Business leaders today (9 February) demanded stricter watch over large importers and extortion networks, warning that harassing small retailers will not help keep prices of essential commodities stable ahead of Ramadan and the upcoming national election.

They blamed macro-level extortion by a section of the police and administration for market instability, saying such practices directly push up prices of daily essentials.

The speakers urged the authorities to increase monitoring on major importers, mill gates and key supply-chain points rather than conducting frequent drives against small shopkeepers.

The demands were raised at a consultation meeting organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) to review the import, stock, supply and price situation of essential commodities ahead of Ramadan.

The meeting was chaired by FBCCI Administrator and Additional Secretary to the Ministry of Commerce Md Abdur Rahim Khan.

Addressing the meeting, Abdur Rahim Khan said that, as in previous years, FBCCI would monitor the market during Ramadan to ensure normal supply and reasonable prices so that consumers can buy essential goods at fair rates with the cooperation of businesses.

He noted that the volume of letters of credit (LCs) opened this year is significantly higher than last year, describing it as a positive sign for market stability. He also urged all stakeholders to remain cautious and restrained so that no unexpected or abnormal behaviour disrupts the supply chain.

Mohammad Imran Master, president of the Bangladesh Raw Materials Wholesale Traders Association, said perishable goods cannot be controlled by syndicates due to their nature.

"Supplies of onions, chillies, brinjal and coriander are adequate.

Prices may rise slightly during the first few days of Ramadan if demand increases suddenly, but that will not be long-lasting," he said.

He added that there could be some pressure on lemon supply, though no major shortage is expected overall.

Golam Mowla, general secretary of the Bangladesh Edible Oil Wholesalers Association, criticised enforcement agencies for targeting small retailers every Ramadan. "NSI, DGFI or the district administration raids small shops as soon as Ramadan begins. For selling at eight annas or one taka more, small traders are fined hundreds of thousands of taka," he said.

"But there is no effective monitoring of large importers or at the mill-gate level, where hundreds of crores are siphoned off. Oversight must be ensured at the higher level."

Market observer Kazi Abdul Hannan warned that large-scale extortion could intensify during the transition period of Ramadan and the national election. He alleged that in some markets, traders are forced to pay lump-sum extortion ranging from Tk5 lakh to Tk10 lakh to district and upazila-level administration and police. "This extortion has a direct impact on commodity prices," he said.

Highlighting the plight of poultry farmers, Poultry Association adviser Khandaker Monir Ahmed said producers are on the brink of collapse as selling prices have fallen far below production costs. "Against a production cost of Tk10.58 per egg, farmers are being forced to sell at Tk5–6," he said.

Criticising the government's subsidised egg sales, he warned that fixing prices below production costs would eventually destroy the industry.

Consumers Association of Bangladesh (CAB) General Secretary Md Humayun Kabir Bhuiyan said 10 monitoring teams will operate daily across Dhaka during Ramadan to oversee market conditions. He urged traders to preserve cash memos and sell goods at reasonable profit margins, warning that those creating artificial shortages through unethical practices would face strict action.

Business leaders at the meeting also proposed withdrawing additional duties on dates and suggested importing frozen meat to address potential protein shortages during Ramadan.

Speakers agreed that if proper monitoring is ensured and extortion is curbed, there is no rational reason for prices to rise during Ramadan this year.

Representing Meghna Group, Deputy General Manager Taslim Shahriar said there is no problem in the sugar market. "We are supplying a record volume of sugar. Last year sugar was priced at Tk130 per kg; now it is Tk92–93 at the mill gate," he said.

He added that despite fluctuations in the international market and some port-related challenges due to long holidays, sufficient stock is in the pipeline and the market is expected to remain stable during Ramadan.

FBCCI former director Gias Uddin Khokon painted a grim picture of the overall business environment, alleging widespread bribery and harassment.

"To obtain a gas connection for industry, bribes of up to Tk5 crore are demanded. Although bank interest rates were supposed to decrease, they have increased instead," he said. "With extortion, bribery and harassment at every step, businesses cannot control prices. Market monitoring should have started much earlier."

Representatives from government agencies, private sector bodies, business owners' associations and various trade organisations were present at the consultation meeting.

The newly signed Economic Partnership Agreement (EPA) with Japan will cost Bangladesh less than Tk 20 crore annually in forgone import duties on Japanese goods, while potentially delivering substantial benefits through expanded exports and labour mobility to the world’s fifth-largest economy.

The February 6 agreement, signed in Tokyo, creates a heavily asymmetric arrangement that favours Bangladesh, according to a briefing by Commerce Adviser Sk Bashir Uddin held at the commerce ministry office in Dhaka yesterday.

Under the deal, Japan will provide immediate duty-free access to 7,379 Bangladeshi products while Bangladesh will grant the same privilege to just 1,039 Japanese items, a ratio of more than seven to one.

The number of duty-free Japanese products will increase gradually over 18 years. Bangladesh’s garment industry, the crown jewel of the export sector, stands to gain significantly from favourable terms that could enhance its competitiveness in the Japanese market.

Bangladesh’s garment industry stands to gain significantly from favourable terms that could enhance its competitiveness in the Japanese market
The agreement permits single-stage transformation, allowing manufacturers to enjoy zero-duty benefits even when using imported fabrics, Commerce Secretary Mahbubur Rahman said at the conference.

This provision addresses a key constraint for Bangladeshi exporters, who often rely on imported textiles due to limited domestic fabric production capacity.

The secretary also noted that Bangladesh, being a least developed country (LDC), enjoyed a privilege in some areas in the deal with Japan, a developed nation.

For instance, he said Bangladesh has been given 10 years of relaxation in the intellectual property rights which means Japan will not ask for the patent right of the goods in next 10 years from the date of enforcement of the EPA.

Beyond trade in goods, the EPA creates significant opportunities for Bangladeshi professionals in Japan’s ageing, labour-constrained economy.

The agreement enables skilled workers, including doctors, nurses, caregivers, and domestic helpers, to access Japanese employment markets, Adviser Bashir Uddin said.

Japanese investors are already establishing language training centers in Bangladesh to prepare workers for these opportunities.

The commerce adviser expressed optimism that students and professionals will be able to access opportunities in the G-7 nation, potentially creating a new avenue for foreign remittances.

The services component of the agreement also tilts in Bangladesh’s favour. Bangladesh secured access to 120 Japanese sub-sectors while opening 98 sub-sectors across 12 sectors to Japanese investment.

The EPA’s timing proves crucial as Bangladesh prepares to graduate from LDC status later this year, which typically triggers loss of preferential trade terms. While Japan has separately extended existing LDC benefits for Bangladeshi goods until 2029, the EPA provides a more permanent framework for market access.

The deal represents Bangladesh’s first comprehensive bilateral trade agreement with a major developed economy, following a more limited preferential trade arrangement with Bhutan in December 2020. It reflects the government’s strategy to secure preferential access with key trading partners before losing LDC privileges, with similar negotiations underway with other major economies to maintain export competitiveness in the post-LDC era.

The agreement awaits ratification by Japan’s parliament, the Diet, which is expected within the next few days as the general election in Japan was held February 8, said the commerce adviser. The adviser also said seven rounds of negotiation were held to sign the agreement between the two countries.

State Minister for Foreign Affairs in Japan HORII Iwao signed the agreement on behalf of Japan while Bashir Uddin from Bangladesh on behalf of Bangladesh.

Bangladesh Bank has yet again decided to be clenched-fist on money supply.

During the second half of this fiscal year, according to monetary policy statement (MPS), the policy rate will remain unchanged at 10 per cent as inflation frowns.

In the new MPS unveiled Monday, the central bank, however, takes into cognizance concerns vented by economists and businesses over investment stagnation and announces some stimuli like higher credit supply to private sector.

But monetary experts opine differently about the inflation-control strategy, saying that the Bangladesh Bank (BB) brings some changes in the projections of monetary policy statement that might further feed into inflation, driven largely by supply-side factors.

According to the latest MPS for January-June period, the disinflation process is currently showing some inconsistencies, but remains at a relatively elevated level, suggesting that a policy-rate reduction may not be prudent at this time.

"It's essential to anchor the exchange-rate stability. As this helps contain imported inflation, lowering the policy rate could unintentionally create depreciation pressure on the exchange rate," it is stated in the policy document.

There are also several near-term inflation risks, including the upcoming national elections, the approaching holy month of Ramadan, and the possible announcement of a new national pay scale.

"These elements typically stimulate demand and consumer spending, underscoring the need for a careful, balanced monetary policy."

Accordingly, BB will maintain the policy rate at 10.0 per cent and continue its tighter stance in the second half of the fiscal 2025-26, the regulator says to justify the carryover contractionary policy.

The Standing Lending Facility (SLF) will be held at 11.5 per cent. However, BB decided to lower Standing Deposit Facility (SDF) by 50 basis points from 8.0 per cent to 7.5 per cent.

The lowering of SDF is aimed at encouraging interbank money market as well as private-sector investment, loan and advances activities.

Under the MPS, the broad money or M2 is projected at 7.8 per cent until December 2025 but the money-supply growth actually reached 9.60 per cent. The initial broad money projection was 8.50 per cent by end of June next. Now the projection is revised upward to 11.50 per cent.

In terms of credit to the public sector, the projection has been enhanced to 21.60 per cent by June next in place of prior projection of 18.10 per cent.

Simultaneously, the projection of private-sector credit growth has also been expanded to 8.50 per cent until June next from the initial projection of 8.0 per cent, in accordance with the latest MPS.

Bangladesh Bank Governor Dr Ahsan H. Mansur said they ought to concentrate on building up foreign-exchange reserves. In the process, they have purchased more than US$4.50 billion from the banks in the last seven months and injected liquidity worth over Tk 500 billion into the market.

"Yes, it has a cost but we don't see it as cost because the broad money projection (11.50 per cent) is still lower if we consider the nominal GDP and inflation target (over 12 per cent)," he told the policy-presentation function.

Talking about the nature of the MPS, the central bank governor said it is tightened but not as tight as it used to be. "The reality is we're easing up within the tighter framework."

Responding to a question over possible impact of the government bank- borrowing pressure if the proposed pay scale is implemented, the governor said it would certainly push up government bank borrowings if it is not met by increasing revenues.

He said the credit growth to the public sector had already climbed as high as 28.9 per cent by December last. "If it increases further, it will have negative impact on private sector. So, we need to make the government understand the consequences. We want the government will meet a portion of the funding requirement through revenue mobilisation so that presser is lesser."

Dr Mansur thinks it will cause two problems: interest rate will not decrease or rise further and fuel inflationary pressure. "These are unpleasant tradeoffs. We cannot deny it."

Regarding the lowering of SDF rate by 50 basis points, he said there are banks having surplus liquidity but they did not invest in the money market. Instead, they keep the funds into the BB at 8.0 per cent.

"The BB does not need money. We want banks invest the money in interbank market or in the private sector. That's why we cut the SDF rate to discourage it," he added.

Contacted for his view, former lead economist of World Bank's Dhaka Office Dr Zahid Hussain said the monetary-policy regime shifted to interest-rate targeting from monetary targeting. Under the policy shift, there is no target but projections.ঢাকা বিমান টিকেট

He says the central bank can contain inflation through controlling demand-side factors but the latest inflation spikes largely driven by the supply-side factors where the central bank has almost no control.

In this MPS, the economist says, some sort of easiness has been observed. "If demand side loses, it will create additional fuel to the fire. With this strategy, bringing down inflation at the expected level is not realistic."

About the SDF-rate cut, he says the rate is lowered mainly because of public-sector-borrowing pressure. "It may be a mild measure to prevent crowding-out effect." The economist was suggesting the central bank to mention the future path of reforms like Bangladesh Bank Order, Bank Company Act, Distressed Asset Management Act and AQR (asset quality review) in the MPS, which is missing.

In an immediate reaction, Dhaka Chamber of Commerce and Industry (DCCI) expressed grave concern and disappointment over central bank's decision to maintain contractionary monetary policy solely in the name of controlling inflation.

"Despite prolonged tight monetary conditions," it says, "inflation has not been effectively contained, proving that this tool has largely failed while inflicting serious damage on productive economic activities."

The trade body believes growth, employment and investment cannot be revived under an excessively restrictive monetary regime. "We look forward to the next elected government adopting a more pragmatic and growth-supportive policy framework coordinating the fiscal and monetary policy," it says, as the election is barely three days away now.

The benchmark index of the Dhaka Stock Exchange (DSE) posted its strongest single-day gain of 2026 yesterday (9 February), as investors rushed to take early positions ahead of the national election, buoyed by growing optimism over political clarity and expectations of continued capital market reforms under the next government.

The DSEX jumped 1.58%, gaining 82 points to close at 5,311, marking the sharpest one-day rise this year. The rally brought the index close to its recent peak of 5,337, recorded on 8 October 2025, and reflected a decisive shift in investor sentiment after weeks of cautious trading.

Broad-Based Rally and Rising Turnover

Market breadth was overwhelmingly positive, with 327 advancing issues against 37 decliners, while 33 stocks remained unchanged. Turnover rose 35% to Tk646 crore, driven by participation from both retail and institutional investors.

The surge added around Tk3,300 crore to the Dhaka bourse's market capitalisation in a single session, highlighting renewed confidence in equities.

According to EBL Securities, investors were motivated by the opportunity to take early positions in momentum-driven and undervalued stocks, encouraged by expectations of a favorable market trend following improved political clarity. Buyers dominated trading from the outset, maintaining control throughout the day, leading to broad-based gains across sectors.

Analysts noted that the announcement of the election schedule and clearer signals from political parties on economic and market reforms encouraged investors to return to equities more decisively after a prolonged period of subdued sentiment.

Sector Highlights

Banking stocks led trading activity, accounting for 20.6% of total turnover, as investors bet on improved profitability and policy support. Pharmaceutical shares contributed 15.7%, while textile stocks made up 15.6%, indicating broad-based interest across key industrial sectors.

Minhaz Mannan Emon, director of the Dhaka Stock Exchange, told The Business Standard that reforms by the Bangladesh Securities and Exchange Commission (BSEC) under the interim government have played a key role in rebuilding investor confidence. These initiatives include improving the quality of IPOs, strengthening market discipline, curbing manipulation through amended IPO, margin loan, and mutual fund rules, and taking action against major market manipulators.

Although earlier reforms did not trigger a sustained rally, investor sentiment has strengthened after the country's two major political parties separately addressed the capital market in their election manifestos, according to Ashequr Rahman, managing director of Midway Securities. Investors are hopeful that whichever party forms the government will honor commitments to market reforms, ensuring a more stable and predictable policy environment.

Top Gainers and Broad Participation

Trading activity centred on large-cap and actively traded stocks, with Simtex Industries, Asiatic Laboratories, Dhaka Bank, Islami Bank, and Bangladesh Shipping Corporation emerging as the top traded counters. Non-bank financial institutions led sectoral gains with a 2.6% rise, followed by textile and cement stocks, each advancing 2.4%.

Individual gainers included Sharp Industries, AB Bank, LankaBangla Finance, IFIC Bank, and Premier Bank, reflecting strong buying interest across manufacturing and financial sectors. Some profit-taking occurred in stocks like Islami Bank and Al-Arafah Islami Bank, as well as select mutual funds and industrial shares, causing minor price corrections.

Market participants said the broad-based nature of the rally indicates a healthy recovery rather than a narrow speculative surge confined to a few stocks.

The interim government has passed the much-talked-about reform plan to grant full autonomy to the Bangladesh Bank (BB) on to the next elected government.

Introducing sweeping amendments to a fundamental law such as the Bangladesh Bank Order during the interim government’s tenure may not be realistic, Finance Adviser Salehuddin Ahmed wrote in a reply to BB Governor Ahsan H Mansur yesterday.

“It would be more reasonable for the next elected government, after assuming office, to review and amend the Order as necessary,” he wrote in the letter.

In October last year, BB Governor Mansur sent a letter to the finance adviser requesting a legal overhaul of the 1972 Order. He sought greater autonomy for the central bank, aligning it with global standards and shielding the institution from political influence.

The proposals, backed by detailed justifications, aim to elevate the central bank leadership, restructure its board, and overhaul the appointment and removal process for top officials.

As the adviser did not respond and the interim government approached the end of its term, Mansur expressed concern over the delay at a public event last month. He said that passing the laws after the election would be difficult.

Days later, the International Monetary Fund (IMF) issued a statement quoting the government as reiterating its commitment to legal, institutional, and operational reforms for BB, while noting that key policy decisions would fall to the next elected administration.

In his letter to the governor, Ahmed, who is also a former central bank governor, took a cautious tone, saying that the Bangladesh Bank Order is a fundamental law governing the country’s central banking system. Any amendment requires careful consideration of the rationale behind the proposed changes.

“Therefore, it would be appropriate to conduct a detailed review of the proposed amendments and to hold consultations and discussions with key stakeholders and experts,” he wrote.

The finance adviser said the proposed amendments appear to require additional measures, including expanding the role and effectiveness of the existing coordination council and strengthening accountability frameworks to ensure good governance in banks and non-bank financial institutions.

“I have taken note of various aspects of the proposed amendments put forward by Bangladesh Bank, particularly issues relating to the appointment and removal of top officials, upgrading the governor’s status to that of a minister, restructuring the board, and the independence to create financial liabilities on behalf of the republic,” Ahmed added.

He said that under the existing law, BB already enjoys operational and functional independence, with no government interference in policy formulation or operations.

Amending the Bangladesh Bank Order topped the reform agenda that the interim government had pledged following the July uprising in 2024.

The IMF has long advocated greater autonomy for the central bank and provided technical support in drafting the amendments under its $5.5 billion loan programme.

The interim government informed the IMF about the delay. The Fund said that postponing banking and fiscal reforms could weaken growth, push up inflation, and heighten macro-financial risks.

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said the delay is “hard to explain” given the preparation of the drafts.

“This is not a new file,” he told The Daily Star.

Hussain said the drafts were developed after extensive discussions, including coordination committee meetings with the finance ministry, BB, and other stakeholders. The reforms were outlined in IMF mission reports and incorporated into the government’s Letter of Economic and Financial Policies, signed by both the finance minister and the BB governor.

“After that process, the role of the finance ministry is straightforward. It should review the draft, clear it, or clearly explain why it cannot be cleared,” Hussain said.

Leaving the file idle for months raises questions, he added.

The economist said the delay shows resistance linked to authority rather than technical disagreements. “One key element of the reform is reducing the representation of the finance ministry on the Bangladesh Bank board. From that perspective, the issue is control,” he said.

Hussain added that central bank independence should not be defined narrowly. “It is not only about fiscal dominance. It also involves bureaucratic dominance and influence from business lobbies.”

According to the economist, passing the reform laws now would clarify where institutions and political actors stand, rather than deferring responsibility to the next government.

Workers and employees at Chattogram Port have suspended their indefinite strike over the proposed New Mooring Container Terminal deal with DP World until 15 February, considering the upcoming general election and the need to keep goods moving ahead of Ramadan.

The announcement came in a press release issued early today (9 February) by the Chattogram Bandar Rokkha Sangram Parishad, which has been spearheading protests for the past nine days.

The group said Shipping Adviser Brig Gen (retd) M Sakhawat Hussain and Bida Chairman Chowdhury Ashik Mahmud Bin Harun had earlier told journalists that the interim government would not sign the NCT agreement during its tenure.

Despite the assurance, the platform alleged that the Chittagong Port Authority had taken a series of punitive actions against protesting workers. These included the arrest of five port employees, the filing of what it described as harassment cases, the transfer of 15 employees to different ports across the country and the imposition of various disciplinary measures.

It added that housing allocations of protesting workers had been cancelled and that 16 employees had been suspended, along with other penalties.

"In the interest of the 13th national election in 2026 and to ensure uninterrupted release of essential goods ahead of Ramadan, and following discussions with our leaders, we have decided to suspend the strike programme from 8am on 9 February to 15 February," the press release said.

The workers warned that failure to address their concerns within this period would prompt fresh programmes, to be announced at a press conference on 16 February.

The statement was signed by Mohammad Humayun Kabir and Mohammad Ibrahim Khokon, coordinators of the council.

It began its work abstention programme at 8am on 31 January, initially observing an eight-hour stoppage from 8am to 4pm for three days.

From last Tuesday (3 February), the protest escalated into an indefinite work stoppage, which was briefly suspended for two days following a visit by the shipping adviser on Thursday.

Despite the pause, the council alleged that further administrative actions by the CPA had reignited tensions, prompting workers to resume an indefinite strike yesterday morning.

The renewed stoppage disrupted operations at port terminals and the outer anchorage.

Indian refiners are avoiding Russian oil purchases for delivery in April and are expected to stay away from such trades for longer, refining and trade sources said, a move that could help New Delhi seal a trade pact with Washington.

The US and India moved closer to a trade pact on Friday, announcing a framework for a deal they hope to conclude by March that would lower tariffs and deepen economic cooperation.

Indian Oil, Bharat Petroleum and Reliance Industries are not accepting offers from traders for Russian oil loading in March and April, said a trader who approached the refiners.

These refiners, however, had already scheduled some deliveries of Russian oil in March, refining sources said. Most other refiners have stopped buying Russian crude.

TRUMP SAYS INDIA 'COMMITTED' TO HALTING PURCHASES

The three refiners and the oil ministry did not respond to requests for comment. The trade minister on Saturday referred questions about Russian oil to the foreign ministry.

A foreign ministry spokesperson said: "Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy" to ensure energy security for the world's most-populous nation.

Although a US-India statement on the trade framework did not mention Russian oil, President Donald Trump rescinded his 25 percent tariffs on Indian goods, imposed over Russian oil purchases, because, he said, New Delhi had "committed to stop directly or indirectly" importing Russian oil.

New Delhi has not announced plans to halt Russian oil imports.
India became the top buyer of discounted Russian seaborne crude after Russia invaded Ukraine in 2022, spurring a backlash from Western nations that had targeted Russia's energy sector with sanctions aimed at curtailing Moscow's revenue and making it harder to fund the war.

INDIA'S RUSSIAN-OIL IMPORTS A FRACTION OF 2025 LEVELS

One regular Indian buyer is Russia-backed private refiner Nayara, which relies solely on Russian oil for its 400,000-barrel-per-day refinery. Sources said Nayara may be allowed to keep buying Russian oil because other crude sellers pulled back after the European Union sanctioned the refiner in July.

Nayara also does not plan to import Russian crude in April due to a month-long refinery maintenance shutdown, a source familiar with its operations said.

Nayara did not respond to an email seeking comment.

Indian refiners may change their plan and place orders for Russian oil only if advised by the government, sources said.

Trump's order said US officials would monitor and recommend reinstating the tariffs if India resumed oil procurement from Russia.

Sources said last month that India was preparing to cut Russian oil imports below 1 million bpd by March, with volumes eventually falling to 500,000–600,000 bpd, compared with an average 1.7 million bpd last year. India's Russian oil imports topped 2 million bpd in mid-2025.

The intake of Russian oil by India, the world's third-biggest oil consumer and importer, declined to its lowest level in two years in December, data from trade and industry sources show.

Indian refiners have been buying more oil from Middle Eastern, African and South American countries as they scale back Russian oil purchases.

Bangladesh has expressed interest in purchasing railway rolling stock, including freight wagons and passenger coaches, from Pakistan, citing competitive pricing and manufacturing capability, officials said.

A two-member Bangladeshi delegation recently visited Pakistan Railways facilities, including the carriage factory in Islamabad and the Mughalpura Workshop in Lahore, to assess production capacity and technical standards. The delegation included Farhad Islam, secretary for international organisations and consular affairs, and Mohammad Iqbal Hussain Khan, Bangladesh's high commissioner to Pakistan, says Dawn.

During the visit, Pakistan Railways officials briefed the delegation on technical capabilities, ongoing projects and manufacturing processes, including locomotive maintenance and rehabilitation. The Bangladeshi officials conveyed appreciation for Pakistan's technical expertise and professional competence, according to officials familiar with the discussions.

Bangladesh has traditionally sourced railway rolling stock from India but is now exploring Pakistan as a cost-effective alternative. Pakistan has previously exported rolling stock to Bangladesh, with deliveries dating back to the 1980s.

Pakistan Railways currently supplies coaches and freight wagons to several countries, including Sri Lanka, Nepal, Chile and Argentina, reflecting what officials describe as modern, indigenous manufacturing capabilities.

Pakistan's Railways Minister Hanif Abbasi has indicated an intention to advance bilateral cooperation in the railway sector. Officials said the next phase of engagement will involve a detailed technical evaluation by railway experts from Bangladesh.

Bangladesh Bank is set to announce its latest monetary policy today, with the policy repo rate expected to remain unchanged at 10% as inflation continues to stay well above the central bank's target.

The policy will be unveiled at 11am by Bangladesh Bank Governor Ahsan H Mansur and will cover the six-month period from January to June.

This will be the interim government's third monetary policy announcement, and officials indicate that the central bank will continue with a contractionary stance to rein in persistent inflationary pressures.

Inflation rose for the third consecutive month in January, reaching its highest level in eight months. According to data released by the Bangladesh Bureau of Statistics yesterday, the overall inflation rate climbed to 8.58% in January, up from 8.49% in December, 8.29% in November and 8.17% in September.

The policy repo rate – the rate at which Bangladesh Bank lends to commercial banks – is expected to be kept unchanged as inflation has yet to fall to the targeted 6.5% set for FY26 under the previous monetary policy.

A senior Bangladesh Bank official said the primary objective of the central bank remains controlling inflation, which is why the upcoming monetary policy will continue to be contractionary.

Another senior official told The Business Standard that businesses have been pressuring the central bank to reduce the policy rate, arguing that high interest rates have made borrowing costly and constrained business operations.

"However, inflation remains elevated. Under the current circumstances, there is no plan to change the policy rate," the official said, adding that a rate cut could be considered in the next policy cycle if inflation shows a sustained decline.

Officials also said maintaining stability in the exchange rate will be a key focus going forward, as volatility in the dollar rate tends to push up import costs and domestic prices.

The Bangladesh Bank announces its monetary policy every six months.

After the interim government took office in August 2024, the central bank adopted a fully contractionary monetary policy and has maintained it since.

Meanwhile, credit growth in the private sector remains subdued. The target for private sector credit growth was set at 7.20% for December 2025, but actual growth stood at 6.10% at the end of December – its lowest level in two decades.

Bankers say weak investment sentiment following political changes has led businesses to scale back borrowing from banks, contributing to the slowdown in credit growth.

Bangladesh is set to sign a reciprocal tariff agreement with the United States today in Washington, aiming to address trade imbalances and secure continued access to the American market for Bangladeshi exports.

Commerce Adviser Sk Bashir Uddin and Secretary Mahbubur Rahman will participate in the signing ceremony virtually from Dhaka, while a delegation led by Khadija Naznin, additional secretary and head of the WTO wing, will represent the country in person at the US capital.

Bashir yesterday said details of the agreement would be disclosed after the signing ceremony.

The commerce adviser has already signed the document in Dhaka, which has been carried to Washington to be exchanged with the signature of US Trade Representative (USTR) Jamieson Greer.

The agreement comes in the context of the US decision to impose reciprocal tariffs on goods from several countries, including Bangladesh, in an effort to reduce its trade deficit. Since August last year, Bangladeshi exports to the US have been subject to a 20% reciprocal tariff.

Bangladesh exports goods worth about $8 billion annually to the US market, while US exports to Bangladesh amount to about $2 billion, resulting in a significant trade gap.

Officials said the agreement would include commitments by Bangladesh to increase imports from the US, particularly wheat, edible oil, fuel and cotton. The government has also decided to purchase 25 aircraft from US manufacturer Boeing as part of broader trade balancing efforts.

Speaking at a press conference at the Secretariat yesterday, the commerce adviser said the decision to procure 25 Boeing aircraft was aimed at maintaining the continuity of Bangladeshi exports to the US market.

The purchase is expected to cost between Tk30,000 crore and Tk35,000 crore, with payments to be made over 20 years.

He noted that the US had initially proposed the purchase of 47 aircraft, but the government opted for 25 for the time being. The interim administration is finalising the agreement to ease the burden on the next elected government, he added.

The adviser said further details of the reciprocal tariff agreement, including its specific terms and conditions, would be disclosed after the signing ceremony.

Referring to ongoing negotiations on tariff reductions, he said that the US had initially imposed a 37% tariff on Bangladeshi exports, which was brought down to 20% through discussions. Efforts are continuing to reduce tariffs on Bangladesh's main export item – readymade garments – to zero, he added.

Bashir observed that Bangladesh had been the only country whose draft agreement details were previously made public, a development he said had complicated earlier negotiations.

Had the details not been disclosed, he believed, it might have been possible to secure even lower tariff concessions.

Private sector activity continued to expand in January, albeit at a slower pace, as the Purchasing Managers' Index (PMI) eased to 53.9 from the previous month.

The moderation signals sustained growth momentum, though at a more measured rate amid softer global conditions.

Released on Sunday, the latest PMI reading showed expansion across agriculture, manufacturing and services, while construction returned to growth after contracting in December, underscoring a broadly resilient domestic economy.

Agriculture recorded its fifth consecutive month of expansion, although momentum weakened.

New business and overall activity continued to grow, but employment and input costs declined. Order backlogs in the agricultural sector also remained in contraction, albeit at a slower pace.

The manufacturing stayed in expansion for the 17th straight month, though growth softened compared to December last.

New orders, factory output, imports, input prices and supplier delivery times all increased, even as export receipts remained subdued.

Of concern, new export orders, input purchases, finished goods inventories and employment declined, while order backlogs returned to expansion.

The construction sector moved back into expansion after contracting in the previous month. Growth was recorded in new business, construction activity and input costs, while employment and order backlogs continued to fall.

The services sector, which contributes more than 50 per cent to GDP, marked its 16th consecutive month of expansion, with activity accelerating in January.

New business, overall activity, employment, input costs and order backlogs all posted gains.

"Overall, the latest PMI readings indicate that the economy experienced slower expansion, with weak global supply chain recovery and cautious order placement weighing on manufacturing exports," said Dr M Masrur Reaz, Chairman and Chief Executive Officer of Policy Exchange Bangladesh.

"The agriculture sector also showed signs of slowdown following the late autumn paddy harvests," he added.

However, Dr Reaz noted that continued expansion in the future business index across all key sectors points to sustained optimism in the period ahead, particularly following the elections.

Shares of several politically linked companies drew strong buying interest on the Dhaka Stock Exchange (DSE) yesterday, with Kay & Que (Bangladesh) Limited and three Monno Group firms ranking among the session's top gainers.

Kay & Que topped the gainers' chart, surging 8.74% to close at Tk434 per share.

Market participants attributed the sharp rise to speculative sentiment following the company's chairman, Abdul Awal Mintoo, to contest the 2026 parliamentary election from the Feni-3 constituency.

Mintoo, a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and a vice chairman of the BNP, is a prominent figure whose political developments often influence investor interest in his associated firms.

Similarly, Monno Group companies enjoyed a notable rally. Monno Agro Industries advanced 7.11% to close at Tk364.1, while Monno Fabrics gained 6.73% to end at Tk22.2. Monno Ceramics also added 4.12%, finishing the day at Tk83.3 per share.

Investors linked the rally to expectations surrounding Afroza Khan Rita, chairperson of Monno Group of Industries, as a BNP candidate for the Manikganj-3 constituency, prompting short-term traders to build positions amid evolving political developments.

Market analysts, however, cautioned that such rallies are frequently driven by speculation rather than underlying financial fundamentals. They noted that in the run-up to national elections, stocks associated with politically active entrepreneurs often draw significant attention, leading to heightened volatility.

Analysts advised retail investors to focus on valuations and underlying financial performance, warning that politically driven price surges can reverse quickly once speculative heat cools down.

Bangladesh Bank (BB) is set to announce its monetary policy for January-June of the current fiscal year today, just two days before the national election.

BB Governor Ahsan H Mansur will present the policy at 11:00am at a press conference at the central bank’s Motijheel headquarters. This will be the last monetary policy under the current interim government.

The policy rate, or repo rate -- a key interest rate used to influence overall economic activity, credit and inflation -- is expected to remain unchanged at 10 percent due to persistent inflationary pressures.

Central bank officials involved in policy formulation said BB will continue its tight monetary stance as inflation remains elevated, despite previous interest-rate hikes that have fallen short of the governor’s inflation targets.

Data from the Bangladesh Bureau of Statistics (BBS) shows overall inflation rose to 8.58 percent in January, marking the third consecutive monthly increase, with food prices rising ahead of Ramadan.

Although the policy rate has been raised from 6 percent to 10 percent over the past three years, inflation has remained stubbornly high. Headline inflation peaked at 11.66 percent in July 2024 and, while it briefly fell to 8.48 percent in June last year -- the first time it dropped below 9 percent in two years -- it rose again to 8.49 percent in December from 8.29 percent the previous month.

This persistence undermines Governor Mansur’s forecast that inflation would fall below 5 percent by fiscal year 2025–26.

Industry insiders said inflation is being driven more by supply-side constraints than by excess demand. The central bank has resisted calls for a rate cut and has kept the policy rate at 10 percent since October 2024.

BB is also expected to revise its private sector credit growth target to encourage investment after the February 12 election.

According to BB data, private sector credit growth fell to a four-year low of 6.10 percent in December 2025, down from 6.58 percent in November, reflecting political uncertainty and subdued economic activity.

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said the central bank has limited room to ease policy while inflation remains high and is likely to keep the policy rate at 10 percent in the near term.

“Cutting the policy rate now could worsen inflation rather than stabilise prices,” he said, adding that inflation is driven not only by excess demand but also by supply bottlenecks and global supply chain disruptions.

On exchange-rate management, Hussain said Bangladesh Bank is prioritising stability over allowing the taka to strengthen against the US dollar. Despite steady remittance inflows and improved dollar availability, the central bank is avoiding taka appreciation, as a stronger currency could lower import costs but hurt export earnings and remittance inflows.

He added that private sector credit growth remains weak and short-term foreign borrowing has declined. While lower interest rates could support investment, high inflation constrains such measures.

“BB’s dollar purchases have added liquidity to the banking system, but weak credit demand has so far kept inflationary risks in check,” Hussain said.

Following the recent conclusion of a trade agreement between India and the European Union, and the prospect of tariff reductions under a US-India bilateral trade deal, fresh concerns have emerged among Bangladeshi exporters. Tariffs on Indian products in the US market are being reduced to 18 percent, while Bangladeshi products continue to face an effective tariff of 20 percent. This has created a clear price gap between two major South Asian exporters. Experts warn that if this disparity persists, Bangladesh’s ready-made garment exports to the US market, despite their historic edge, could be seriously affected.

Bangladeshi exporters are already struggling to compete on price with US buyers. As a result, orders for basic T-shirts, knitwear and casual apparel are increasingly at risk. Sector insiders say export growth declined during the July-December period of 2025, with only marginal improvement in January, while competing countries moved ahead by leveraging global trade advantages. This has created a new crisis for the export sector.

Analysts also caution that if the EU market no longer offers GSP facilities after 2026, Bangladesh could face a major shock in its largest export destination. Against this backdrop, resolving internal challenges, strengthening diplomatic engagement and reinforcing trade strategies have become critically important. Without stronger policy support to ensure exporter stability, the export sector will face further pressure, with direct consequences for the national economy.

The impact is most visible in the ready-made garment sector. Exporters note that even a 1 to 2 percent tariff difference can determine where orders are placed. With lower tariffs, Indian exporters can offer more competitive prices. They also benefit from easier access to raw materials and faster delivery, supported by more efficient ports and supply chains. As a result, Bangladesh’s T-shirt, knitwear and casual apparel orders face serious threat.

Garment sector leaders say tariff differentiation has left Bangladeshi factories with few options. To survive, many may be forced to cut prices to retain buyers. But lower prices will squeeze already thin margins, worsening conditions for factories burdened by high production costs, gas and electricity shortages, and high-interest bank loans.

Between 2021 and 2026, India concluded nine major trade agreements, significantly strengthening its global export position. Bangladesh, by contrast, has only one effective trade agreement with Bhutan, while another with Japan was signed this week.

India’s success is not sudden. It reflects a long-term strategy and a comprehensive textile and apparel ecosystem, with strong backward and forward linkages, infrastructure investment, skills development and higher value addition. Sector stakeholders say that Bangladesh should not remain stuck in despair, but focus on two priorities: identifying where it has fallen behind, and determining how it can stay competitive through long-term planning. This calls for targeted FTA and CEPA strategies, greater value addition, improved logistics and port efficiency, policy stability and investment in skilled human resources. With these steps, the export sector can still be revitalised.

With India’s countervailing tariff set at 18 percent, Bangladesh faces renewed competitive pressure. The current structure is clear: Indian exports face a 15 percent customs duty plus an 18 percent countervailing tariff, while Bangladeshi exports face a 15 percent customs duty plus a 20 percent countervailing tariff. In total, Bangladeshi exporters pay 35 percent in tariffs. This erodes competitiveness as buyers push for lower prices. At the same time, private sector wage pressures are rising amid expectations of public sector salary increases.

In this situation, the government must urgently intensify diplomatic efforts and strengthen policy support to keep the export sector competitive. With a national election approaching, major political parties should also be prepared to debate and negotiate what best serves the country’s economic interests.

The interim government succeeded in preventing a deeper economic and geopolitical slide during a highly volatile period, but failed to translate that stability into meaningful institutional reform, transparency, and inclusive governance, said speakers at a policy dialogue on Saturday.

Economic analyst Mamun Rashid argued that although the interim government inherited an economy on the brink, particularly after the July 2024 uprising, its most visible achievement was halting further deterioration rather than delivering a decisive turnaround.

“The fall was stopped, not reversed,” said former banker Mamun Rashid at a virtual discussion titled “Interim Balance Sheet”, organised by the Power and Participation Research Centre (PPRC).

The economy in early 2024 was “going nowhere”, with macroeconomic indicators under severe stress. The period following the political transition marked a shift from decline to stabilisation, particularly in foreign exchange reserves, remittance inflows, and banking discipline.

Reforms in the banking sector, such as reconstituting bank boards and initiating forensic audits, particularly in troubled Islamic banks, were the most visible actions of the interim government.

Anwar-Ul-Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries, alleged that advisers relied excessively on bureaucrats, often without understanding the real-world impact of policy decisions
Still, these measures largely reflected “business-as-usual” governance rather than a deeper transformation.

“We did not see the kind of modernisation in economic management that many expected after the movement,” he said, adding that conflicts of interest, bureaucratic dominance, and informal influence networks remained largely intact.

Private sector credit growth had slowed to 6.1 percent, while implementation of the annual development programme stood at just 17.28 percent in six months, said Anwar-Ul-Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries.

He alleged that advisers relied excessively on bureaucrats, often without understanding the real-world impact of policy decisions.

“They thought they knew everything,” he said, adding that access to decision-makers was limited and engagement with businesses remained weak.

Public expectations after August 2024 were that social polarisation would decline and that a culture of open debate would emerge, said Rounaq Jahan, a political scientist.

“That did not happen,” she said.

While people are now speaking more openly, they are increasingly being labelled or targeted, creating a climate of fear.

She cited attacks on cultural and media institutions such as Prothom Alo, The Daily Star, Udichi, and Chhayanaut as examples of shrinking civic safety.

Jahan criticised the interim government for attempting too many ambitious reforms without sufficient consensus, particularly constitutional changes, while neglecting electoral preparation.

“Given the history of controversial elections, ensuring a credible next election should have been the priority,” she said.

The interim period coincided with rising regional and global instability, including uncertainties over water sharing with India and trade disruptions under the Trump administration in the US, said M Humayun Kabir, president of the Bangladesh Enterprise Institute.

While political parties mentioned geopolitics in their manifestos, concrete strategies were lacking.

Kabir welcomed Bangladesh’s economic partnership agreement with Japan, calling it a “bold step”, but criticised the interim government for failing to build strong institutional coordination across the foreign affairs and commerce ministries.

The interim government managed two critical challenges: halting macroeconomic decline and navigating a sensitive geopolitical environment, said Hossain Zillur Rahman, executive chairman of PPRC, who moderated the dialogue.

However, he warned that stability without transparency and social accountability could not deliver lasting change.

“The bureaucracy has further strengthened its grip on society, reflecting a continuation of colonial mindsets,” he said.

Rahman stressed that elections alone would not resolve systemic problems but could serve as a catalyst for rebuilding political dialogue and trust between parties and citizens.

Stocks opened the week in negative territory as investors opted to book profits following recent gains, pushing the benchmark index of the Dhaka Stock Exchange (DSE) slightly lower amid a cautious trading mood.

The DSEX, the broad index of the prime bourse, edged down by 0.10% to close at 5,229 points, while the blue-chip DS30 index slipped 0.17% to finish at 1,998 points today (8 February).

Market breadth reflected a lack of clear direction, with 162 issues advancing, an equal number declining, and 69 remaining unchanged.

Turnover dropped sharply by 19% from the previous session to Tk478 crore, indicating reduced participation as investors stayed on the sidelines in the absence of fresh catalysts. Market participants appeared reluctant to take aggressive positions after the recent upward trend, choosing instead to reassess valuations.

EBL Securities, in its daily market review, said the benchmark index started the week on a flat note as investors took advantage of the recent price appreciation to realise profits, triggering sustained selling pressure in several large-cap and blue-chip stocks. It noted that investors remained watchful over further political clarity ahead of the upcoming national election, which continued to influence short-term sentiment.

Sector-wise, pharmaceutical stocks dominated turnover, accounting for 14.7% of total trading value, followed closely by textile and banking sectors, each contributing 13.6%. Asiatic Laboratories, Simtex Industries, Kay and Que, Islami Bank and Monno Fabrics emerged as the most actively traded stocks of the day.

Most sectors ended the session in the red, with engineering and jute stocks posting the steepest declines of 1% each, while the tannery sector lost 0.7%. The negative sectoral performance underscored the impact of profit-taking across a wide range of scrips.

Interestingly, the top gainers' list was dominated by risky and loss-making financial institutions, as speculative interest pushed up prices of Fareast Finance, International Leasing, Peoples Leasing and FAS Finance, each posting double-digit gains. Associated Oxygen also featured among the gainers.

On the losing side, DBH First Mutual Fund suffered the sharpest decline, followed by Meghna Condensed Milk, Meghna PET, Reliance Insurance Mutual Fund and Prime Bank First ICB AMCL Mutual Fund, as investors offloaded positions in these issues.

The Chittagong Stock Exchange also mirrored the weak sentiment. Its selective categories index CSCX fell by 43 points to 9,078, while the all-share index CASPI dropped 48 points to close at 14,683. Turnover on the port city bourse stood at Tk6.33 crore.

The Bangladesh Competition Commission (BCC) has fined S Alam Super Edible Oil Ltd Tk 42.84 crore for artificially inflating cooking oil prices by restricting supply and colluding with dealers and rivals to manipulate the market in 2022.

Following demands from businesspeople, the government raised edible oil prices by Tk 38 per litre on May 5, 2022. Yet supply remained tight, leaving consumers struggling.

The BCC later launched an investigation into the import, production and pricing of cooking oil during that period, and filed charges against the company later that month.

In its final order, issued last Tuesday, the commission found that S Alam Super Edible Oil Company had violated the Competition Act of 2012 by restricting output and conspiring with distributors and other firms to control the market, reads a press statement.

It violated Section 15’s sub-section 1 and sub-section 2’s clauses a(i) and b of the law, which prohibit agreements that harm competition or create monopolies and oligopolies, particularly those that fix abnormal prices or limit production and supply.

Afroza Bilkis, a member of the BCC, told The Daily Star that S Alam Super Edible Oil Ltd must pay the fine within 30 days of receiving the full judgment.

If the company disagrees with the ruling, it can file a review with the commission or appeal to the Secretary of the ministry concerned within the same timeframe.

Bilkis added that failure to pay, review, or appeal would be considered a violation of the order, allowing the commission to initiate legal action, including criminal proceedings, against the company.

The company is owned by Mohammed Saiful Alam, who is accused of laundering thousands of crores of taka in loans from banks under his control during the 15 years of the Awami League-led regime.

The Daily Star attempted to contact S Alam Group’s Kazi Salahuddin Ahmed, senior general manager, and Subrata Kumar Bhowmick, executive director for finance, for comments on the matter. However, they did not respond by the time of filing this report, as of 6:30 pm.

The Dhaka Stock Exchange (DSE) has approved the transfer of 30 lakh shares of Genex Infosys PLC held by its director Nilofar Imam to City Bank PLC, according to a disclosure issued by the bourse.

The transfer will be executed outside the trading system of the exchange and is scheduled to be completed within the next 30 working days, effective from 3 February.

The share transfer will take place under Regulation 47(1)(d) of the Dhaka Stock Exchange (Listing) Regulations, 2015, which allows certain transactions to be conducted outside the trading platform. The provision permits off-market transfers in specific circumstances, including cases related to confiscation or loan default, subject to compliance with applicable laws and regulatory approval.

Genex Infosys' share price edged down slightly following the announcement. Today, the company's shares closed 0.38% lower at Tk26.20 on the DSE.

This is not the first instance of sponsor-level share transfers involving Genex Infosys in recent weeks. Earlier, on 18 January, another director of the company, Chowdhury Fazle Imam, transferred 8.07 lakh shares, while a corporate director Oracle Services Limited transferred 9.92 lakh shares to Dhaka Bank, also under the same regulatory provision.

Meanwhile, Genex Infosys' financial performance showed mixed trends in the first half of the ongoing fiscal year. For the July–December period of FY26, the company's consolidated revenue declined by 6% year-on-year to Tk96.96 crore.

However, its consolidated net profit rose by 16% to Tk17.59 crore, supported by improved cost management and operational efficiency. As a result, consolidated earnings per share stood at Tk1.46 at the end of the first half of the fiscal year.

According to the latest shareholding structure, sponsors and directors collectively hold 30.05% of Genex Infosys' shares, while institutional investors own 18.71%. Foreign investors account for 0.09%, and the remaining 51.15% shares are held by general public investors.

Earlier, the company recommended a 1% cash dividend for the fiscal year 2024–25, payable only to general shareholders, excluding sponsors and directors.

Just seven new petrol-powered cars were sold in Norway last month, according to official data, underlining the country's rapid shift away from fossil-fuel vehicles, reports The Guardian.

Figures from the Norwegian Road Traffic Information Council (OFV) show that registrations of new fossil-fuel cars fell to a record low in January.

Alongside the seven petrol cars, only 29 hybrids and 98 diesel vehicles were registered, while more than 2,000 battery electric vehicles (BEVs) were sold.

Overall car sales were subdued, largely because many buyers rushed to make purchases in December to avoid tax increases that took effect in January, according to The Guardian. Even so, the collapse in petrol car sales highlights how close Norway is to phasing out internal combustion engines that contribute to climate change and extreme weather.

"The January figures do not mean demand has disappeared, but reflect the extraordinary surge in purchases before the new year," said OFV director Geir Inge Stokke. "We expect registrations to rise again as the market normalises."

BEVs accounted for 95.9% of all new-car sales in Norway last year. Analysts attribute the country's electric vehicle boom to high carbon taxes, strong incentives for EV buyers and the absence of a powerful lobby resisting the transition.

Christina Bu, secretary general of the Norwegian Electric Vehicle Association, said the early 2025 figures should not be read as the end of the journey.

The transition is also becoming evident in Norway's used-car market. Sales of secondhand electric vehicles rose 22.7% year on year in January, with EVs now accounting for one in four used cars sold, OFV data shows.

"Electrification is clearly gaining ground in the used-car market as well," Stokke said. "That makes electric cars accessible to far more buyers than before."

While Norway remains the global leader in EV adoption, other countries are catching up. Denmark has seen BEV market share jump from 2% to 68% over the past decade, while electric vehicles now account for more than a third of new-car sales in the Netherlands, Finland, Belgium and Sweden.

After months of uncertainty, optimism has returned to apparel manufacturers and exporters in Tiruppur, India's largest textile hub, following an interim trade agreement between the United States and India.

The textile and apparel sector has emerged as one of the biggest beneficiaries of the deal, under which US tariffs on Indian garments have been reduced from 50% to 18%.

Industry leaders said the move would provide immediate relief to exporters who had been operating at losses while fulfilling existing orders.

India exports apparel worth about $10.5 billion annually to the US, its largest textile market. Exporters said the tariff cut would restore competitiveness and improve profitability.

Major apparel exporters noted that the agreement would ease pressure from discounted deals. Pearl Global Industries Ltd, which supplies brands such as GAP Inc and Ralph Lauren Corp, said the removal of penalty tariffs would boost margins.

"With the penalty now eliminated, discount pressure will reduce, directly boosting profitability from February onwards," said P Banerjee, managing director of Pearl Global.

Textile exporters in Tiruppur welcomed the India-US framework trade agreement, saying it would help the sector compete more effectively with Bangladesh, Vietnam and China.

Industry representatives said garment orders worth around Rs4,000 crore had been stuck due to tariff uncertainty and were expected to be cleared following the agreement, which has taken immediate effect.

Tiruppur Exporters' Association President KM Subramanian described the joint statement by India and the US as "significant" and said exports from Tiruppur could double over the next five years. Currently, the hub's garment exports are valued at around Rs15,000 crore, according to him.

Subramanian, who is also founder-chairman of KM Knitwear Pvt Ltd, said the deal could generate substantial employment.

"About one million people are currently employed in the industry. I am hopeful that another 500,000 jobs could be created over the next three to five years if the momentum continues," he said, adding that the immediate impact would be visible within three to four months.

South Indian Mills Association President Durai Palanisamy said the deal with the US, along with improved trade ties with the European Union, would increase demand for Indian textile exports due to enhanced global competitiveness.

M Rathinasam, founder of Tiruppur-based Starlight Exporters, said earlier many orders had shifted to Bangladesh and other countries, but expressed hope that more orders would now return to India and that work on pending orders would resume soon.

A Sakthivel, chairman of the Apparel Export Promotion Council, said the agreement would also help address non-tariff barriers and reduce compliance burdens for exporters.