Bangladesh will no longer be able to impose para-tariffs—additional taxes beyond customs duties on imported products to protect domestic industries—after graduating from Least Developed Country (LDC) status. Until now, the country has relied on measures such as Regulatory Duties (RD), Supplementary Duties (SD), minimum customs values, and Advance Income Tax (AIT) as forms of para-tariff protection.
Following graduation, however, such measures will no longer be permissible. As a result, Bangladesh will need to rely increasingly on trade remedy mechanisms as an alternative means of safeguarding local industries.
These recommendations were made in a research report prepared by the Bangladesh Foreign Trade Institute (BFTI) for the Bangladesh Trade and Tariff Commission (BTTC).
The report was developed through surveys, interviews, focus group discussions, and economic modelling, and examines Bangladesh’s current trade protection framework, international experiences, challenges faced by exporters, and future policy options.
According to the report, one of the greatest challenges after LDC graduation will be maintaining the competitiveness of domestic industries and export sectors in a more liberalised trading environment.
It argues that Bangladesh can no longer depend solely on tariff protection and must instead establish an effective trade remedy framework within international trade rules. Otherwise, many domestic industries could come under pressure from cheap and subsidised imports.
After analysing data from the National Board of Revenue (NBR), the research team found that at least 92 products classified at the four-digit HS code level may require protection.
The report analyses trade remedy cases involving Bangladeshi exports, including jute, hydrogen peroxide, textiles, and gloves. It notes that Bangladesh’s major limitations include weak legal and regulatory institutions, insufficient technical capacity, and a lack of reliable data.
The country also faces significant challenges in responding to anti-dumping investigations launched against Bangladeshi products abroad. Therefore, the report recommends developing a robust World Trade Organization (WTO)-compliant trade remedy system before and after LDC graduation to enable evidence-based protective measures in place of para-tariffs.
Asked what steps the Ministry of Commerce would take regarding the report’s recommendations, Commerce Secretary Ataur Rahman Khan told Prothom Alo on Monday, “Bangladesh has applied for a three-year extension to its LDC graduation timeline. We hope the extension will be granted. Even if we receive a shorter period, we are prepared to take the necessary measures. We will also give due importance to the recommendations contained in the BFTI research report.”
Protection needed for 92 products
After analysing data from the National Board of Revenue (NBR), the research team found that at least 92 products classified at the four-digit HS code level may require protection. Of these, 15 products are considered vulnerable to dumping in the domestic market.
The list of vulnerable products includes dried fruits, sugar confectionery, preserved fruits and nuts, rubber tyres for cars and motorcycles, split air conditioners, and toys. Various textile products have also been identified as being at risk.
Bangladesh has applied for a three-year extension to its LDC graduation timeline. We hope the extension will be granted. Even if we receive a shorter period, we are prepared to take the necessary measures.Commerce Secretary Ataur Rahman Khan
The report further states that domestic manufacturers may face greater competitive pressure in products such as woven cotton fabrics, synthetic and artificial fibre fabrics, pile and chenille fabrics, tulles and net fabrics, coated textiles, and knitted fabrics.
These products are currently protected through minimum customs valuation mechanisms. Following LDC graduation, alternative measures will be required to protect domestic industries.
Proposal for countervailing duties on 12 products from India and China
The study suggests that Bangladesh may consider imposing countervailing duties (CVDs) on 12 products manufactured under subsidy programmes in India and China.
For imports from India, the report highlights production-linked incentives (PLIs), capital subsidies, and other forms of support provided to products such as onions, dyes and pigments, cotton yarn, synthetic textiles, steel billets, stainless-steel products, and electronic integrated circuits.
The deadline is approaching, and there is no question that para-tariffs can no longer be maintained after LDC graduation. To address the challenges ahead, both the public and private sectors must strengthen their capacities.Trade expert and former BTTC member Mustafa Abid Khan
In the case of China, the report points to government grants, tax exemptions, VAT incentives, and other support measures benefiting the production of agricultural machinery parts, lithium-ion batteries, and solar panels.
Capacity constraints require reform
The report also identifies several weaknesses among Bangladeshi exporters. Drawing on experiences from anti-dumping and countervailing investigations involving sectors such as jute, hydrogen peroxide, textiles, and gloves, it notes that Bangladeshi firms often struggle to provide the required information, mount effective legal defences, and prepare technically sound responses.
The exporters’ most significant challenge remains limited institutional and technical capacity. Restricted access to information and procedural delays also act as major obstacles.
The report cites examples from India, Pakistan, China, the European Union, the United Kingdom, Malaysia, Vietnam, Indonesia, Brazil, and Argentina, where effective trade remedy systems are supported by digital monitoring tools, early warning mechanisms, rapid investigation procedures, specialised personnel, and strong databases.
It recommends introducing an HS six-digit-based early warning system for Bangladesh.
Additional policy recommendations
To strengthen the country’s export sector, the report puts forward several important policy recommendations. It emphasises expanding exports to Asian and Middle Eastern markets, which are geographically closer to Bangladesh. It also calls for improvements in port management, transport infrastructure, and trade facilitation systems to reduce logistics costs.
At the same time, efforts should be made to enhance product quality and diversification, thereby reducing dependence on specific markets or sectors.
Speaking to Prothom Alo, trade expert and former BTTC member Mustafa Abid Khan said, “The deadline is approaching, and there is no question that para-tariffs can no longer be maintained after LDC graduation. To address the challenges ahead, both the public and private sectors must strengthen their capacities. Easy access to production and import data from the private sector must also be ensured.”