Govt lifts LC value ceiling, opens free trade zones in new 3-year import policy

The government has overhauled the country's import regime with a new three-year policy that gives greater flexibility to ease restrictions on essential goods and removes the value ceiling on imports without letters of credit.

The policy also introduces free trade zones and expands facilities for expatriate investors, while tightening regulatory oversight of medical and controlled goods.

The Import Policy Order 2026-2029, gazetted by the Ministry of Commerce on Monday under Section 3(1) of the Imports and Exports (Control) Act, 1950, came into effect immediately and will remain in force until 31 December 2029.

The previous Import Policy Order 2021-2024 expired on 30 June 2024 but remained in force until the new order was issued.

Under the new policy, the government may, in the public interest, relax conditions for importing controlled goods through general or special orders issued by public notification.

The provision allows it to ease import restrictions when necessary to ensure adequate supplies of food and energy, support export diversification and expansion, retain existing export markets, encourage investment and facilitate trade.

The government may also relax conditions or regulatory requirements under the order in connection with free trade agreements (FTAs), comprehensive economic partnership agreements (CEPAs), economic partnership agreements (EPAs), unilateral agreements and bilateral agreements, either with or without conditions.

The policy further widens access to raw materials for export-oriented industries, with the government aiming to facilitate business, attract investment, and boost exports.

Imports without LCs

One of the major changes is the removal of the value ceiling on imports made through sales or purchase contracts without LCs.

Under the previous Import Policy Order 2021-2024, industrial and commercial importers could bring in goods without LCs in certain cases, subject to value limits and other conditions. Commercial importers could make payments from Bangladesh up to an annual limit of $500,000, with separate limits for certain products.

The new policy removes the value restriction, allowing industrial and commercial importers to bring in goods through sales or purchase contracts without a value ceiling, alongside imports made through LCs.

The change is intended to modernise the import system, facilitate business, attract investment, boost exports and make it easier for industries to obtain raw materials. It could also reduce reliance on LCs and make it easier to use payment methods commonly used in international trade.

Greater use of non-LC transactions, however, will require monitoring of product pricing, foreign-exchange management, over- and under-invoicing and money-laundering risks.

FTZs, bonded warehouses

The new policy also provides for free trade zones (FTZs) and central bonded warehouses, with the government seeking to strengthen Bangladesh's potential as a regional trade, logistics and re-export hub.

Unlike the 2021-2024 order, which provided bond facilities and other benefits for export-oriented industries, the new order explicitly includes central bonded warehouses as part of the country's trade and logistics infrastructure.

The policy also seeks to improve the storage and supply of raw materials for export-oriented industries. The FTZ provisions are part of a broader effort to facilitate industrial development, investment and trade while reducing supply-chain delays and production costs.

The introduction of FTZs is expected to support Bangladesh's export strategy and investment facilitation efforts as the country prepares for graduation from least developed country (LDC) status.

More support for exporters

The new policy expands facilities for importing raw materials and production inputs on a fee-at-cost basis for various export-oriented industries, with the government seeking to diversify exports and increase production of higher value-added goods.

Easier access to raw materials is also intended to help exporters maintain international competitiveness by reducing production costs and improving access to necessary inputs.

The broader framework covers import financing, investment, logistics, re-export and access to production inputs, giving export-oriented businesses more flexibility in sourcing materials.

Easier facilities for expatriate investors

For the first time, the policy defines an "expatriate Bangladeshi" and provides easier procedures for importing capital machinery, machinery parts and raw materials for their approved industrial establishments.

It also allows modern international payment methods in line with Bangladesh Bank's existing foreign-exchange regulations, with the aim of encouraging expatriate Bangladeshis to invest in industries in Bangladesh.

Tighter rules for medical imports

Alongside the measures to facilitate trade and investment, the policy sets regulatory requirements for medicines, medical goods and certain restricted products.

Active ingredients, excipients, auxiliary materials and packaging materials used for medicines may be imported subject to the quantities, prices, conditions and limits set by the Directorate General of Drug Administration (DGDA), where applicable.

Other health and medical goods, machinery and spare parts, surgical apparatus and equipment will also require approval from the DGDA for import, where applicable.

The policy retains conditions governing prohibited, restricted and conditionally importable goods. 

Prohibited and restricted goods may be imported with permission from the commerce ministry after the relevant conditions have been fulfilled, while conditionally importable goods must comply with the requirements specified for their import.

HS codes and trade agreements

The new policy also seeks to reduce complications arising from discrepancies between Harmonised System (HS) codes and product descriptions during imports, which can cause delays and difficulties in the import process.

The government has also included provisions allowing it to relax conditions or regulatory requirements under the policy in connection with FTAs, CEPAs, EPAs, unilateral agreements and bilateral agreements.

Such flexibility is intended to facilitate trade and exports, retain existing export markets and encourage investment as Bangladesh enters into different trade arrangements.