Major import policy shift allows imports without LC

• Import of Industrial and Commercial Goods Without Price Ceiling Through Contract
• Payment Through Open Account System
• Facility for Sourcing Materials Locally in Export Oriented Industries

The country’s import management has undergone major changes under the new Import Policy Order 2026 to 2029. Under the new policy, all importable goods in the industrial and commercial sectors can be imported through purchase and sale agreements without opening a letter of credit, and without the obligation of a fixed price ceiling. At the same time, the opportunity has been given to pay import prices through the open account system in specific cases. As a result, the import process will become simpler, and some flexibility will also be created in banking procedures for businessmen.

Under the new policy, significant facilities have also been given for importing and locally sourcing materials used in production by export oriented industrial establishments.

Alongside sourcing materials from local sources through back to back letters of credit in local currency, the opportunity has been provided to source materials free of cost from local sources. Necessary guidance has also been given regarding the import and sourcing of production materials under the bonded warehouse system.

On Sunday (September 13), the Foreign Exchange Policy Department 1 of Bangladesh Bank issued a circular in this regard. The circular has instructed the concerned banks to settle transactions related to imports and local sourcing by properly following the provisions of the new policy.

Effective Until 2029:

The Import Policy Order 2026 to 2029 was issued through SRO number 308 Law/2026, dated August 24, 2026, issued by the Ministry of Commerce. The new order will remain effective until December 31, 2029. However, if no new import policy order is issued within that time, the provisions of the current order will remain effective until a new order is issued.

The government gazette has also confirmed the publication of the Import Policy Order 2026 to 2029 on August 24, 2026. As a result of the new policy, this will be the main policy framework for conducting the country’s import activities in the coming years. Importers, industrial establishments, exporters and authorized dealer banks will have to conduct import and related foreign exchange transactions by following the provisions of this policy.

Payment Through Open Account System:

One of the most important changes in the new import policy is the opportunity to pay import prices through the open account system. This opportunity has been provided in Article 5(M) of the Import Policy Order. Bangladesh Bank’s circular has also specifically mentioned this matter and informed the authorized dealer banks.

Procedural flexibility compared to before may be created in the case of import transactions under the open account system. In particular, the opportunity to conduct transactions based on mutual trust between buyers and sellers with long standing business relationships in international trade will increase. However, existing laws, rules and Bangladesh Bank’s instructions regarding foreign exchange transactions must be properly followed.

In this regard, while facilities will be created for importers, the responsibility of verification and document preservation will also remain important for banks. This is because although the import process has been simplified in the new policy, banks have not been exempted from the rules and regulations of foreign exchange transactions.

Opportunity to Import Without LC and Without Price Ceiling:

The most discussed change in the new policy has come in the import of industrial and commercial sectors. According to Article 6(3) of the Import Policy Order, all importable goods in the industrial and commercial sectors can be imported through purchase and sale agreements without opening a letter of credit, without the obligation of a fixed price ceiling.

As a result, an opportunity has been created for importers to reduce dependence on opening letters of credit for importing goods. Arrangements for importing goods can be made based on agreements between buyers and sellers. In particular, for establishments that have regular business relationships with foreign suppliers, this system may provide an opportunity to speed up activities.

However, this facility does not mean that all types of goods can be imported under any conditions. The Import Policy Order contains provisions regarding the classification of goods, prohibitions, controls, necessary approvals and other applicable provisions. Therefore, although the opportunity exists to import without opening an LC, importers must follow all applicable provisions regarding the relevant goods and transactions.

Facility for Sourcing Local Materials in Export Oriented Industries:

Important facilities have also been provided in the new import policy for export oriented industrial establishments. Article 25 includes detailed provisions regarding the import and sourcing of materials used in production by export oriented industrial establishments. Under this, production materials can be sourced from local sources through back to back letters of credit in local currency. At the same time, the opportunity to source materials free of cost from local sources has also been provided.

This system of locally sourcing materials can play an important role in reducing production costs and time for export oriented industries. In particular, if necessary materials for the production process can be quickly sourced in various export oriented industries including garments, the time pressure on production and export activities may decrease somewhat.

In addition, necessary guidance has also been provided under Article 25 regarding the applicability of the bonded warehouse system in the import or sourcing of production materials. In other words, the opportunity has been created to operate the import system of export oriented industrial establishments in coordination with bond facilities.

Back to Back LC for Bonded Warehouse License Holders:

According to Part G of Bangladesh Bank’s Circular 30, permission existed to open back to back letters of credit in favor of export oriented industrial establishments holding bonded warehouse licenses. The new circular states that the provisions of the relevant Part G of that circular will be considered amended as necessary, in line with the provisions of the new Import Policy Order.

This has created policy coordination in import and production management for bond facilitated export oriented industrial establishments. At the same time, if there is any inconsistency between previous instructions and the new import policy, the opportunity has been created to conduct relevant activities by giving priority to the provisions of the new policy.

Increased Responsibility on Banks:

Although the process has been simplified in various areas for importers under the new import policy, the responsibility of authorized dealer banks has not decreased. Rather, instructions have been given to properly follow the Import Policy Order 2026 to 2029 and the prevailing rules related to foreign exchange transactions while settling transactions related to import and local sourcing.

Bangladesh Bank has said that authorized dealer banks must properly comply with the provisions of the Import Policy Order and the rules followed in the foreign exchange transaction system while settling transactions related to the import of goods or local sourcing of materials. All concerned parties have also been asked to be informed about the content of the new import policy order and to take necessary measures.

As a result, importers will need to ensure necessary documents, agreements, product descriptions and the validity of transactions through banks while availing the new facilities. In other words, although LC is not mandatory, banking oversight is not being completely eliminated.

New Step Towards Easing Business:

One of the main goals of the new policy is to create necessary flexibility in the import process. The opportunity to import without LC through contracts without price ceiling in the industrial and commercial sectors, and the arrangement for payment through the open account system in specific cases, have created new options for businessmen.

On the other hand, if the opportunity for export oriented industrial establishments to source materials from local sources increases, the participation of local suppliers in the production system may increase. The opportunity to source materials through back to back letters of credit in local currency will create an opportunity to make the supply system of export oriented industries more effective.

However, how effective these facilities will actually be will depend on banking procedures, document verification, foreign exchange transaction provisions and the proper application of the new system among importers. At the same time, other regulatory provisions of the import policy will remain equally effective.

Long Term Policy Framework:

The full significance of the new Import Policy Order for the period 2026 to 2029 cannot be understood if it is viewed only as an instruction to simplify imports. It is an important policy framework for the country’s import management, industrial raw material sourcing, commercial imports and material management of export oriented industries for the coming years.

In particular, the opportunity to import through contracts without LC in industrial and commercial sectors, and the provision for sourcing materials from local sources in export oriented industries, may bring new flexibility to business activities. At the same time, the coordination of the new policy with the provisions of back to back letters of credit is important for the export sector for establishments holding bonded warehouse licenses.

Therefore, Bangladesh Bank’s latest circular has not only informed banks about the new policy, but has also emphasized properly following the provisions of the new policy and existing rules of foreign exchange transactions in every transaction related to import and local sourcing.

Overall, the new import policy has increased flexibility in the import process on one hand, while maintaining the responsibility of ensuring controlled transactions in the banking channel on the other. The country’s import activities will be conducted under this policy until December 31, 2029, if no new import policy order is issued before that.

The greatest significance of the new system is increasing alternative methods for businessmen in import transactions, easing material sourcing in export oriented industries, and at the same time maintaining a controlled framework for foreign exchange transactions through banks. As a result, an opportunity has been created for a positive impact on the production process of the export industry, along with increasing speed and flexibility in the import system.