Bangladesh is set to begin importing cotton from the United States as part of a strategic initiative aimed at mitigating the risk of additional tariffs on its exports, Foreign Affairs Adviser Touhid Hossain said.
Speaking at a workshop titled "The Potential and Importance of Cotton Cultivation in Bangladesh for Saving Foreign Currency" on Monday (17 March) - jointly organised by the Economic Reporters Forum (ERF) and the Bangladesh Cotton Association, he underscored the significance of this move.
“The US government has imposed tariffs on various countries since Donald Trump took office. While Bangladesh has been exporting under existing tariff structures, there remains an element of uncertainty regarding future hikes. By importing cotton from the US and subsequently exporting garments made from it, we aim to create economic interdependence that discourages any additional tariff imposition,” he explained.
To strengthen domestic cotton production, the government is preparing to officially classify cotton as an agricultural product, enabling it to qualify for subsidies. Hossain indicated that a decision on this matter is expected within the next three months.
Additionally, he directed National Board of Revenue (NBR) Member (Customs, Export and IT) Moazzem Hossain, who was present at the event, to take immediate measures to eliminate the existing 4% advance income tax on locally produced cotton.
Addressing Bangladesh’s scheduled graduation from Least Developed Country (LDC) status in 2026, Hossain reiterated that businesses should have been prepared for the transition rather than seeking extensions.
“Even after LDC graduation, Bangladesh will continue to enjoy duty-free access to the European Union for an additional three years. I believe our business community is waiting for this grace period to make necessary preparations, and I am confident they will be ready within that timeframe,” he stated.
On the subject of the European Union’s Generalised Scheme of Preferences Plus (GSP+) facility, Hossain assured that Bangladesh would meet all required conditions to secure the trade benefits.
At the same event, NBR Member Moazzem Hossain noted that discussions were underway to extend bonded warehouse facilities to various business sectors, suggesting that these privileges could be initiated with cotton imports.
He further committed to presenting a proposal to withdraw the Advance Income Tax (AIT) on domestically produced cotton to the relevant NBR officials.
