The government may reduce Advance Income Tax (AIT) at the import stage on primary and intermediary raw materials and other industrial goods from the existing 5% to 4%, in a move aimed at easing pressure on businesses and encouraging investment.

The upcoming budget may also introduce a provision allowing businesses to claim refunds of excess advance tax deducted after a specified period. Although the current system allows tax adjustment, most businesses fail to recover the excess tax due to various procedural complexities.

Sources related to the National Board of Revenue (NBR) budget process said the initiative is primarily intended to reduce the tax burden on businesses and improve working capital flow.

A senior NBR official, speaking to TBS on condition of anonymity, said, "Industries importing goods under Industrial Import Registration Certificates (IRC), which currently pay 5% AIT in certain cases, may see the rate reduced to 4%.

"If implemented, this will provide relief to industrial entrepreneurs and reflects the current government's investment-friendly approach."

Business leaders have welcomed the initiative but argued that the AIT rate should be reduced further, saying the current structure is inconsistent with tax justice principles.

Mir Nasir Hossain, former president of the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI), told TBS, "Reducing AIT would be a positive decision, but it is still not enough."

Explaining his position, he said, "AIT is deducted at the import stage. A business first imports goods, adds value, sells products and only then generates income, at which point taxation should apply. Deducting tax before any income is earned is not logical."

Taskeen Ahmed, president of DCCI, also welcomed the initiative but said the AIT rate should not remain as high as 5%.

"AIT should be capped at a maximum of 2% because not all businesses generate the same level of income," he told TBS.

However, both business leaders acknowledged that the proposed reduction would have a positive impact on business and investment.

Under Bangladesh's existing income tax law, advance tax deducted at the import stage can later be adjusted against actual profits. Businesses with higher profits pay additional tax, while those with lower profits are entitled to refunds. However, businesses must submit extensive documentation to claim refunds, and even after doing so, the money often remains stuck for years. In some cases, legal procedures prolong the process even further.

As a result, many importers do not attempt to recover the money and instead add the cost to product prices.

An importer of escalators and electrical products, speaking anonymously, told TBS, "Getting AIT refunds is extremely difficult in practice. So we treat the amount as a business cost and add it to the price of products."

He added that if the government reduces the rate, it would lower business costs and ultimately help reduce costs for consumers as well.

Experts and economists have urged the government to use the national budget for the next fiscal year as a strategic instrument to revive economic growth while maintaining macroeconomic stability, warning that Bangladesh’s economy remains under severe stress amid persistently high inflation, sluggish private sector credit growth, and rising fiscal pressure.Economic trend analysis
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Speaking on Thursday, they said the country’s macroeconomic condition continues to be fragile, with inflation remaining elevated for an extended period, private sector credit growth dropping to a record low, and fears mounting over a possible fiscal shortfall in the upcoming fiscal year.

They also recommended undertaking robust reforms to create the conditions necessary for expansionary fiscal and monetary policies, alongside ensuring stronger discipline and accountability in economic management to secure the best value for public money.

These observations came at the launch of the Monthly Macroeconomic Insights report titled “Restoring Growth through Productivity Reforms: Pre-Budget Priorities”, prepared by the Center for Macroeconomic Analysis (CMEA) of the Policy Research Institute of Bangladesh.

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), attended the event as the chief guest at the event at PRI office, while it was chaired by Zaidi Sattar, chairman of the PRI.

“The economy now stands at a crossroads. Growth has slowed significantly, investment momentum has weakened, inflation remains elevated, and vulnerabilities in the fiscal, financial, and energy sectors continue to constrain policy space,” said Zaidi Sattar at his opening remarks.

Macroeconomic stabilization alone will not be sufficient to restore high and sustainable growth, he said, adding that the economy now requires a new phase of productivity-enhancing reforms.Local investment guides

He proposed reforms in the fields of rationalizing gargantuan tariffs, revamping trade openness, improving the investment climate, reforming the energy sector, restructuring state-owned enterprises, promoting FDI, and investing in critical infrastructure.

Dr Ashikur Rahman, Principal Economist of PRI, presented the keynote at the event.

He said that a disciplined budget anchored in macroeconomic stability, combined with sustained productivity-enhancing reforms, remains the most credible pathway for restoring Bangladesh’s growth momentum in the current environment.

The economy is facing a tough crossroads with inflation still elevated, fiscal space increasingly compressed by rising interest payments, and financial sector vulnerabilities continuing to constrain effective credit transmission; the room for expansionary fiscal or monetary stimulus remains limited, he further stated.

The government is considering setting tax rates in a more predictable framework – long sought by local and foreign investors – with the upcoming budget expected to outline rates for up to five years.

The rates introduced in last year's budget were set for a two-year period, covering FY2026-27 and FY2027-28. This means the upcoming budget will provide an indication of tax rates for the next five years.

An NBR senior official involved in tax policy formulation, speaking on condition of anonymity, told The Business Standard that businesses have long demanded a predictable tax regime.

He said investors and businesses want certainty over tax rates for at least three to five years to support long-term planning. "This year, we may be able to indicate tax rates for the next five years."

The idea of a predictable tax system has been a long-standing demand from both local and foreign investors. The Foreign Investors Chamber of Commerce and Industry (Ficci), the country's largest foreign investor lobby group, has repeatedly called for a stable and forward-looking tax framework.

Debabrata Roy Chowdhury, director of legal and corporate affairs at Nestlé Bangladesh, described the initiative as a welcome step. He said foreign investors have long argued that tax rates should remain stable for at least five years to support investment planning.

"If we can know the tax rates for the next five years, it would certainly be an investment-friendly move," he told The Business Standard.

Businesses typically face uncertainty ahead of national budgets due to frequent tax changes, some of which can also affect income and expenditure from previous fiscal periods.

Snehasish Barua, tax expert and managing director of SMAC Advisory Services Limited, said the move towards predictability is positive and reflects a key demand from the business community.

However, he cautioned that predictability alone may not be sufficient to attract investment. "If higher tax rates are locked in under a predictable system, it will not be investment-friendly.

Global trends show tax rates are declining, and higher rates could discourage foreign investment," he said.

The US dollar firmed on Thursday but stayed below a six-week peak as hopes that Washington was nearing a deal with Tehran to end the war in the Middle East capped further rises.

US President Donald Trump on ​Wednesday said negotiations with Tehran were in the final stages, while also warning of further attacks if Iran does ‌not agree to a deal.

The dollar, often a safe haven for investors, firmed 0.1 percent against the yen to 159.060 yen after falling for the first time in eight sessions against the yen on Wednesday.

Bank of Japan policy board member Junko Koeda added a measure of support for the yen with hawkish comments on Thursday, saying in ​a speech that the central bank needs to continue to raise rates with underlying inflation already around a 2 percent target.

​The euro was 0.2 percent down at $1.160050, after dipping on Wednesday to its weakest level since April 7 at $1.1583 before bouncing back.

The euro dipped after French PMIs for May showed the economy contracting at its sharpest pace in five and a half years.

“Terrible French ​PMI ... but ECB seems determined to raise rates,” said Kenneth Broux, head of corporate research FX and rates at Societe Generale, to explain ​the negative euro.

Traders meanwhile are awaiting euro area composite PMIs for May which will hit screens this morning.

Sterling was down 0.1 percent at $1.3421.

The dollar index , which measures the currency against the euro, yen and four other rivals, rose 0.2 percent to 99.295, down from a peak of 99.472 on Wednesday, the strongest level since April 7.r

Commerce Minister Khandakar Abdul Muktadir has announced that the government is undertaking regulatory overhauls to simplify business operations, including cutting down licensing times, ensuring consistent energy supply, and introducing structural exit routes for businesses.

The minister also said investment is the sole driver of job creation, which cannot be forced by laws or administrative decrees but must instead be supported by market-friendly policies.

He made the remarks while speaking at a policy symposium titled "Post-Uprising Economy & Geopolitics of Budget: Reminiscing the legacy of M Saifur Rahman" at a hotel in Dhaka today (22 May).

Muktadir, also the minister for industries, textiles and Jute, said, "To start a business in Bangladesh, an entrepreneur currently requires 25 to 26 licenses, taking an average of 350 days. This exhausts entrepreneurs before they even begin operations."

He stated that under the guidance of the prime minister, the government is drastically reducing these overlapping processes, with the changes becoming physically visible.

"As part of the reforms, the trade license issuance process – currently scattered across thousands of decentralised local government entities – will be centralised."

Additionally, the process for obtaining Import Registration Certificates (IRC) and Export Registration Certificates (ERC) will move entirely online, allowing entrepreneurs to download certificates digitally without visiting physical offices, he added.

The commerce minister also advocated for a fundamental shift in how the state views business failures.

Highlighting the lack of viable exit routes for struggling enterprises in Bangladesh, he called for bankruptcy frameworks similar to Chapter 7 or Chapter 11 insolvency codes used in developed nations.

"A business failure is not a criminal offense; it must be treated as a business issue. While willful default and money laundering must face the strictest punishments, genuine business failures should not be criminalised," he said.

Addressing the ongoing energy crisis, the minister noted that fuel shortages and weak policy implementation have left the country's installed industrial capacity underutilised, which costs the economy potential percentage points in GDP growth.

The government is actively working to ensure uninterrupted fuel supplies to production units, he assured.

Muktadir also raised concerns over high bank interest rates, which currently range between 13% and 15%. He pointed out that such rates are unsustainable for Bangladesh's labor-intensive, low-capital manufacturing sectors that operate on slim profit margins.

"To support these industries, the government, under the leadership of the finance minister, is planning to launch a scheme to provide off-shore funds at more tolerable interest rates," he said.

Bangladesh's state-owned enterprises (SOEs) drained nearly Taka 882 billion from the national exchequer in a single year, emerging as one of the country's biggest fiscal risks, according to a World Bank study.
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The study report highlighted that the deteriorating financial condition of public enterprises has become "unsustainable" at a time when Bangladesh is already facing falling revenue collection, slower economic growth and mounting pressure on public finances, BSS reports citing a press release.Personal finance courses

It said the growing losses of SOEs are consuming resources that could otherwise be invested in healthcare, education and social protection.

The findings were presented today at a dissemination workshop on the report titled "Financial Performance and Fiscal Risk of SOEs in Bangladesh" held at Pan Pacific Sonargaon in the city.

The study was conducted under the project on strengthening public financial management for better service (SPFMS), with the support of the Policy Research Institute (PRI) of Bangladesh.

According to the study, non-financial SOEs incurred a combined adjusted loss of Tk 441 billion in FY2024, while total net fiscal transfers from the government, including subsidies and development funding, climbed to around Tk 882 billion, equivalent to 1.7 percent of GDP.

Tanvir Ghani, Investment and Capital Market affairs Special Assistant to the Prime Minister, attended the workshop as the special guest.

Suraiya Zannath, Lead Governance Specialist, and team leader (SPFMS) WB, explained the context and objectives of the study and how the analysis will help frame policy and institutional reform.

Hasan Khaled Foisal, Additional Secretary, FD, delivered a presentation on the overview of SOEs, debt management and the macro-fiscal scenario, while Rahima Begum, Additional Secretary, FD, made the opening presentation highlighting the Public Financial Management Reform Strategy 2025-2030 relating to SOEs.

Henri Fortin, Lead Public Sector Specialist, WB, discussed international experiences of SOE reform and Immanuel Frank Steinhilper, Senior Governance Specialist, WB, presented global trends relating to SOEs.Economic trend analysis

Dr. Khurshid Alam, Executive Director, PRI, delivered the keynote presentation on the financial performance and fiscal risks of Bangladesh's SOEs.

The session was conducted by Mohammad Atikuzzaman, Sr. FMS, while Nazmus Sadat Khan, Economist, WB, delivered the closing remarks.

The study found that the energy and power sector accounted for the overwhelming majority of the losses.

The Bangladesh Power Development Board alone recorded losses exceeding Tk 444 billion in FY2024 due to high power generation costs, costly capacity payments to private power producers and electricity tariffs kept below production costs.

The report said politically influenced investment decisions, controversial contracts with independent power producers and weak corporate governance have severely undermined the sector's financial sustainability.

Other major loss-making entities include the Bangladesh Oil, Gas and Mineral Corporation, Bangladesh Rural Electrification Board, Trading Corporation of Bangladesh and several manufacturing corporations in the fertilizer, sugar and jute sectors.

The report observed that many manufacturing SOEs continue to incur persistent losses despite operating in competitive markets where private firms remain profitable. Local investment guides

The report also highlighted deep corporate governance weaknesses within Bangladesh's SOE structure.

It identified fragmented laws, bureaucratic control, weak oversight and lack of financial transparency as key reasons behind poor performance.

The report compared Bangladesh unfavorably with regional peers. While Bangladesh's SOEs posted a negative return on assets of 5.2 percent in FY2024, India's SOEs generated a positive return of 9.7 percent and Vietnam's recorded around 11.9 percent in recent years.

According to the study, Bangladesh could potentially mobilize more than Tk 1.2 trillion in additional fiscal resources if SOEs achieved a 10 percent return on assets and reduced their dependence on subsidies.

To address the crisis, the report recommended wide-ranging reforms, including restructuring commercially viable SOEs, introducing independent and professionally managed boards, strengthening financial disclosure requirements, reducing political interference and gradually opening monopoly sectors to competition.

It also suggested eventual privatization or closure of chronically loss-making enterprises that no longer serve strategic national purposes.

Oil prices gained more than 1 percent on ​Thursday, paring previous losses as investors monitored peace talks between the United States and Iran, while ‌supply tightness and US inventory drawdowns provided some support.

Brent crude futures rose $1.27, or 1.21 percent, to $106.29 a barrel by 0618 GMT, and US West Texas Intermediate futures were up $1.29 cents, or 1.31 percent, at $99.55.

Both benchmarks dropped more than 5.6 percent on Wednesday to their lowest in ​more than a week after President Donald Trump said talks with Iran were in the final stages, but ​also threatened further attacks if Tehran did not agree to a peace deal.

“The oil market remains overly sensitive to Iran-related headlines, with participants continuing to pin considerable hope on reports that talks ​between the US and Iran are progressing,” ING analysts said in a note on Thursday.

“We’ve been in this ​situation multiple times before, which ultimately led to disappointment,” they added, forecasting an average Brent price of $104 a barrel in the current quarter.

Iran warned against further attacks and unveiled steps entrenching its control of the crucial Strait of Hormuz, mostly closed, though before ​the war it had carried oil and liquefied natural gas shipments equal to about 20 percent of global consumption.

On ​Wednesday, Iran announced a new “Persian Gulf Strait Authority,” saying there would be a “controlled maritime zone” in the Strait of Hormuz.

Iran ‌effectively closed the strait in response to the US and Israeli attacks that started the war on February 28. Most of the fighting has stopped since an April ceasefire, but while Iran is limiting traffic through Hormuz, the US has blockaded its coastline.

Supply losses from the key Middle Eastern producing region because of the war have forced ​countries to pull from their ​commercial and strategic inventories ⁠at a rapid rate, raising concerns about draining them.

The US Energy Information Administration said on Wednesday the country withdrew nearly 10 million barrels of oil from its Strategic Petroleum ​Reserve last week for its biggest drawdown on record.

Underlining the impact of the ​supply disruptions in ⁠was EIA data showing a bigger-than-expected decline in US crude oil inventories last week.

“The drawdown in oil inventories will make it difficult for oil prices to remain low,” said Mingyu Gao, chief researcher for energy and chemicals at China Futures.

“With ⁠the ​Strait of Hormuz blocked, global refined-product and onshore crude inventories are ​expected to fall below their lowest levels for this time of year in the past five years by late May and late June.”

Bangladesh expects an off-the-cuff US$1.835-billion financing from the World Bank for use before the close of the current fiscal year to cushion the economy against mounting external shocks, sources say.Local investment guides
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Of the amount, the financier has proposed an emergency financing fund worth up to $250 million for Bangladesh government to tackle fiscal pressures stemming from the ongoing Middle East conflict.

The proposed emergency Investment Project Financing (IPF) would be financed through the reallocation of cancelled and uncommitted funds from five of ongoing or closing projects.

The projects include the Resilience, Entrepreneurship and Livelihood Improvement Project, Dhaka City Neighborhood Upgrading Project, Bangladesh Road Safety Project, Bangladesh Environmental Sustainability and Transformation Project, and Jamuna River Sustainable Management Project-1.

The proposed IPF is expected to be placed before the World Bank Board for approval by June 29, 2026, with disbursement likely to begin the following day, according to officials familiar with the developments.

The multi-sector package, now in an advanced stage of preparation, is intended to support macroeconomic stability, strengthen fiscal resilience, and ensure continuity in key financial-and energy-sector operations.

The government has made significant progress in advancing the FY26 financing pipeline following discussions held during the WB Group and IMF Spring Meetings, according to a recent letter addressed to the government.

The letter complements earlier correspondence dated May 5, 2026.Emerging market research

"We are pleased to observe significant progress on the FY26 pipeline thanks to the leadership of the Minister of Finance and Planning," the letter reads.

The letter mentions: "In sum, up to u$1.835 billion can be processed before the end of FY26."

According to an official communications between the WB and the Economic Relations Division (ERD), the financing programme combines emergency liquidity support with medium-term structural assistance.

The largest component of the package is up to $785 million under the Contingent Emergency Response Component (CERP) Rapid Results Option.

The government has already appointed a project director within the Finance Division and completed the omnibus amendment needed to repurpose funds from host projects for emergency expenditures.

The government is now preparing the CERP activation package, including a crisis action plan and procurement framework, to facilitate rapid fund utilisation.

Another major component is the Financial Sector Support Project-II worth US$450 million, aimed at strengthening financial-sector stability and reform initiatives.

Negotiations on the project concluded on May 11, with minutes signed the following day.Maps

An official says Bangladesh Bank (BB) has sought an additional $50-million allocation as the Deposit Protection Fund has already utilised around 90 per cent of its existing resources.

An addendum to the negotiation minutes is currently under preparation following approval from the finance and planning adviser, keeping the project on course for WB Board approval by June 23.

The pipeline also includes $350 million in additional financing for the Energy Sector Security Enhancement Project to help absorb global fuel-price volatility and support energy-supply security.

A high official concerned says the government has already provided feedback on the project paper and indemnity agreement, while the WB submitted the final project paper for senior management clearance on May 12.

The WB has stressed the need for parallel implementation measures to ensure timely release of the funds before the end of FY2025-26.

Under the proposed arrangement, the Finance Division will deploy experienced officials in procurement, financial management and safeguard compliance to meet the accelerated processing timeline, according to a senior official concerned.

Bangladesh is considering raising the top income tax rate to 35% for its highest earners in the upcoming national budget, a move aimed at narrowing the country's widening wealth gap, according to sources at the National Board of Revenue (NBR).

Taxpayers earning more than Tk1.5 crore annually – over Tk12.5 lakh per month – would fall under the proposed higher slab, up from the current 30% ceiling applied to income above Tk35.75 lakh a year.

If approved, the revised rate is expected to take effect from FY2028-29 and remain in force for three years. The finance minister is likely to table the proposal in June.

"The objective is to impose higher taxes on the super-rich to reduce income inequality between the rich and the poor," a senior NBR official said on condition of anonymity.

NBR officials estimate that more than 30,000 taxpayers fall within this bracket, with the measure projected to generate an additional Tk4,000 crore annually. NBR Chairman Abdur Rahman Khan had first indicated the plan in March during budget discussions.

The proposal has drawn mixed reactions. Transparency International Bangladesh (TIB) Executive Director Iftekharuzzaman called the move broadly positive in principle, saying higher earners should contribute more, but warned that rate hikes alone would not significantly improve revenue unless tax evasion is addressed.

Centre for Policy Dialogue (CPD) Additional Research Director Towfiqul Islam Khan also cautioned against repeatedly increasing pressure on compliant taxpayers, arguing that structural weaknesses in tax administration remain unresolved and that expanding the tax base should be the priority.

Taking a stronger view, tax expert and SMAC Advisory Services Managing Director Snehasish Barua called the proposal a "fiscal misstep," arguing that it penalises honest taxpayers while ignoring the large shadow economy.

He noted that nearly two-thirds of 12.8 million e-TIN holders do not file returns, leaving the tax net "dangerously narrow." He warned that higher marginal rates, combined with wealth taxation, could raise effective burdens further, risking capital flight and discouraging domestic investment and employment generation.

Instead, he urged greater reliance on digital tracking systems to formalise the economy and incentivise transparency rather than overburdening a small compliant base.

Indonesian President Prabowo Subianto said on Wednesday that his government will centralise exports of key commodities as part of efforts to boost state revenues and tighten the country's grip over its abundant natural resources.

Prabowo said in a fiery speech to parliament that Indonesia had lost as much as $908 billion in revenues in the last 34 years because its commodities were being sold on the cheap, adding that key exports like palm oil and coal would in future be sold via a central government-run enterprise.

Indonesia, a global commodities powerhouse, is the world's largest exporter of thermal coal and palm oil.

"Today the Indonesian government that I lead will issue a regulation on management of commodity exports," Prabowo said.

"The issuance of this regulation is a strategic step to strengthen management of commodity exports," he said.

"All sales of our resources, from palm oil, coal must be through a SOE selected by the government...as sole exporters," he added.

Prabowo's remarks confirm earlier accounts from two sources familiar with the matter, who said Indonesia was planning the move as part of a drive to strengthen government oversight over its natural resources.

Rumours about the plan have spooked the market on concerns that it could lead to changes in pricing mechanisms and squeeze trader margins, with Jakarta's main stock index shedding 3.5% on Tuesday and close to 2% on Wednesday.

The move by Prabowo, who has vowed to optimise revenue from the country's natural resources, is aimed at addressing concerns about under-invoicing and transfer pricing by exporters, the sources said. The sources declined to be named because they were not authorised to speak publicly.

Prabowo said Indonesia's natural resources were sufficient to deliver welfare to the entire country if they were managed according to the constitution.

"In the opinion of the government - and I am sure every patriot will support this - the earth, water and all the resources within it must be enjoyed by all Indonesians," he said.

Despite being rich in resources as well as a G20 country, Indonesia had not managed the economy well enough to boost state revenues, he added.

The regulations required to bring the plan into action had not yet been finalised, one of the sources said earlier.

As Bangladesh prepares to graduate from least developed country (LDC) status, the country needs to modernise its intellectual property (IP) laws to attract more foreign investment, especially from the United States, and strengthen confidence among global businesses, a US diplomat said yesterday.

Shilpi Jha, senior commercial specialist and IP policy advisor for South Asia at the US embassy in New Delhi, made the comment at a roundtable titled “Advancing the IPR Framework and the Way Forward”.

The American Chamber of Commerce in Bangladesh organised the event at The Westin Dhaka.

Stronger and internationally aligned intellectual property protection is no longer just a legal requirement, but an economic necessity, the diplomat said, adding that an updated IP framework would help Bangladesh integrate more effectively into the global economy, boost exports, encourage innovation, and attract foreign direct investment.

Bangladesh has already taken important steps by enacting the Patent Act 2023 and introducing a new Design Act. However, further reforms are needed to align the country’s intellectual property system with international standards and best practices, she said.

Bangladesh currently enjoys certain flexibilities under international agreements because of its LDC status, which has delayed the full implementation of some reforms.

Nevertheless, policymakers and businesses increasingly recognise the importance of stronger IP protection for long-term economic growth, the diplomat added.

Under the Design Act, innovators can now register original industrial designs not previously available in the market.

At the same time, efforts are underway to update trademark laws to meet international standards.

Experts believe these reforms could pave the way for Bangladesh to join major international IP systems such as the Madrid Protocol and the Patent Cooperation Treaty (PCT).

Joining the Madrid Protocol would allow Bangladeshi businesses and entrepreneurs to apply for trademark protection in multiple countries, including the United States, India, and Nepal, through a simplified process from within Bangladesh.

Similarly, becoming a member of the PCT would enable Bangladeshi inventors to seek patent protection in numerous countries through a single international application.

Industry insiders argue that effective intellectual property protection is not only important for attracting foreign investors but also essential for supporting local industries, encouraging innovation, and helping businesses compete globally.

Weak enforcement, they warn, discourages multinational companies from introducing advanced technologies and premium products in Bangladesh due to fears of counterfeiting and misuse.

Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, underscored the strategic necessity of robust IPR enforcement for the nation’s future.

He emphasised that a secure IPR framework is vital to attracting increased foreign direct investment while giving global importers and promoters the confidence to source products from Bangladesh.

Britain’s annual inflation rate fell more than expected in April, largely due to a drop in energy prices in the months before the Middle East war, official data showed Wednesday.

Analysts said they expected the rate to shoot back up in the coming months after the US-Iran conflict sent oil and gas prices soaring.

The Consumer Prices Index (CPI) rose by 2.8 percent in the 12 months to April, down from 3.3 percent in March, the Office for National Statistics (ONS) said in a statement.

Analysts’ consensus forecast had been for a slowdown to 3.0 percent in April.

“There was a notable fall in annual inflation led by lower electricity and gas prices,” ONS chief economist Grant Fitzner said.

“This was due to the government’s energy bill support package... along with lower global wholesale energy prices before the conflict in the Middle East,” he added.

UK finance minister Rachel Reeves is set to deliver fresh cost-of-living support to millions of Britons by reportedly announcing she will cancel her pre-war plans to hike fuel duties.

“Over today and tomorrow I’ll set out the next phase of how we will support UK households,” Reeves said in a statement after the inflation report.

“The war in Iran is not our war but one we will need to respond to,” she added.

The planned action also comes after the Labour government suffered heavy losses to the hard-right Reform UK and the left-wing Greens in local and regional elections this month.

That triggered a leadership challenge to Prime Minister Keir Starmer, with Wes Streeting resigning as health minister as he bids to oust him.

Ruth Gregory, deputy chief economist at Capital Economics, said the drop in British CPI inflation “feels like the lull before the storm”.

“We expect inflation to hover around three percent until July,” she said.

Susannah Streeter, chief investment strategist at Wealth Club, said that while “the softer-than-expected inflation reading will come as welcome relief to policymakers and households... concerns remain that higher energy costs and geopolitical tensions could yet feed through”.

Worries over a renewed inflation spike, after prices surged following the Covid pandemic and Russia’s invasion of Ukraine, are pushing up government bond yields around the world.

The return on the 30-year US Treasury bond reached the highest level since 2007 on Tuesday, while UK rates have hit peaks not seen for decades.

Consumer inflation jumped in both the United States and eurozone in April, to 3.8 percent and 3.0 percent year-on-year respectively.

The Bangladesh Bank is weighing whether to adjust policy rates in its upcoming monetary policy as internal discussions show sharp differences over the impact of interest rates on investment, inflation, and growth.

The issue was discussed at a meeting today (20 May), chaired by the governor, attended by all deputy governors, executive directors, and directors. The meeting was part of a series of consultations ahead of the next monetary policy statement.

The debate comes as lending rates remain elevated following recent policy rate hikes. Businesses have repeatedly urged the central bank to reduce rates, but no action has been taken so far.

Officials at the meeting expressed divergent views. One group argued that lower interest rates are necessary to boost investment and employment, warning that high borrowing costs risk undermining Bangladesh's competitiveness compared to neighbouring economies. They said rate cuts are essential for stimulating private sector credit growth and job creation.

Another group opposed immediate cuts, citing the "9-6 interest rate regime" between 2021 and 2024, when artificially capped lending rates failed to deliver expected investment growth. They argued that this period shows that reducing interest rates alone is insufficient to drive economic expansion.

A central bank official told TBS that Deputy Governor Zakir Hossain Chowdhury said Bangladesh is not heavily credit-dependent and that people do not typically borrow in response to price increases.

He reportedly noted that the link between interest rates, inflation, and investment is not strongly direct in the local context, adding that price increases often stem from weak market management, while strong agricultural output helps reduce inflation.

Deputy Governor Md Kabir Ahmad also said conventional economic models do not always reflect current realities and stressed that policy decisions must be taken cautiously and based on context.

The meeting further discussed profitability trends in stronger banks. Officials said deposit migration from weaker to stronger banks allows some institutions to raise deposits at lower costs while still charging higher lending rates, significantly widening interest spreads.

No decision was taken on whether rates will be increased or reduced.

Under the current monetary policy, private sector credit growth is targeted at 8.50%, but only 4.27% was achieved in March – one of the lowest levels on record. Inflation is targeted at 7%, while GDP growth is projected at 5%.

The Ministry of Finance has issued a fresh circular making the automated challan system, known as “A-Challan”, mandatory for all government revenues and receipts from July 1, 2026, completely abolishing the manual challan method.
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According to the circular issued on Tuesday, the decision aims to ensure maximum transparency in handling public funds, strengthen cash management, secure real-time digital deposits, and reduce the government's interest burdens resulting from hidden liquidity pools, UNB reports.

It noted that under the Constitution of Bangladesh and Treasury Rules, all government revenues and receipts must be deposited into the “Consolidated Fund” or “Public Account of the Republic” via the Treasury Single Account (TSA) maintained at Bangladesh Bank. All ministries, departments, and subordinate offices are legally obligated to use this account for their financial transactions.Bangladesh economic report

To streamline this, the government introduced the online “A-Challan” system using a 5-digit economic code during the fiscal year 2018-19 to ensure real-time deposits of revenues.

However, the Finance Division observed that several government offices are still bypassing the TSA framework. These offices continue to use old manual codes to deposit funds and are unlawfully maintaining separate bank accounts at various commercial banks.

This unauthorised practice prevents the government from determining its actual, real-time net cash balance. Consequently, despite having substantial cash scattered across commercial bank accounts, the state is forced to borrow from domestic and foreign sources at high interest rates to meet immediate expenditures.

To curb this fiscal indiscipline and minimise borrowing costs, the government has enforced three immediate directives. With the complete abolition of the manual system, the manual challan system will be completely shut down from July 1, 2026. A 100 percent automated “A-Challan” system must be implemented for all public revenues and other receipts from this date.

Cancellation of Independent Systems

Any separate financial systems or independent arrangements currently active across ministries, departments, directorates, and subordinate offices for collecting and depositing revenues must be cancelled immediately.Financial literacy course

Mandatory Fund Transfer by June 30

All funds currently accumulated by government offices in commercial banks must be mandatorily transferred to the TSA at Bangladesh Bank using the designated economic codes through “A-Challan” by June 30, 2026.

Union Capital Limited, a non-bank financial institution, has recommended no dividend for the financial year ended 31 December 2025, as the company continues to grapple with mounting losses and a deeply negative net asset value.

According to a price-sensitive disclosure filed with the Dhaka Stock Exchange (DSE) today (20 May), the company posted a consolidated net loss after tax of approximately Tk42.50 crore for the year.

Following the announcement, its share price slipped 2.08% to Tk4.70 on the premier bourse.

The company's consolidated earnings per share (EPS) for 2025 stood at negative Tk2.46 — an improvement from the negative Tk11.99 recorded in 2024.

Management attributed the narrower loss primarily to reduced provision requirements for loans and advances, higher recoveries from written-off clients, and lower operating expenses through cost control measures.

Despite the improvement in EPS, the consolidated net asset value (NAV) per share deteriorated further to negative Tk65.49, from negative Tk63.02 a year earlier.

The overall loss was largely driven by a decline in net interest income, investment income, and fee and commission earnings.

In the first quarter of 2026 (January–March), Union Capital reported a consolidated net loss after tax of Tk16.31 crore. Quarterly consolidated EPS fell sharply to negative Tk0.95, from negative Tk0.07 in the same period last year. The company said the decline was driven by lower interest income and reduced provision releases stemming from weaker recoveries against non-performing loans.

As of 31 March 2026, the consolidated NAV per share stood at negative Tk66.43, while net operating cash flow per share remained negative at Tk0.61.

The company has scheduled its Annual General Meeting for 29 July 2026, with the record date for entitlement set for 22 June, when shareholders will review the annual performance alongside other agenda items.

Oil prices lost about 1 percent on Wednesday after US President Donald Trump again ‌asserted that the Iran warwill end “very quickly”, though investors remain wary about the outcome of peace talks as disruption to Middle Eastern supply continues.

Brent crude futures fell $1.52, or 1.4 percent, to $109.76 a barrel by 0831 GMT and US West Texas Intermediate futures ​were down $1.36, or 1.3 percent, at $102.79.

“Prices are likely to still exhibit some upside potential even if ​a deal is concluded, given that supply will likely not return to pre-war levels ⁠immediately,” said LSEG research analyst Emril Jamil.

Similarly, PVM analysts said global oil stocks could reach critically low ​levels. “Yet, as observed lately, market players are comparatively nonchalant (or complacent) about what the conflict might bring,” PVM said.

The premium on ‌Brent ⁠contracts for delivery next month over contracts for delivery in six months - an indicator of traders’ views of current supply tightness - is around $21 a barrel, way below last month’s highs above $35.

Two supertankers left the Strait of Hormuz on Wednesday while another makes its way out after waiting for more than two months with 6 ​million barrels of Middle ​Eastern crude oil on ⁠board. The number of vessels crossing the strait remains well below the 130 or so ships that crossed daily before the war.

To make up the supply ​shortfall, countries are relying on commercial and strategic inventories.

In the US, crude oil ​inventories fell for a ⁠fifth straight week last week, according to market sources citing American Petroleum Institute data. Fuel stocks also fell.

US crude stockpiles reported by the Energy Information Administration are expected to have fallen by about 3.4 million barrels, ⁠a Reuters ​poll showed. The weekly EIA data is due at 1430 ​GMT.

In another sign of the increasing supply crunch, Britain has watered down sanctions to allow imports of diesel and jet fuel refined abroad ​from Russian crude.

Responding to Middle East crises and rising oil prices, the United Nations on Tuesday lowered its forecast for global economic growth and raised the prospects for inflation this year.

UN economists said global GDP growth is now forecast at 2.5% for 2026, down from 2.7% in January, and they said it could fall to only 2.1% "in a more adverse scenario.

That would be one of the weakest growth rates this century, outside of the COVID-19 pandemic and the global financial crisis of 2008, Shantanu Mukherjee, director of economic analysis in the UN Department of Economic and Social Affairs, said at a news conference.

On a somewhat positive note, he said, "we are not close" to a recession, but life can get harder for billions of people, and some countries may see their economies contract.

Global inflation is projected to rise to 3.9% this year, 0.8% higher than forecast in January, before the US and Israel launched airstrikes on Iran. Iran responded by blocking the Strait of Hormuz, a critical waterway for shipments of oil, natural gas, fertiliser, and other petroleum products.

"Increased energy prices are a potent factor, as are the prices of refinery products that are crucial to industrial production and commercial transport," Mukherjee said.

But he stressed that not all countries will experience the same rate of inflation.

In richer developed countries, inflation is projected to rise from 2.6% in 2025 to 2.9% in 2026. In developing countries, inflation is forecast to accelerate from 4.2% to 5.2% as higher costs for energy, transportation and imported goods erode real incomes.

The impact of the Iran war has been highly uneven, with the most severe economic damage concentrated in West Asia, a region comprised of 21 Arab countries, including those in the Persian Gulf, according to the World Economic Situation and Prospects report for mid-2026.

Economic growth in the region is projected to plunge from 3.6% in 2025 to 1.4% in 2026, "driven not only by the energy shock but also by direct infrastructure damage and severe disruptions to oil production, trade and tourism."

In Africa, average growth is projected to drop only slightly, from 4.2% last year to 3.9% this year, according to the report. And in Latin America and the Caribbean, it is forecast to slow from 2.5% to 2.3% in 2026.

In the United States, the economy is expected to remain "comparatively resilient" with 2% growth forecast this year, broadly similar to 2025, it said.

By contract, Europe "is more exposed, with heavy reliance on imported energy straining households and businesses," the economists said. Economic growth in the European Union is expected to slow from 1.5% in 2025 to 1.1% in 2026, while growth in the United Kingdom is forecast to drop further, from 1.4% last year to 0.7% this year.

In Asia, the UN said China's diversified energy mix, sizable strategic reserves and government actions are providing a buffer, so its economic growth is only expected to slow from 5% in 2025 to 4.6% this year.

India is forecast to remain one of the fastest-growing major economics, with its economy expanding by 6.4% this year, although that is lower than its 7.5% growth in 2025.

"The question for China, similar to the case of India and other countries, is just how long with this conflict and the impact of the conflict last, because all these different buffers are clearly limited," senior U.N. economist Ingo Pitterle told reporters.

A series of brutal killings in recent weeks has renewed concerns over public safety across the country, raising questions about the effectiveness of policing, crime prevention efforts, and the overall law-and-order situation.

From gang-style and politically linked killings in Dhaka and Chattogram to murders allegedly committed by family members and acquaintances in different parts of the country, the incidents have deepened public anxiety.

Criminologists say the persistence of violent crimes is eroding people’s sense of safety, as incidents of murder, sexual violence, torture, and mob brutality continue.

They advised law enforcers to take a tougher stance against such crimes while stressing the need to strengthen community policing.

In the first four months of the year, at least 1,142 murder cases were filed across the country, up from 1,017 during the same period in 2025 and 1,006 in 2024.

According to Police Headquarters data, the highest number of cases this year was recorded in areas under the Dhaka Range, with 265 cases, followed by 225 in the Chattogram Range and 78 in the Dhaka Metropolitan area.

The data further show that murders rose to 317 in March from 250 in February and 287 in January, before dipping slightly to 288 in April this year.

Rights organisation Ain o Salish Kendra’s data show that at least 115 children were killed in the first four months of the year. Among them, 12 were killed after alleged rape or attempted rape, 59 were killed following torture, while the bodies of 20 missing children were recovered.

In one of the most horrific recent incidents, eight-year-old Ramisa Akter, a second-grade student, was found beheaded in her neighbour’s home in Dhaka’s Pallabi on Tuesday. Police said preliminary investigations suggest the child was raped by her neighbour, Sohel Rana, before being murdered.

The gruesome incident has left the victim’s family devastated and sparked widespread outrage and anxiety.

Saika Sayeed, a schoolteacher and resident of Pallabi, said, “People are being murdered almost regularly. Even children are not being spared. One after another, incidents are taking place. It’s very frightening, and we don’t feel safe.

“Also concerning is that the culprits are sometimes arrested, but they get bail and commit crimes again.”

MAJOR INCIDENTS

Several incidents in April and May were marked by extreme brutality, fuelling concerns over rising violence and public safety.

At least 15 major killings reported during the period included family-related murders, mob attacks, gang violence, revenge killings, and assaults linked to personal disputes and criminal networks.

On Tuesday, Ramisa was allegedly killed by her neighbour in Dhaka’s Pallabi, while a man was hacked to death by local youths for protesting against drug abuse in Narayanganj.

Family-related violence also drew attention. On May 18, police recovered the bodies of a couple and their infant child in Madaripur, suspecting a murder-suicide. Earlier, on May 9, five members of a family, including three children, were brutally killed in Kapasia over a family dispute.

On May 17, the dismembered body of Saudi expatriate Mokarram Miah was recovered from Dhaka’s Manda area. Police arrested two women in connection with the murder.

Several incidents were linked to organised crime and revenge attacks. On May 7, Hasan Raju was shot dead in Chattogram’s Rowfabad -- which police described as a revenge killing -- while 11-year-old bystander Reshmi Akhter later died after being hit by bullets during the attack on Raju.

In Dhaka, listed criminal Khandoker Noyeem Ahmed Titon was shot dead near New Market on April 26, while suspected gang leader Alex Imon was hacked to death in Rayerbazar earlier that month.

Mob violence also remained a major concern.

According to the Human Rights Support Society, at least 71 people were killed in 132 mob-related incidents in the first four months of 2026. In April alone, 44 mob attacks left 22 people dead and 39 others injured.

In Kushtia, a pir was beaten and hacked to death on April 11 over allegations of hurting religious sentiments.

WEAK POLICING, SOCIAL DECAY FUELLING RISE

Political instability, economic inequality, and social degradation are driving a surge in brutal killings and violent crimes, said Omar Faruk.

“Following the events of August 5, the country’s social and political situation became fragile, while weaknesses in policing, lack of preventive measures, and poor coordination among law enforcement agencies created opportunities for criminals.

“Our system largely responds to crimes after they occur rather than focusing on prevention. If preventive measures, community awareness, and stronger social initiatives were prioritised, both crime and the fear of becoming victims could be reduced.”

Faruk said criminals now perceive the current situation as favourable due to what they see as weakened police preventive capacity, leading to an increase in murders, rape, and other violent crimes in recent months.

Many murders are being committed by acquaintances, including family members and neighbours, due to deteriorating social relationships, he said, adding that economic inequality, financial disputes, family conflicts, and social decay remain major drivers of violent crime.

“Law enforcement alone will not solve the problem,” Faruk said, calling for preventive social measures and stronger community involvement to stop the situation from worsening.

Contacted by The Daily Star, Khondaker Rafiqul Islam, additional inspector general (Crime and Operations) at the PHQ, said incidents of brutal crime appear to be increasing as people have become increasingly impatient and less tolerant, making such offences difficult to predict in advance.

“Unlike organised violence or unrest, personal enmities and individual motives behind these incidents are often hard to detect beforehand,” he said, adding that police have, however, been able to identify the causes behind each incident and collect evidence against those involved.

Referring to recent killings linked to juvenile gangs, political groups, and underworld networks, Rafiqul said law enforcers are continuing special drives and surveillance operations to prevent such crimes.

“No murder is desirable, and we always try to prevent such incidents. But if any crime occurs, our immediate priority is detection and bringing the perpetrators to justice.”

He added that police have instructed officers in areas witnessing higher levels of violent crime to intensify monitoring of listed criminals and other suspects as part of routine crime prevention efforts.

Exporters may need to add more value – at least by 50% – to products as the government drafts a new policy with a stronger push for reduced reliance on imported inputs and the development of backward linkage industries.

One of the biggest changes proposed in the draft Import Policy Order 2026-2029, seen by TBS, is a sharp increase in the minimum value-addition requirement for garment exports made from imported raw materials.

Officials say if an exporter fails to meet the requirement, it will not receive any cash incentive and the duty benefits on raw material imports.

For children's garments, the minimum value addition requirement may double from 15% to 30%. For all knit and woven garments made from cotton and man-made fibres, the threshold could rise from the existing 20% to 30%.

A stakeholder meeting is scheduled for today, where Commerce Minister Khandakar Abdul Muktadir is expected to discuss the draft policy with industry representatives ahead of finalisation.

If approved and implemented, the comprehensive new trade directive will remain effective until 31 December 2029.

Higher value addition requirements

Under the current import policy, there is no minimum value-addition requirement for the export of goods, except for knitwear, woven garments, and children's clothing.

However, under the draft policy, stricter value addition thresholds have also been proposed for several other export sectors. Underwear and other synthetic fibre-based specialised garments may be required to meet at least 40% value addition.

Footwear, including leather and non-leather products, may be subject to a 30% requirement. Ship exports could be subject to a 40% threshold, while wooden furniture exports may be required to achieve 50% value addition.

The draft policy also proposes a ban on importing knitted fabrics, a move that has drawn criticism from industry leaders who argue that domestic production is insufficient to meet export demand.

Exporters warn against higher thresholds and fabric bans

Bangladesh Garment Manufacturers and Exporters Association President Mahmud Hasan Khan told TBS while a 30% value addition is achievable for the knitwear sector, it remains entirely unrealistic for the woven garment segment under present market conditions.

Echoing these concerns, Bangladesh Knitwear Manufacturers and Exporters Association President Mohammad Hatem said while the government's targeted thresholds might be feasible in isolated cases, the prevailing international market dynamics make them impossible to implement across the board.

Apparel leaders heavily criticised the clause in the draft policy that seeks to enforce a blanket ban on the import of knit fabrics.

The BGMEA president argued that Bangladesh must maintain open channels to import specialised knit fabrics that are not locally manufactured, warning that failing to do so would severely cripple export competitiveness.

Adding to this, Hatem explained that halting knit fabric imports would require massive immediate investments in the domestic dyeing sector alongside guaranteed gas supplies.

The BKMEA president warned that banning fabric imports would derail crucial product diversification into high-value knitwear when "the government is currently unable to ensure consistent gas distribution and the broader economic climate is unsuited for heavy capital expenditure."

Preventing money laundering

Md Hafizur Rahman, former director general of the WTO Cell under the commerce ministry, told this newspaper that the value addition rate might be increased to prevent exporters from repatriating lower export proceeds as a means of money laundering, despite exporting at higher prices. "At the same time, encouraging exporters to use local materials could also be an objective."

However, he noted that since Bangladesh's primary goal is job creation, raising the minimum threshold for value addition is not logical. "This could hamper exports from smaller factories, which would ultimately shrink employment opportunities."

Hafizur added, "Vietnam does not have such stringent value addition requirements. Many small factories in that country import from China, add a minimal amount of value, and then export."

Changes in import entitlement rules

While the import of used vehicles, motor cars, passenger cars, and trucks older than five years remains prohibited as before, the draft import policy proposes to allow the import of electric vehicles that are up to 10 years old.

The policy also proposes changes to export-linked import entitlements under free-of-cost arrangements. The existing entitlement of up to 50% of the previous year's export value for garments, woven and children's clothing would remain unchanged. However, for man-made fibre products and synthetic underwear, the limit may be increased from 50% to 70%.

For footwear and leather goods, the proposed import entitlement is 60% of the previous year's export value. Ship imports would be allowed up to 60% of the export letter of credit value. Furniture-related import limits have been proposed at 40% for wooden furniture, 20% for fabric-based furniture and 10% for parts and accessories.

Trade facilitation and sector-specific reforms

The draft order removed the existing $5,00,000 ceiling on imports under sales or purchase contracts without opening letters of credit, expanding flexibility for businesses.

It also proposes eliminating fixed time limits for shipment after opening letters of credit, which currently stand at 24 months for machinery and nine months for other goods.

The threshold for personal imports by non-registered importers has been proposed to be doubled from $10,000 to $20,000.

For expatriate Bangladeshis, the duty-free limit for sending goods to family members has been proposed to be raised from Tk10,000 to $1,000.

Export-oriented garment manufacturers may also see an increase in the annual import quota for samples, rising from 1,500 to 3,000 items per category. Similar increases have been proposed for the footwear and leather industries, while tanneries may see their sample import limit rise from 300 to 3,000 pieces.

Policy alignment and geopolitical provisions

Although the draft did not explicitly refer to the United States trade agreement, it allowed reduced tariff imports under certificates of origin linked to preferential and free trade agreements with various countries and regions.

The draft introduced a direct prohibition on imports from Israel, stating that no goods produced in or originating from Israel, nor cargo carried on Israeli-flagged vessels, will be eligible for import.

The government announced Tk 20 crore in incentives for cotton farmers for the 2026–27 financial year, aiming to boost local cotton production and support marginal farmers across the country, said the Cotton Development Board officials.

The CDB officials said that about 25,000 farmers of 26 districts would receive seeds, fertilisers and pesticides for cultivating cotton as an intercrop on one bigha of land.

Md Rezaul Amin, executive director of the CDB, told New Age that under the program, each farmer would receive agricultural inputs worth Tk 8,000, including seeds, fertilizers, and pesticides.

‘The inputs would include 600 grams of hybrid cotton seed, 50 kilograms each of triple super phosphate and Muriate of Potash two kilograms of boron fertiliser, 450 millilitres of fungicide and 150 millilitres of growth regulator,’ he added.

According to the CDB, cotton cultivation has become highly profitable for farmers, as the production cost of cultivating cotton on one bigha of land is around Tk 15,000, while a farmer can earn nearly Tk 60,000 by producing 15 maunds of raw cotton.

Moreover, local cotton production would also help save foreign currency as every kilogram of domestically produced cotton reduces government import costs by around $4 per kilogram.

As the world’s second-largest exporter of readymade garments, Bangladesh imported 8.1 million bales of cotton from its global sources 2025, making it the highest importer of cotton, said the United States Department of Agriculture.

Due to weaker global demand, cotton imports might slightly decline in the 2025-26 marketing year, to 7.8 million bales.
The USDA, however, projected that imports might reach 8 million bales in MY2026-27 in its recently published report.

Meanwhile, despite being a big player in the RMG export, the domestic production of cotton remained negligible, about 153,000 bales of cotton produced on 45,000 hectares of land, which accounted for less than 2 per cent of its total consumption.

CDB executive director Rezaul Amin said the government incentives would encourage more farmers to grow cotton, which could help reduce dependence on cotton imports.

He also said that the increase in cotton production through government incentives might discourage farmers from cultivating tobacco, one of the most harmful crops.

Earlier, on May 15 of 2025, the Ministry of Agriculture issued a notification announcing raw cotton as an agricultural product.

The decision came following a meeting of the council of advisers of the then-interim government on May 6 of the same year, which approved a proposal to recognize raw cotton as an agricultural product.

Due to the recognisition, it would be easy to get agricultural loans, which could encourage cotton production in the country, would be an advantage for the country.

According to the CDB, the incentive beneficiaries would include 6,200 farmers in Kushtia zone, 5,500 in Chuadanga zone, 3,200 in Jenaidah zone, 3,000 in Jeshore zone, 2,000 in Rajshahi zone, 1,200 in Bogura zone, 1,200 in Mymensingh zone, 680 in Rangpur zone, 500 in Thakurgaon zone, and 380 farmers each in Dhaka, Bandarban, Rangamati, and Khagrachari zones.

The Ministry of Agriculture would release the funds to the deputy commissioners of the respective districts. The Department of Agriculture, CDB officials, and the upazila administration would monitor the incentives,’ said Rezaul Amin.

M Gazi Golam Mortuza, an expert at the CDB, told a news agency that the incentive is being provided for the third consecutive time to increase cotton production and provide financial support to poor and marginal farmers.

Earlier, the government allocated Tk 9.90 crore for 12,375 farmers in 2023-24 and Tk 16.88 crore for 21,100 farmers in 2025-26 under similar incentive schemes.

According to the CDB, cotton sowing usually begins in mid-June and harvesting continues until December.

Cotton cultivation also contributes positively to soil health, as the repeated cultivation of the same crops on the same land might degrade soil fertility, whereas cotton cultivation could help improve soil conditions, said the CDB official.

CDB said the introduction of genetically modified cotton varieties has also played a significant role in increasing yields and reducing import dependency.