Apparel exporters in the country will now get cash incentives and subsidies from the government on exports with a 20% local value addition as the Bangladesh Bank has lowered the threshold for value addition from 30%.
The central bank issued a circular to this effect on Monday.
Local value addition is calculated by deducting the import cost of materials used in production from the net FOB (free on board) export price.
At present, exporters receive 4% alternative cash assistance instead of customs bond and duty drawback in the export-oriented apparel sector.
A senior official of the Bangladesh Bank said the rate of local value addition has of late come down a bit against the export price because of an increase in the cost of imports, which has prompted the central bank to lower the value addition threshold.
According to the Bangladesh Bank circular, the new rate has been fixed as per a decision of the government. Incentive applications against shipped export shipments, which have not yet been resolved in the current financial year, will also come under the new guidelines, it says.