WORLD TRADE  
ORGANIZATION  WT/BOP/G/13 
23 November 2004 
 (04-5089) 
Committee on Balance-of-Payments Restrictions Original:   English 
  
 
CONSULTATIONS WITH BANGLADESH 
 
Basic Document Supplied by Bangladesh
 
  
1. Bangladesh is a low-lying riverine country locat ed between the foothills of the Himalayas and 
the Bay of Bengal.  The land is devoted mainly to  agriculture due to its fertile alluvial soil.  
Bangladesh is one of the most densely populate coun tries in the world with an area of 147,570 m
2 and 
a population of 135.2 million in 2004 .  Bangladesh belongs to the group of least-developed countries.  
In FY 2003-2004 its gross domestic product (GDP) was worth Taka 3325.67 billion at the current 
market price, (approx. US$56.42 billion), an incr ease from Taka 2,370.86 billion in FY 1999-2000 
(approx. US$47.12 billion).  During the last decade, GDP growth remained steady and fairly robust at 
an average annual rate of 5.0%, although there wa s a decline in GDP growth in FY 2001-2002 mainly 
due to worldwide recession.  During this peri od per capita GDP increased steadily and stood at 
US$421 in FY 2003-2004.  Such an increase could be attributed to steady growth and the country’s success in checking population growth, which sto od at 1.5% in FY 2003-2004.  However, these 
growth rates fall short of the estimated 7.0% growth  rate needed for reducing the poverty that afflicts 
one-third of Bangladeshis, who live below poverty line.   
2. Dominance of agriculture in the country’s ec onomic activities has been decreasing, gradually 
contributing 22.83% to GDP in FY 2003-2004 dow n from 25.58% in 1999-2000.  However, the 
dominating role of agriculture is still prevalent in  the country’s economic activities judging from its 
contribution in the country’s total employment , which accounts for about 62.3% of the total 
employment.  Contribution of service and manufacturing sectors to the GDP is gradually increasing.  Given the country's high incidence of poverty, its dense population, and its vulnerability to natural 
disasters, including periodic flooding and cyclones, food security is a major policy objective of the Government.  Bangladesh is a net food-importing c ountry and a large recipient of foreign aid, a 
substantial portion of which is food grain.   
3. The Government of Bangladesh is continui ng with its trade liberalization programme, 
structural reforms and privatization.  To fu rther liberalize the country’s import regime, the 
Government has introduced a three-tier tariff struct ure with maximum tariffs at 25% in the current 
fiscal year.  Its import regime has also been made more liberal by bringing down the number of restricted products.  To better protect the exte rnal competitiveness of the Taka and to enhance 
resilience of the economy in responding to sh ocks, Bangladesh formally stepped over to a 
market-based exchange rate for the Taka from 31 May 2003, doing away with the pre-announced rate 
band for US dollar transactions with banks.   
4. During the last five years both domestic saving and investment have continued to increase, at 
a very slow rate.  The marginal increase in shares of domestic saving and total investment in GDP is 
mainly because of increased participation of the private sector.  During the last five years, 
Government expenditure has continued to increase, wh ile revenue collection has increased at a faster 
rate due to the Government’s effort at extending and tightening the income tax and VAT net.  As a 
result, budget deficit has declined in terms of share in GDP.  The Government has undertaken 
measures to further widen the VAT and income tax net and to strengthen the relevant organizations. WT/BOP/G/13 
Page 2  
 
Table 1 
Some Selected Macroeconomic indicators 
 
  1999/00 2000/01 2001/02 2002/03 2003/04 
Current GDP at factor prices (in 
billion Taka) 2,370.86 2,535.46 2,732. 01 3,005.80 3,325.67 
Constant GDP at factor cost (in 
billion Taka 1995-1996 prices) 2,049.28 2,157.35 2,252. 61 2,371.01 2,501.81 
GDP growth at constant price 5.94 5.27 4.42 5.26 5.52 
Per Capita GDP (US$) 368 362 361 389 421  
Inflation (annual average ) 2.79 1.94 2.79 4.38 5.87 
Share of main sectors in GDP, at 
constant factor cost (%)       
Agriculture, forestry, and li vestock 19.49 19.51 18.58 18.22 17.68 
Fishing 6.09 5.51 5.40 5.25 5.15 
Mining and quarrying 1. 03 1.07 1.07 1.09 1.10 
Manufacturing 15.40 15.59 15.76 15.97 16.25 
Electricity, gas, and wa ter 1.43 1.46 1.51 1.54 1.58 
Construction 7.48 8.08 8.41 8.63 8.86 
Wholesale and retail trade 13.35 13.48 13.77 13.87 14.00 
Hotels and restaurant s 0.63 0.64 0.66 0.67 0.68 
Transport, storage, and 
 communication 9.20 9.42 9.62 9.76 9.86 
Financial services 1.57 1.57 1.61 1.63 1.65 
Real estate, owners hip of  dwellings, 
and business services 8.88 8.71 8.63 8.48 8.34 
 Public administration and 
 defence 2.55 2.56 2..60 2.60 2.61 
 Education 2.20 2.24 2.31 2.36 2.40 
 Health and social serv ices 2.20 2.19 2.21 2.21 2.22 
Community, social, and personal 
 services 8.13 7.96 7.87 7.72 7.61 
Saving and investment (as % of 
GDP)       
Domestic saving 17. 90 18.00 18.16 18.21 18.27 
Gross investment 23. 02 23.09 23.15 23.41 23.60 
Out of this        
Public 7.41 7.25 6.37 6.20 6.12 
Private 15.61 15.84 16.78 17.21 17.47 
Central government budget (as % 
of GDP)       
Total expenditure 14.54 14.75 14.92 14.61 15.63 
Current expenditure 7.67 8.10 8.31 8.42 8.71 
Annual development progra mme 6.42 6.27 5.51 5.62 6.10 
Other capital and net le nding 0.44 0.38 1.10 0.56 0.81 
Total revenue, of whic h 8.47 9.60 10.21 10.35 10.87 
Tax Revenue 6.78 7.80 7.81 8.30 8.74 
Non-tax revenues 1.69 1.80 2.40 2.05 2.13 
Overall budget balance       
  Excluding grants -6.10 -5.10 -4.70 -4.20 -4.80 
 Including grants -4.50 -4.10 -3.70 -3.40 -4.31 
Domestic financing 2.80 2.80 2.60 1.90 2.00 
Foreign financing 2. 50 2.00 2.10 2.30 2.80  WT/BOP/G/13 
 Page 3 
 
 
  1999/00 2000/01 2001/02 2002/03 2003/04 
Medium and long-term external 
debt (US$ million) 16,211 15,074 16,276 17,475   
Exports f.o.b.( US$ million) 5,752 6,467 5,986 6,548 7,603 
 Growth 8.27 12.43 -7.44 9.39 16.10 
Imports c.i.f. (US$ million) 8,374 9,335 8,540 9,658 10,903 
Growth 4.60 11.50 -8.50 13.10 12.50 
Trade-GDP ratio (% of GDP) 30.00 33.60 30.60 31.20 32.74 
Social indicators       
 Population (million) 128.10 130.03 131.60 133.40 135.20 
Source :  Bangladesh Economic Review, 2004. 
 
 5. Dependence of economic activities on external tr ade continued to increase with a gradual rise 
of trade-GDP ratio during the last five years.  R eady-made garments conti nue to dominate the export 
sector, contributing to more than 75% of the countr y’s total export earnings (Table 2).  Developed 
countries continue to be the main markets of Ba ngladesh’s export products and performance of export 
in these countries has been robust since the 1990s.  However, since 2001, Bangladesh exports to the 
US have declined rapidly (Table 3)  and this trend is prevailing.   
 
Table 2  
Composition of Bangladesh export 
(US$ Million) 
 
 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 
TOTAL 5,752.20 6,467.30 5,986.09 6,548.44 7,602.99 
Of which:       
 Woven garments  3,082.56 3,364.20 3,124.56 3,258.27 3,538.07 
 Knitwear 1,269.83 1,496. 36 1,459.24 1,653.83 2,148.02 
 Frozen shrimp and fish 343.82 363.23 276.11 321.81 390.25 
 Jute goods 262.70 229.11 241.61 257.18 246.45 
 Leather  195.05 253.93 207.33 191.23 211.41 
 Raw jute 71.62 67.18 61.13 82.46 79.70 
 Tea 17.69 21.58 17.38 15.57 15.81 
 Chemical fertilizer 59.88 68.17 47.93 78.61 80.67 
 Petroleum by product 11.42 10.16 9.90 31.23 37.02 
 Others 437.63 593.82 540.90 658.35 855.59 
Source :  Export Promotion Bureau. WT/BOP/G/13 
Page 4  
 
 
Table 3 
Major Export Destination 
(US$ Million) 
 
Country 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 
USA  2273.76 2500.42 2218.79 2154.45 1966.58 
UK 500.00 594.18 647.96 778.25 898.21 
Germany 658.71 789.88 681.44 820.42 1298.54 
France 367.37 365.99 413.69 417.51 552.96 
Belgium 225.89 253.91 211.39 289.48 326.96 
Italy 248.28 295.73 262.31 258.99 315.93 
Netherlands 282.77 327.96 283.36 277.95 290.44 
Canada 110.63 125.66 109.85 170.26 284.33 
Japan 97.64 107.58 96.13 108.03 118.16 
Others 987.15 1105.99 1061.17 1270.83 1550.89 
Total 5752.20 6467.30 5986.09 6548.44 7602.99 
Source :  Bangladesh Economic Review, 2004, and Export Promotion Bureau. 
 
 
6. The country’s imports continued to increase in tandem with exports (Table 4).  As a result, 
the trade deficit continued to widen.  Despite the widening of trade deficit, the country’s balance-of-
payments situation has improved gradually si nce 2001-2002 mainly because of increased worker 
remittance from abroad (Table 5).  During FY 2000-2001 Bangladesh faced the worst balance-of-
payments situation due to the increase in trade deficit and decrease in worker remittance, which largely attributed to an economic slow-down all over the world.  Although the balance-of-payments 
situation has improved in recent years, it is fr agile since Bangladesh’s external trade remains 
vulnerable to natural disaster and other external factors.  Although Bangladesh has not faced any 
major natural disaster since 1998 (which is consider ed to be a factor for improving the balance-of-
payments situation), at the beginning of FY 2004-2005, Bangladesh experienced country-wide 
flooding twice in succession, which has adversel y affected all economic activities country-wide, 
including agriculture.  As a resu lt, in the current year Bangladesh may face increased import demand 
of food grain, which may adversely affect the balance-of-payments situation.  Moreover, the 
possibility of an adverse effect on the balance-o f-payments situation when the MFA quota regime is 
phased out on 1 January 2005 cannot be ignored sin ce the garment sector alone contributes to 75% of 
the country’s total exports and there is a decline in  the exports of garments to the United States, the 
single largest market of Bangladesh garments.    WT/BOP/G/13 
 Page 5 
 
 
Table 4 
Composition of Bangladesh’s Import 
(US$ Million) 
 
Srl. Commodity 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 
A. Food grains 381 349 186 409 431 
1 Rice 115 172 15 211 144 
2 Wheat 266 177 171 198 287 
B.  Other commodities 7,328 8,301 7,727 8,522 9,585 
1 Milk and cream 60 62 59 61 61 
2 Spices 18 15 13 32 30 
3 Oil seeds 90 64 72 64 73 
4 Edible oil 256 218 251 364 471 
5 Pulses (all sorts)  113 86 88 145 120 
6 Sugar 30 46 23 104 110 
7 Clinker 59 106 150 144 139 
8 Crude petroleum 232 273 242 267 252 
9 POL 406 566 481 620 770 
10 Chemicals 278 339 335 353 406 
11 Pharmaceutical products 27 33 39 44 45 
12 Fertilizers 140 129 107 109 150 
13 Dyeing and tanning materials 71 91 87 86 109 
14 Plastics and rubber articles 
thereof  230 261 250 281 367 
15 Raw cotton 277 360 312 393 583 
16 Yarn 300 322 283 270 323 
17 Textile and articles th ereof 1,153 1,291 1,063 1,106 1,295 
18 Staple fibre 43 39 39 41 57 
19 Iron and steel and other base 
metals 393 464 413 455 479 
20 Capital goods 2,133 2,515 2,617 2,735 2,875 
21 Others  1,019 1,021 803 848 870 
C. Import by EPZ 665 685 627 727 887 
  Total imports  8,374 9,335 8,540 9,658 10,903 
Source :  Statistics Depart ment, Bangladesh Bank. WT/BOP/G/13 
Page 6  
 
Table 5 
Balance-of-Payment situation in Bangladesh 
(US$ Million) 
 
Items 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004P 
Trade balance -1,865 -2,011 -1,768 -2,215 -2,319 
 Export f.o.b. (including EPZ) 5,701 6,419 5,929 6,492 7,521 
 Import, f.o.b (including EPZ)  -7,566 -8,430 -7,697 -8,707 -9,840 
Services -645 -914 -499 -691 -874 
 Receipt 849 759 865 887 924 
 Payment -1,494 -1,673 -1,364 -1,578 -1,798 
Income -302 -344 -402 -358 -374 
 Receipt 97 97 50 64 63 
 Payment -399 -441 -452 -422 -437 
 Of which: worker remittance -160 -168 -161 -167 -175 
Current transaction 2,394 2,171 2,826 3,440 3,743 
 Official 165 72 69 82 61 
 Private 2,229 2,099 2,757 3,358 3,682 
 Of which: worker remitt ance  1,949 1,882 2,501 3,062 3,372 
Current account balance -418 -1,098 157 176 176 
Capital account 561 432 410 428 196 
 Capital transfers 561 432 410 428 196 
Financial account -166 682 391 413 78 
 Foreign direct investment (net) 383 550 391 376 385 
 Portfolio investment 0 0 -6 2 6 
 Other investment -499 132 6 35 313 
 MLT loans (excluding suppliers credit) 806 790 733 918 544 
 MLMT amortization payment -396 -416 -435 -452 -397 
 Others long-term loan (net) 127 -13 -42 -20 -41 
 Others short-term loan (net) 71 31 63 142 13 
 Other capital -190 -114 -87 -125 125 
 Trade credit (net) -641 -260 -253 -499 321 
 Commercial Bank -276 114 27 71 14 
 Asset -161 147 -90 217 86 
 Liabilities -115 -33 117 -146 -72 
Errors and omissions 152 -297 -550 -202 -279 
Overall balance 179 -281 408 815 171 
 Reserve assets -179 281 -408 -815 -171 
 Bangladesh Bank 179 281 -408 -815 -171 
 Assets  -79 302 -276 -887 -235 
 Liabilities -100 -21 -132 72 64 
 
P Provisional 
Source :  Statistical Department, Bangladesh Bank. 
 
7. The Imports and Exports (Control) Act, 1950 empowers the Government to regulate the 
import and export of goods and services.  The Import Policy Order (IPO), which governs the  WT/BOP/G/13 
 Page 7 
 
 
conditions for imports, is formulated under the au thority of the 1950 Act.  Previous Import policy 
Order 1997-2002 has been replaced by the new Import Policy Order 2003-2004 on 13 March 2004.  
As of October 2004 Bangladesh maintains import rest rictions under balance-of-payments as listed in 
Table 6.   
Table 6 
Items Restricted under BOP as of October 2004 
 
Srl H.S. 
Heading 
Number H.S. Code 
Number Description of items Type of restriction 
1. 01.05 All H.S. 
Codes Chicks except for "parent stock" and "grand-parent stock". Banned 
2. 04.07 0407.00 Eggs except "hatching eggs". Banned 
3. 48.19 All H.S. 
Codes All cartons except (1) Outer carton:  system which is used in 
State Express 555 cigarettes;  and (2) All types of carton 
except laminated inner carton used for export of all frozen food 
including shrimps. Banned 
4. 50.07 All H.S. 
Codes Woven fabrics of silk or of silk waste. Banned 
5. 55.12 to 
55.16 All H.S. 
Codes (a) Grey cloth, all sorts. 
(b) Combat cloth. (a) Banned 
(b) Restricted © Importable only by 
 defence service 
 sector 
 
6. 60.01-
60.02 All H.S. 
Codes All items except knit fabrics, me sh fabrics, pocketing cloth, 
ribbing materials, nylon shirti ng and knit fabric, brassiere 
padding. Banned 
7. 17.01 All H.S. 
Codes Edible Gur (Molasses) Re stricted – subjected to 
the conditions prescribed by the Government for 
import in limited quantity 
8. 25.01 All H.S. 
Codes (a) Common salt, except table salt. 
(b) Table salt. 
(c) Industrial salt. (a)  Importable subject 
 to the conditions 
 prescribed by the 
 Government 
(b)  Importable only by 
 foreign exchange 
 earning hotels  
(c)  Importable by the 
 Industry as raw 
 material , uses of 
 which is supervised 
 by the Board of 
 Investment.   
9. 52.08 to 
52.12 All H.S. 
Codes (i) Grey cloth, all sorts. 
(ii) Indigo denim (jeans fabric s) 100% cotton fabrics above 
36 inches width (in than or roll) not in cut pieces or cut 
to size. 
(iii) Combat cloth;  and 
(iv) Drill and cellular dyed including mineral khaki. (i)  Restricted 
(ii) Restricted 
(iii) Importable only by 
 defence service 
(iv) Importable by public 
 sector agencies only  on the basis of 
 recommendation of
 Ministry of Textiles 
Source :  Import Policy Order, 2003-2006. 
 WT/BOP/G/13 
Page 8  
 
8. Since the last consultation, Bangladesh has rem oved the quantitative restrictions on the items 
listed in Table 7.  As can be seen Bangladesh  has maintained its commitment to the WTO on the 
phasing out of balance-of-payments restrictions  submitted to the WTO on 15 December 2000.  
Moreover, the Government has withdrawn the import restriction on sugar and nylon ropes earlier than 
the scheduled date.  Furthermore, Bangladesh has al so relaxed its import regime on salt by allowing 
the import of industrial salt by the industry sector as a raw material.   
9. Bangladesh is committed to withdraw balance- of-payments restrictions on the remaining 
items as per the schedule submitted by Bangladesh on 15 December 2000 (WT/BOP/N/54), and in line with the decision taken by the BOPs Co mmittee on approval of maintenance of import 
restrictions in Bangladesh on chicks, eggs, sa lt and carton until 2009.  A phase-out plan for the 
restrictions on these items will be submitted in 2007.   
 
Table 7 
Items on which import restrictions have been withdrawn  
since last BOP consultation  
 
Srl H.S. Heading 
Number H.S. 
Code 
Number Description of items 
1. 17.01 All H.S. 
Codes (a) Raw sugar (white crystal sugar or re fined crystal sugar with polarization not 
less than 99.7 in either case).  Unrefined sugar/Gur. 
(b) Other sugars (beet sugar an d cane sugar in solid form). 
(c) Sucrose, chemically pur e sugar and refined sugar. 
2. 52.08 to 
52.12 All H.S. 
Codes All items except items mentioned below: 
(i)   Long cloth (white only up to 33s counts; and width up to 36 inches. 
(ii) Poplin including shirting white, dyed, printed, striped and checks, up to 40s 
counts and width up to 36 inches. 
(iii) Cambric including shirting white, dyed , printed, striped and checks up to 40s 
counts and width up to 36 inches. 
(iv) Serge and gabardine of width up to 45 inches of all constructions. 
(v) Twill and corduroy of width up to 45 inches of all constructions. 
(vi) Mull, organdie, lawn, voile white, dyed or printed up to 65s counts and width 
35 inches. 
(vii) Flannel white, dyed and printed up to 45 inches width. 
(viii) Cotton synthetic blended suiting of a ll constructions up to 60 inches width. 
(ix) Cotton synthetic blended suiting white, dyed and printed up to 45 inches width. 
(x) Umbrella cloth.  WT/BOP/G/13 
 Page 9 
 
 
Srl H.S. Heading 
Number H.S. 
Code 
Number Description of items 
3. 54.07 and 
54.08 All H.S. 
Codes (i) Shirting and suiting of 85% or more by weight of synthetic or man-made fibre 
(synthetic, regenerated or blended yarn or  both) and similar fabric in any form, 
including felts and cut pieces except polyester shear of mesh 80-150 required 
for screen printing machine/table and source fabrics of 85% or more by weight, 
of synthetic or man-made fibre (synthetic , regenerated or blended yarn of both) 
in pieces 5.50  yards to 6 yards not in than or roll. 
(ii) Felts, cut pieces, fabrics cut into sizes of piece goods;  and 
(iii) Cotton synthetic blended suiting of all constructions for screen printing 
machine/table. 
4. 55.12 to 
55.16 All H.S. 
Codes The following except polyester shear of mesh 80-150 required for screen printing 
machine/table. 
(i) Shirting and suiting of 85% or more by weight of synthetic or man-made 
fibre (synthetic, regenerated or blended yarn of both) and similar fabrics in 
any form; 
(ii) Felts, cut pieces, fabrics cut into sizes and prices goods; 
(iii) Cotton and synthetic blended suiting white, dyed printed above 45 inches 
width;  and 
(iv) Cotton synthetic blended suiting of al l constructions above 60 inches width. 
5. 56.07 5607.41 
to 
5607.90 
 Ropes made of nylon and polythene except nylon cord for V-belt. 
6. 90.28 9028.30 Single-phase el ectric meter (in comple tely built-up condition). 
 
7. 17.01 All H.S. 
Codes (a) Raw sugar (white crystal sugar or re fined crystal sugar with polarization not 
less than 99.7 in either case).  Unrefined sugar/Gur. 
 
(b) Other sugars (beet sugar an d cane sugar in solid form). 
 
(c) Sucrose, chemically pur e sugar and refined sugar. 
 
8. 90.28 9028.30 Parts and co mponents of electric meter and pa rts and components of single-phase 
electric meter in CKD SKD condition. 
 
 
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