka Stock Exchange (DSE) ended marginally higher today, though trading activity weakened as turnover fell sharply, reflecting continued caution among investors amid lingering market uncertainties.

The benchmark DSEX inched up by just 2 points, or 0.04%, to close at 4,942, while the blue-chip DS30 index gained 1.54 points to settle at 1,897.

Despite the slight rise in indices, market breadth remained negative, with 175 issues declining against 140 advancing, while 78 securities closed unchanged.

Total turnover dropped by around 15% from the previous session to Tk352 crore, snapping a six-day streak of trading above the Tk400 crore mark. Market participants said investors largely stayed on the sidelines, opting for selective buying in a few stocks while booking profits in others, resulting in subdued trading momentum.

Trading activity was concentrated in a handful of stocks, with Orion Infusion, City Bank, Dominage Steel, Square Pharmaceuticals and Fine Foods emerging as the top turnover leaders during the session.

Sector-wise performance was mixed, reflecting the lack of clear direction in the market. The pharmaceutical sector led the gainers, rising 0.33%, supported by selective buying in heavyweight stocks.

Banking shares also posted modest gains of 0.29%, while food and allied industries advanced 0.23%. Fuel and power stocks edged up slightly by 0.04%.

On the losing side, non-bank financial institutions continued to face selling pressure, with the sector shedding 0.31%. Telecommunication stocks fell 0.38%, while the engineering sector posted the steepest decline of the day, dropping 0.45%.

Volatility remained pronounced among individual stocks, particularly in the financial sector.

Shares of Peoples Leasing topped the gainers' list, surging more than 10%, followed by Regent Textile, Chartered Life Insurance and Tung Hai Knitting.

However, several non-bank financial institutions suffered sharp losses, with Premier Leasing and Prime Finance hitting the floor price limit. International Leasing, Fareast Finance and Bangladesh Industrial Finance Company also closed sharply lower.

The Chittagong Stock Exchange mirrored the cautious tone, ending the session in the red. The CSCX index slipped 10 points to 8,568, while the CASPI dropped 20 points to close at 13,857. Turnover on the port city bourse stood at Tk7.79 crore.

Bangladesh plans to sign a government-to-government (G-to-G) agreement with China to set up a military drone manufacturing facility, enhancing the country's air defence capabilities.

Ahead of the formal signing, the finance ministry on 6 January approved a project proposal – officially titled "Establishment of Manufacturing Plant and Transfer of Technology (ToT) for Unmanned Aerial Vehicles (UAVs)".

The Tk608.08 crore project includes Tk570.60 crore for opening letters of credit (LCs) and making payments to import and install the plant and related technology, according to a copy of the proposal seen by The Business Standard.

Of the total amount, Tk570.60 crore will be disbursed over four fiscal years: Tk106 crore in the current year, Tk155 crore each in FY2026-27 and FY2027-28, and approximately Tk154.60 crore in FY2028-29.

The remaining Tk37.47 crore will be paid in local currency to cover LC opening charges, VAT and SWIFT charges.

When asked about it on Saturday, Finance Adviser Salehuddin Ahmed told TBS, "I will not comment on the establishment of a drone plant or the import of fighter jets."

When asked about the approval of the proposal to set up a drone plant and the import of ToT, he said, "There are many discussions about which country the fighter jets will be purchased from. Therefore, I will not talk about drones or fighter jets right now. Let everything be finalised first."

Bangladesh Air Force will implement the project with technology supplied by China Electronics Technology Group Corporation (CETC) International, a state-owned Chinese defence electronics conglomerate, according to the proposal.

The project is intended to enable the Bangladesh Air Force to manufacture and maintain drones domestically, a move officials say could reduce long-term reliance on imports.

When contacted, Inter-Services Public Relations (ISPR) Directorate officials declined to comment on the matter.

Before the finance ministry's approval, Chief Adviser Muhammad Yunus, who is also the adviser in charge of the defence ministry, approved the proposal.

Officials said the Bangladesh Air Force will not require any additional budget allocation to import the drone manufacturing plant and the transfer of technology. The expenditure can be covered from the annual allocation under the "other machinery and equipment" head in the Air Force budget.

A joint committee formed by the armed forces had earlier given policy approval – following negotiations – to procure the drone manufacturing plant and ToT, with payments to be made over either the FY25 to FY28 period or the FY26 to FY29 period.

According to the minutes of a coordination meeting held in September 2025, chaired by Chowdhury Ashik Mahmud Bin Harun, executive chairman of the Bangladesh Investment Development Authority (Bida), the Bangladesh Air Force (BAF) is partnering with China to establish an unmanned aerial vehicle (UAV) or drone manufacturing plant in Bangladesh through a technology transfer agreement.

Multiple attempts by TBS to contact Ashik, seeking information on the matter last Wednesday, were unsuccessful as he did not answer. He saw the question sent to him on WhatsApp regarding the issue, but did not respond.

Proposal approved on five conditions

The finance ministry approved the proposal, subject to five conditions. These include meeting the current fiscal year's expenditure from existing allocations, without seeking any additional budget for this procurement, according to the approved proposal.

From the next fiscal year to FY2028-29, the required funds must be managed within the Bangladesh Air Force's approved annual budget ceilings. All payments must comply with prevailing financial rules and be executed through letters of credit (LCs).

The ministry also stipulated that the approved funds cannot be used for any purpose other than the proposed contract.

China's state-owned CETC International initially quoted Tk643.61 crore, including shipping costs. However, after discussions between Bangladesh Air Force officials and representatives of the Chinese company in November, the contract value was renegotiated and reduced by Tk35.53 crore to Tk608.07 crore.

According to CETC International's website, the company is China's only large-scale technology corporation covering all areas of electronic information, including defence electronics, security electronics, and informatisation, with its products reaching more than 110 countries.

In defence electronics, CETC has developed seven main product systems: air base early warning, integrated electronic information systems, radar, communication and navigation, electronic warfare, UAV electronic equipment, and integrated IFF.

Its security and electronic information portfolio includes public security, e-government, intelligent transportation, new energy, components, and other related products and services.

In a strategic move to bolster the nation’s export earnings, Bangladesh Bank (BB) has announced a comprehensive package of export incentives and cash assistance across 43 different sectors.

The Foreign Exchange Policy Department-1 on Monday issued a circular detailing the rates applicable for the 2025-2026 fiscal year.

The newly announced rates will apply to goods shipped between January 1, 2026, and June 30, 2026.

The primary objective of this initiative is to encourage growth in the country’s export trade.

According to the circular, applications for cash assistance must undergo audit by external auditors, following established guidelines.

This maximum 10% rate is allocated to sectors including diversified jute products, leather goods, processed agricultural products, potatoes, light engineering products, and 100% halal meat.

Software and IT-Enabled Services (ITES) exports are eligible for a 6% incentive, while individual freelancers in these sectors will receive 2.50%.

Local textile industries will receive 1.50% alternative cash assistance in lieu of duty drawback or bonded warehouse facilities.

Notably, exporters targeting the Eurozone will receive an additional 0.50%. Small and medium-sized enterprises (SMEs) in the garment sector are eligible for a 3.00% incentive.

Pharmaceutical products, motorcycles, photovoltaic modules, and ceramics are slated to receive 6%.

Accumulator batteries (HS codes 8507.10 and 8507.20) are granted a high incentive of 10%.

Bicycles and cement exports are set at 3.00%, while the tea industry will receive 2.00%.

The policy has also extended to institutions located in specialized zones. Entities within the Bangladesh Economic Zones Authority (BEZA), Bangladesh Export Processing Zones Authority (BEPZA), and High-Tech Parks are eligible for incentives ranging from 0.50% to 2.00%, depending on the category of the goods and the nature of the industry.

This initiative reflects the government’s continued commitment to diversifying the export basket and maintaining competitiveness in the global market.

Bangladesh Bank announced plans to issue the ‘Bangladesh Government Special Sukuk-1’, a Shariah-compliant bond worth Tk 100 billion (Tk 10,000 crore), to finance selected national infrastructure and welfare projects.Financial planning tools

The decision was finalised after meetings held last week by the central bank’s Shariah Advisory Committee under the Debt Management Department, which were presided over by Bangladesh Bank Deputy Governor Dr Md Kabir Ahmed.

According to the central bank, the Sukuk will have a tenure of 10 years and carry an annual profit rate of 9.75 percent.

The bond will be issued based on the ‘Ijarah’ (leasing) method, a Shariah-compliant financing structure approved by the committee.

Proceeds from the issuance will support seven housing projects for government employees constructed by the Public Works Department.

Besides, the funds will be used for specific rail services operated under Bangladesh Railway, underscoring the government’s focus on both housing and transport infrastructure.

The ‘Special Sukuk-1’ is scheduled for issuance on January 14, 2026, through a private placement in favour of Sammilito Islamic Bank PLC.

The Sukuk represents part of Bangladesh’s ongoing efforts to leverage Shariah-compliant financing instruments to fund public projects while providing investors with profit-generating opportunities that align with Islamic finance principles.

The National Economic Council (NEC) on Monday approved Revised Annual Development Programme(ADP) for the fiscal year 2025–26 with a total size of Tk 2.08935 trillion, marking a reduction from the original allocation amid resource constraints and macroeconomic considerations.

The decision was made at an NEC meeting held at the NEC Conference Room chaired by Chief Adviser and NEC Chairperson Prof Muhammad Yunus.

Under the revised plan, Tk 2.0 trillion has been allocated for ministries and divisions while projects of autonomous bodies and corporations bring the total revised ADP size to Tk 2.08,935 trillion.

Of the Tk 2.0 trillion, Tk 1.28 trillion will come from domestic sources and Tk 720 billion from foreign financing.

Compared to the original ADP, the revised programme reflects a cut of Tk 160 billion from domestic sources and Tk 140 billion from foreign financing, totaling a reduction of Tk 300 billion.
Autonomous bodies and corporations have been allocated Tk 89.3553 billion, mostly from domestic sources.

The revised ADP covers 1,330 projects including 1,108 investment projects, 35 feasibility studies, 121 technical assistance projects, and 66 projects implemented by autonomous bodies and corporations using their own funds.

Among these, 286 projects are scheduled for completion by June 30, 2026.

The programme also includes 170 projects funded by the Climate Change Trust Fund.

Sectoral priorities under the revised ADP are transport and communication, power and energy, housing and community facilities, education, and local government and rural development, which together account for Tk 1.21118 trillion, or 60.54 per cent of the total allocation.

Among ministries and divisions, the highest allocations have gone to the Local Government Division followed by the Road Transport and Highways Division and the Power Division.

Other major recipients include the Ministry of Science and Technology, Ministry of Water Resources, Ministry of Primary and Mass Education, Secondary and Higher Education Division, Ministry of Shipping, Bridges Division, and Ministry of Railways.

The revised ADP also incorporates 856 new unapproved projects without allocation, 157 unapproved projects to facilitate foreign assistance, 35 new projects under agency self-financing, and 81 Public-Private Partnership projects.

Officials said the revised programme is expected to boost economic activities, accelerate GDP growth, generate employment, enhance education and healthcare, support human resource development, achieve food self-sufficiency, and contribute to poverty alleviation and overall socio-economic development.

The NEC meeting was attended by Planning Adviser, Advisory Council members, Cabinet Secretary, Principal Secretary to the Chief Adviser, Bangladesh Bank Governor, Planning Commission members, and senior secretaries from various ministries and divisions.

Gold broke through $4,600/ounce for the first time on Monday, while silver also hit a record high, as investors snapped up safe-haven assets amid heightened geopolitical uncertainties and a criminal probe into Federal Reserve Chair Jerome Powell.

Spot gold jumped 1.7 percent to $4,584.74 per ounce by 0752 GMT. Bullion hit a record high of $4,600.33 earlier in the day. US gold futures for February delivery added 2.1 percent to $4,595.30.

“So, between events in Iran, and potential US involvement, and the (Fed) chair being the focus of a criminal probe... US futures turned lower on the Powell news, which was a green light for gold to take a run higher,” said Tim Waterer, KCM Trade’s chief market analyst.

Unrest in Iran has killed more than 500 people, a rights group said on Sunday, as Tehran threatened to target US military bases if President Donald Trump carries out his renewed threats to strike the country on behalf of protesters.

Iran’s unrest comes as Trump flexes US muscles internationally, having ousted Venezuelan President Nicolas Maduro, and discussing annexing Greenland by force or by purchasing the island.

Powell said on Sunday the Trump administration had threatened him with a criminal indictment over Congressional testimony, an action the Fed Chair called a “pretext” to further pressure the central bank into lowering rates. This sent the dollar and US equity futures lower.

Though Goldman Sachs pushed back its forecast for Fed rate cuts on Sunday, it is now expecting two 25-basis-point reductions in June and September 2026 instead of the earlier anticipated moves in March and June.

Non-yielding assets tend to do well in a low-interest-rate environment and during geopolitical or economic uncertainties.

“If things remain as they are, I think (silver) prices will be soon pushing towards $90/oz... while there is still policy uncertainty and now there are some restrictions from China of which we are (yet) to see the impact,” said ANZ commodity strategist Soni Kumari.