The recent Government decision to curtail export incentives in preparation for Bangladesh’s transition from Least Developed Country (LDC) status to a middle-income country by 2026 has intensified difficulties for the leather industry, adding to existing woes tied to international certification challenges.
Media reports maintained this citing industry stakeholders, who held that the abrupt reduction in incentives, implemented without consultation, poses a significant threat.
Many business decisions made during the rawhide collection season factored in Government incentives, amplifying the impact of the sudden policy shift, they further opined.
Leather exporters have reportedly engaged with the Commerce Minister and are seeking the intervention of the Prime Minister to mitigate potential losses.
The central bank’s announcement on January 30 detailed the withdrawal of incentives for crust leather from 10 per cent, and a reduction from 10 per cent to 7 per cent for finished leather.
The decision aligns with World Trade Organization rules regarding cash incentives as export subsidies, effective from 1st January 2024 until 30th June 2024.
