In a proactive move to sustain the competitiveness of its leather and leather goods sector, the Bangladesh Government is devising a strategy to counteract the impacts of graduating from the least-developed country (LDC) status in 2026. This initiative comes as the country prepares to face restrictions on export subsidies, which are currently a significant support mechanism for its key export sectors.
The Ministry of Finance has recently established a committee tasked with exploring measures to enhance the export growth of leather products, alongside three other major sectors — jute goods, agriculture and agro-processed goods, and pharmaceuticals. This committee is comprised of representatives from various Governmental agencies, including the Ministries of Commerce and Industries, Bangladesh Bank, and the Export Promotion Bureau.
Currently, the leather and leather goods sector benefits from a 10 per cent cash incentive aimed at bolstering its export competitiveness. However, the sector has faced challenges; recent data from the Export Promotion Bureau indicates that export earnings from leather and leather products have declined by 11.6 per cent, amounting to US $ 1.039 billion in the fiscal year 2023-24.
The committee’s role will include assessing existing support mechanisms, identifying barriers to export growth, and recommending alternative financial and non-financial assistance strategies that do not involve export subsidies. The Government previously allocated approximately Taka 90.25 billion annually to support export-oriented sectors, which has been seen as a financial burden on the state.
As Bangladesh approaches its graduation from LDC status, officials emphasise the need for a robust framework to support the leather sector and ensure its resilience in the global market. The committee has been tasked with submitting its recommendations within the next two weeks, in hopes of outlining a comprehensive strategy to promote and sustain the leather industry’s export potential in the post-LDC era.
