The government has issued a new import policy order, easing restrictions on letters of credit (LCs), simplifying imports and prioritising free trade.

The Import Policy Order 2026-29 seeks to facilitate trade, attract domestic and foreign investment and align Bangladesh with global commerce after its LDC graduation.

Issued Tuesday by the commerce ministry, the new order replaces the 2021-24 import policy.

It introduces several changes to modernise trade procedures and reduce banking complexities, while opening up both opportunities and challenges for local industries, businesses and international trade relations.

Imports Without LCs

The previous policy allowed imports under sales or purchase contracts without LCs, but imposed value limits and conditions on certain products and sectors.

Commercial importers could previously import goods without LCs up to an annual limit of $500,000. The new policy removes that ceiling entirely, allowing imports through sales or purchase contracts.

For the first time, the policy also includes provisions for establishing free trade zones and central bonded warehouses to develop international logistics hubs.

It defines “Bangladeshi expatriate” for the first time and promises easier imports of capital machinery and raw materials for approved industries.

Export-oriented industries will also get greater scope to import raw materials and production inputs on a “free-of-cost” basis to diversify exports and boost higher-value products.

The policy could weaken decades of protection for domestic industries through tariff and non-tariff barriers. But alignment with WTO trade facilitation standards could strengthen Bangladesh’s position in negotiating Free Trade Agreements and Preferential Trade Agreements.

With fewer import controls, however, imports could surge. If market access for Bangladeshi products does not expand correspondingly, the trade deficit could widen over time.