Major Import Policy Changes, Goods Can Now Be Imported Without LCs
The country’s import management system has undergone major changes with the new Import Policy Order 2026–2029. Under the new policy, all importable goods in the industrial and commercial sectors can be imported without being subject to prescribed value limits and without opening letters of credit (LCs), through purchase and sale agreements. In certain cases, import payments can also be made through the open account method. The changes are expected to simplify import procedures and provide greater flexibility in banking transactions for businesses.
The policy also provides significant facilities for export-oriented industries to import and locally source production inputs. Inputs can be procured from local sources in local currency through back-to-back LCs, while free-of-cost procurement from local sources is also permitted. Necessary provisions have also been made regarding the import and procurement of production inputs under the bonded warehouse system.
The Foreign Exchange Policy Department-1 of Bangladesh Bank issued a circular in this regard yesterday, instructing authorised dealer banks to settle import and local procurement transactions in accordance with the new policy.
Effective Until 2029
The Ministry of Commerce issued the Import Policy Order 2026–2029 through SRO No. 308-Law/2026 on August 24. The order will remain effective until December 31, 2029. However, if no new import policy order is issued during this period, its provisions will remain effective until a new order is issued. The government gazette has also confirmed the publication of the Import Policy Order 2026–2029 on August 24.
The order will serve as the principal policy framework for the country’s import activities over the coming years. Importers, industrial establishments, exporters and authorised dealer banks will have to conduct imports and related foreign exchange transactions in accordance with its provisions.
Payment Through Open Account
One of the major changes in the new policy is the opportunity to make import payments through the open account method. This provision has been included in Article 5(m) of the Import Policy Order and was specifically highlighted in Bangladesh Bank’s circular.
The facility could provide greater flexibility in transactions between buyers and sellers with long-standing business relationships and mutual trust in international trade. However, existing laws, regulations and Bangladesh Bank instructions governing foreign exchange transactions must continue to be followed.
While the provision creates greater convenience for importers, banks will remain responsible for verification and record-keeping. Simplifying the import process does not exempt banks from existing foreign exchange regulations.
Import Without LCs and Value Limits
The most significant change concerns imports in the industrial and commercial sectors. Under Article 6(3) of the Import Policy Order, all importable goods in these sectors can be imported without prescribed value limits and without opening LCs, through purchase and sale agreements.
The provision reduces importers’ dependence on LCs and allows transactions to be conducted on the basis of agreements between buyers and sellers. It could particularly benefit businesses that maintain regular relationships with overseas suppliers.
However, the facility does not mean that all goods can be imported without restrictions. The Import Policy Order contains provisions concerning product categories, prohibitions, restrictions, required approvals and other applicable requirements. Importers must therefore comply with all relevant rules governing the goods and transactions concerned.
Local Sourcing of Inputs for Export-Oriented Industries
The new policy also provides significant facilities for export-oriented industries. Article 25 contains detailed provisions regarding the import and procurement of production inputs used by export-oriented industrial establishments.
Under the provision, inputs can be procured from local sources in local currency through back-to-back LCs. Free-of-cost procurement from local sources is also permitted.
The arrangement could help reduce production costs and lead times for export-oriented industries. In sectors such as garments, faster access to locally sourced inputs could ease time pressures in production and export activities.
Article 25 also contains provisions regarding the applicability of the bonded warehouse system to the import or procurement of production inputs, allowing export-oriented industries to manage such activities in line with bonded facilities.
Back-to-Back LCs for Bonded Warehouse Licence Holders
According to Part G of the Bangladesh Bank circular, back-to-back LCs were allowed in favour of export-oriented industrial establishments holding bonded warehouse licences. The latest circular states that the relevant provisions of Part G will be deemed to have been amended where necessary to bring them into conformity with the new Import Policy Order.
This creates greater policy consistency in import and production management for export-oriented industries benefiting from bonded facilities. Where there is any inconsistency between previous instructions and the new policy, the provisions of the latter will take precedence.
Greater Responsibility for Banks
Although the new policy simplifies procedures for importers in several areas, the responsibilities of authorised dealer banks remain unchanged. Banks have been instructed to follow the Import Policy Order 2026–2029 and applicable foreign exchange regulations when settling import and local procurement transactions.
Bangladesh Bank said authorised dealer banks must comply with the provisions of the Import Policy Order and applicable foreign exchange regulations when settling transactions related to the import of goods or local procurement of inputs.
Banks have also been instructed to inform all relevant parties about the new policy and take necessary measures. Importers will therefore still have to provide the required documents, agreements and product details and establish the legality of transactions through banks. In other words, although LCs are not mandatory in these cases, banking oversight remains in place.
New Step Toward Ease of Doing Business
One of the main objectives of the new policy is to introduce greater flexibility into the import process. The opportunity to import without LCs and prescribed value limits through agreements in the industrial and commercial sectors, along with the option of making payments through the open account method in certain cases, creates new alternatives for businesses.
Greater opportunities for export-oriented industries to source inputs locally could also increase the participation of local suppliers in production. The facility to procure inputs through back-to-back LCs in local currency could make supply chains in export-oriented industries more efficient.
However, the effectiveness of these facilities will depend on banking procedures, document verification, foreign exchange regulations and proper implementation by importers. Other regulatory provisions of the import policy will remain in force.
Long-Term Policy Framework
The Import Policy Order 2026–2029 is not merely a measure to facilitate imports; it establishes an important framework for import management, industrial raw-material procurement, commercial imports and input management in export-oriented industries for the coming years.
The provisions allowing imports without LCs through agreements in the industrial and commercial sectors and local sourcing of inputs for export-oriented industries could introduce greater flexibility into business operations. The alignment of back-to-back LC provisions for bonded warehouse licence holders with the new policy is also significant for the export sector.
In its latest circular, Bangladesh Bank has therefore not only informed banks about the new policy but also emphasised strict compliance with its provisions and existing foreign exchange regulations in every import and local procurement transaction.
Overall, the new policy increases flexibility in import procedures while retaining a regulated banking framework for foreign exchange transactions. Its key significance lies in expanding alternatives for import transactions, facilitating input procurement for export-oriented industries and maintaining regulatory oversight through banks. The changes could make import procedures faster and more flexible while supporting the production activities of export-oriented industries.
