Responding to the directive, a three-member committee of the commission prepared a list of commodities and submitted it to the ministry. The list was later forwarded to the revenue board.

Commerce secretary Tapan Kanti Ghosh, in a review meeting at Ganabhaban on 7 November, briefed prime minister Sheikh Hasina about the list. The meeting discussed the overall financial condition of the country, including import control.

Asked about the current situation of the process, a top official of the NBR’s tariff section told Prothom Alo on Thursday that the process is underway. The authorities are reviewing the possible move’s impact on the revenue. A final decision will be taken soon.

Reasons behind import control

Bangladesh spends a large portion of its forex reserve to pay the import liabilities. On the flip side, it earns the foreign currencies from remittance, foreign investments and loans. The imports here witnessed a massive surge, but the remittance and export earnings did not follow the suit. It widened the trade deficit and ate up the forex reserve.

The reserve was USD 48 billion in August last year and it has now dropped to USD 34 billion. The crisis has pushed up the greenback’s exchange rate against the local currency. The dollar price, which was Tk 86 in May last year, has climbed to Tk 106, making the imports costlier.

In the fiscal year 2021-22, the country's import costs spiked by 25 per cent and exceeded USD 89 billion. But, when the imports were rising, the central bank did not adopt any cautionary measures.

The industrialists found the Bangladesh Bank’s lack of foresight is very acute. There are allegations that the regulator held up the dollar price artificially. When taka maintains a strong foothold against the dollar, it discourages the exports and encourages the imports.

Then governor of Bangladesh Bank, Fazle Kabir, refused to make any comment when he was asked why a timely step was not taken and the dollar price was held up artificially.

The Bangladesh Bank became active in July when it issued a notification canceling bank loans for the import of luxurious cars, beverages, furniture, cosmetics, household items, fruits and electronics products. In cases of products with minimal necessity, the importers were asked to open LCs (letters of credit) with full payment (margin).

Later, the government raised the regulatory duty on 135 products, including furniture, cosmetics, fruits, and similar products, in May this year, to curb the imports.

Export to drop by $1b

A report of the tariff commission recommended increasing import duty on 330 products including luxury and less important products. Imposing of higher tariff on these products is unlikely to affect local industry.

The tariff commission report recommended increasing customs duty (CD), supplementary duty (SD), regulatory duty (RD) and tariff on vehicles, electronics, home appliances, precious metals, cosmetics, apparel, leather goods, furniture, ceramic products, decoration items, fruits and flowers, processed foods and beverages, canned foods, chocolates, biscuits, fruit juices, soft drinks, alcoholic beverages, tobacco, tobacco products or its substitutes.

According to sources of commerce ministry and tariff commission, if the recommendations are followed at least $1 billion will be saved. Commerce secretary Tapan Kanti Ghosh told Prothom Alo, “As far I know the NBR is working as per tariff commission’s list and I have requested the NBR chairman to do it within the shortest possible time.”

Lack of farsightedness

Import has dropped in the country for the past couple of months. According to data from Bangladesh Bank, the country imported goods worth $18.72 billion in July-September this year.

Speaking at an event on 17 November, Bangladesh Bank governor Abdur Rouf Talukder said, imports fell by about $5 billion and there will be no crisis from January.

People concerned said opening of LCs has been made difficult instead of controlling imports by increasing tariff on selected products. So, import of raw materials, intermediate products and essential products has been more difficult affecting industry sector and economy. Had an increased tariff been imposed three months ago as per the tariff commission’s recommended list, situation would have not been such worse now.

When asked Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) senior vice president Mostofa Azad Chowdhury told Prothom Alo Bangladesh Bank had a lack of farsightedness as it could not understand as to which direction the situation was going.

The commerce ministry had sent a list and had the list been taken into consideration situation would have been less complex, he added.

Replying to a query on why the list had not been considered, Mostofa Azad Chowdhury said, “Pakistan banned import of 35 products and if we did similar measures, many might have thought we are going to face a situation like Pakistan.”

“Besides, I doubt whether any department or ministry can now take a decision solely, and all important decision come from the prime minister’s office,” he added.

*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by MIshbahul Haque and Hasanul Banna