Import LC Opening Declines by 26.80% in FY23

Despite the government's implementation of import restrictions on luxury items and other policies aimed at alleviating the dollar shortage and economic crisis, the situation has yet to improve. Since April 2022, the Bangladesh Bank has enforced stringent measures, including imposing a 100% margin on the import of non-essential goods such as vehicles and luxury items. Additionally,

Bangladesh witnesses a gradual recovery in capital machinery imports. Data from Bangladesh Bank shows a 3% year-on-year growth in LC openings for capital machinery, reaching $1,557 million in the July-January period of the current fiscal year 2023-24.

Despite decreased raw material imports for the readymade garment (RMG) industry in Bangladesh, export earnings have remained steady from July FY23 to Dec FY24, as per Export Promotion Bureau (EPB) data. RMG sector exports grew by 1.72% to $23.39 billion in H1 FY24 and by 10.27% to $46.99 billion in FY23, despite a 17.3% and 22.20% decline in raw material imports in FY24 and FY23 respectively.

The recent price cut on 44 types of stents by the Directorate General of Drug Administration (DGDA) has led to a standoff with importers, disrupting treatment for heart patients in major hospitals in Dhaka. The price reduction, up to 46%, was aimed at addressing the "unreasonable" pricing of stents. Bangladesh requires 30,000-35,000 coronary stents annually, with the country relying on imports from the US, European Union, and other nations.

Car imports through Chattogram port decreased by 22% in 2023 compared to the previous year, and over the last five years, the decline has been 60%. Importers attribute this to issues related to opening letters of credit, stemming from the dollar crisis and the Russia-Ukraine war. The preference for Mongla port for car imports has intensified, with around 60% of the country's cars now imported through Mongla. In 2023, 24,150 cars were imported through Chattogram port, down from 30,880 in 2022 and 61,467 in 2019.

Capital machinery imports in Bangladesh saw a 1% year-on-year increase in the first six months of the fiscal year 2023-24, reaching $1.34 billion. The reversal in the downward trend reflects improving sentiment as political uncertainty subsides and exporters anticipate increased orders from Western buyers.