- Shift of leather goods manufacturing from China to Pacific/
South east Asia region
- A young, industrious, affordable workforce growing by roughly 2
- Growing middle class purchasing power
- Large domestic raw material base and environmentally
sustainable production of processed rawhide and leather products
- Availability of linkage and support industries
Lower labor cost serves as a strong competitive advantage for all the
export-oriented industries of Bangladesh. Although China, Vietnam, and India
continue to be amongst the major competitors in the overseas market, competitive
labor cost has and will continue to put the Bangladeshi leather industry into a
stronger position. In particular, China’s gradual shift from labor-intensive
manufacturing to high-tech and capital-intensive one is expected to reduce its
share in the global leather products market and accelerate the relocation of
these industries to cost-competitive locations. This shift may be further driven
by the need to diversify supply-chain in response to the post-/with-COVID-19
- Reduced CIT for 5 to 10 years depending on
- Import duty exemption on capital machineries
- Regulatory/ supplemental duty exemption for
footwear producer using materials such as tube, pipe,
plastic, PVC screen, textile/ knitted fabric
- 50% tax exemption for income derived from
- No VAT imposition on export goods
- Bonded warehousing facility for large import of
- 15% cash incentive on export value of leather
goods/ footwear, and 5% on crust leather from Savar Estate
- Leather and Leather Products Development Policy
2019 (August 2019) which addresses a range of incentives to
boost sector’s export earnings.
- Recognized as a high priority sector in the
Export Policy and National Industry Policy 2016.
- Three industrial estates dedicated for leather
and tannery industries, being set-up by the government in
the areas of Rajshahi, Savar and Chattogram.
Leather Goods & Footwear Manufacturers & Exporters' Association: A trade body to
represent interests of local leather goods manufacturers and provide services for
their collective benefits; such as market development/ promotion, HRD, policy
advocate, and research.
Bangladesh has duty-/ quota free access to developed countries (Generalized System of
Preferences) such as the EU, UK, Japan, Canada, Russia and Australia, while leather
products from China, a major competitor, is bearing additional duties to access such
markets, thus indicating the industry’s potential for export competitiveness.
Driven by the growth of local leather industry, a good range of supporting industries
are available in Bangladesh such as producers of packaging material, metal
accessory, adhesive, last with dies/ molds, sole, which are capable of satisfying
the requirements held by the top-exporters.