The cabinet yesterday approved the draft export policy for 2024-27, keeping in mind the challenges presented by Bangladesh's graduation from a least developed country (LDC) to a developing one in 2026.

Under the new policy, the government aims to export $110 billion worth of goods by FY27, cabinet Secretary Mahbub Hossain said after a cabinet meeting led by Prime Minister Sheikh Hasina at her office in Dhaka.

The government has devised strategies to enhance the competitiveness of local exporters in the global markets as Bangladesh will lose special trade preferences once it graduates from LDC status, Hossain added while briefing journalists at the secretariat in Dhaka.

The prime minister directed local exporters to promote not only software but also electronic devices, the cabinet secretary added.

She also suggested increasing exports to new markets and providing special facilities to female exporters and the pharmaceuticals and medical equipment sector.

Furthermore, she suggested improving domestic facilities related to the alternative dispute resolution mechanism so that any issue can be settled easily.

According to Hossain, the new export policy emphasises higher shipments of vegetables and stresses the need to maintain the quality of goods.

Bangladesh's total exports may reach $70 billion in the outgoing fiscal year of 2023-24, which ended on Sunday.

Bangladesh exported goods worth $55.55 billion in FY23 and services worth $7.50 billion, with their combined growth rate standing at 3.42 percent, according to data from the Export Promotion Bureau (EPB).

Since Bangladesh cannot continue to provide subsidies in the same structure once it becomes a developing nation as per the World Trade Organization's rules, the government also plans to phase out direct subsidies.

The government has cut export subsidies for almost all sectors to reduce pressure on government coffers and encourage exporters to prepare to compete in the global market without state support.

Between February and June of the last fiscal year, the government provided cash assistance ranging from 1 percent to 15 percent on export earnings to enhance the competitive edge of local exporters. Earlier, the highest rate was 20 percent.

From FY25, the maximum rate of export incentive has been set at 10 percent and the minimum at 0.3 percent, the Bangladesh Bank said in a notice on Sunday.

As part of a financial package, the government has proposed forming an Export Development Fund with the EPB, which may provide exporters with loans in the form of venture capital at a lower interest rate and on easy terms.

The government will also provide consultancy and technical assistance for product development and diversification of exportable goods.