Bangladesh : risks losing ground to regional peers and rival economies unless it undertakes sweeping reforms in tariffs and trade facilitation within the next five years, a leading economist has cautioned. The warning comes amid growing concern that long-standing weaknesses in the country’s trade framework are undermining its position in global supply chains at a time of rising international competition.

Prolonged Delay in Trade Policy Reforms

Speaking at an event marking International Customs Day 2026, economist Zaidi Sattar said Bangladesh has gone nearly two decades without meaningful trade policy reform. He noted that the accumulated delays have created structural bottlenecks that now pose a serious challenge to the country’s economic momentum. According to Sattar, postponing reform any longer could leave Bangladesh struggling to keep pace with faster-moving economies in Asia and beyond.

Tariff Structure Seen as Major Obstacle

A central concern highlighted at the event was Bangladesh’s tariff system, which Sattar described as both excessively high and unnecessarily complicated. Compared with international benchmarks, the current tariff regime stands out for its layered rates and lack of transparency. This complexity, he argued, discourages investment and weakens Bangladesh’s competitiveness within global value chains, where efficiency and predictability are critical.

Customs Procedures Drive Up Business Costs

Beyond tariffs, cumbersome customs procedures were identified as a significant burden for traders. Lengthy clearance processes and administrative hurdles increase compliance costs for businesses, particularly exporters and importers operating on tight margins. Sattar stressed that these inefficiencies reduce Bangladesh’s attractiveness as a manufacturing and trading hub, calling for a decisive shift toward trade liberalisation and streamlined border management.

Five-Year Window for Critical Changes

The economist warned that time is limited. Without substantial progress in tariff rationalisation, tariff modernisation, and trade facilitation over the next five years, Bangladesh could fall behind competing economies that are actively reforming their trade systems. He emphasized that incremental adjustments would no longer be sufficient, urging policymakers to adopt comprehensive and coordinated measures instead.

Rethinking the Role of Trade Taxes

Sattar also pointed to the heavy reliance on trade taxes, which currently contribute roughly 2.5 percent of Bangladesh’s gross domestic product. He suggested that this dependence is neither sustainable nor aligned with modern trade practices. Looking ahead, he proposed reducing trade taxes to no more than 1 percent of GDP by 2030, arguing that a broader tax base and improved domestic revenue collection would better support long-term growth.

Call for a Modern Customs Administration

Despite the challenges, Sattar expressed optimism that Bangladesh could transition toward a modern customs administration. Such a system, he said, should prioritize facilitating trade rather than focusing primarily on revenue collection. By adopting international best practices, Bangladesh could improve efficiency at its borders while still safeguarding fiscal interests.

Non-Tariff Barriers Remain a Concern

Commerce Secretary Mahbubur Rahman echoed concerns about obstacles to trade, particularly non-tariff barriers that continue to restrict market access. He urged the National Board of Revenue to place greater emphasis on simplifying the trade regime. According to Rahman, recent discussions with visiting European Commission officials revealed a wide range of concerns, many linked directly to customs procedures rather than tariff levels.

Focus on Technical Barriers to Trade

Rahman clarified that international partners are not necessarily demanding steep tariff reductions. Instead, they are highlighting legitimate technical barriers to trade, such as complex documentation requirements and inconsistent application of regulations. Addressing these issues, he said, would go a long way toward improving Bangladesh’s trade relationships and business climate.

LDC Graduation Adds Urgency

The push for reform has gained added urgency as Bangladesh prepares to graduate from the United Nations’ Least Developed Country category. Once graduation occurs, the country will need to secure preferential market access through bilateral and regional agreements. Effective trade facilitation, Rahman noted, will be essential to maintaining export competitiveness in a post-LDC environment.