Bangladesh is phasing out export incentives to comply with World Trade Organisation (WTO) rules before its expected graduation from Least Developed Country (LDC) status in 2026.

This move has sparked divided opinions, with exporters fearing loss of competitiveness due to higher costs and foreign exchanges challenges. To support these exporters, experts are recommending reduction in business costs and tackling corruption. 

The new policy reduces incentives for various sectors, including leather, agro products, and new markets. Exporters argue that losing incentives on crucial garment items like suits and shirts would prove detrimental to diversification and global competitiveness. Meanwhile, analysts argue that relying solely on cash incentives is unsustainable and masks underlying issues like high business costs and inefficient processes.

Overall, the phasing out of export incentives presents a complex scenario for Bangladesh. While it aligns with WTO rules and might enhance long-term economic efficiency, it raises concerns for the export sector, particularly the garment industry, in the short term. To manage this transition effectively, careful navigation and alternative support measures will be crucial.