The UK wants Bangladesh to take measures for ensuring a level playing field for both export processing zone factories and local producing units. Currently, Bangladesh apparel exporters enjoy a four per cent cash incentive against exports to non-traditional export destinations i.e. countries outside the EU, the US and Canada. Currently, four readymade garment sectors receive export incentives at four per cent. But foreign-owned clothing factories operating inside export processing zones are not eligible to enjoy such incentives. This is felt to be unfair since foreign firms operating in the readymade garment sector feel they contribute to job creation, skills training and tax revenues. So the UK wants such incentives to be provided for export processing zone factories too.

Bangladesh is planning to introduce a rebate of one per cent on all readymade garment exports. However, only Type C companies (100 per cent Bangladesh owned and resident in Bangladesh) within the export processing zones are entitled to get this incentive. British companies are upset the proposed one per cent export rebate in the current budget will exclude them.

This fiscal Bangladesh’s export earnings from the UK grew 4.51 per cent against an 11.76 per cent growth last fiscal year.