BUILD formally signed a service contract with the Department of Foreign Affairs and Trade (DFAT) of the Australian High Commission in Bangladesh on 15 December 2025. The agreement marks the launch of a flagship research project aimed at enhancing the export competitiveness of small and medium-sized enterprises (SMEs) in Bangladesh.
The project, titled “Study and National Conference on SME Competitiveness and Export Growth”, seeks to generate robust empirical evidence to inform policy reforms. These reforms aim to expand SME access to bonded warehouse (BW) facilities—one of the most critical trade facilitation tools in the country, which is currently dominated by large, 100% export-oriented firms, particularly within the ready-made garments (RMG) sector.
Although SMEs account for nearly 25 per cent of Bangladesh’s gross domestic product (GDP) and employ millions nationwide, their participation in exports remains limited. A key structural barrier has been restricted access to bonded warehouse facilities, which allow the duty‑free import of raw materials for export production. Recent regulatory changes, including the Bonded Warehouse Licensing Rules 2024, have further tightened eligibility criteria. This has disproportionately affected SMEs and partial exporters operating outside economic zones and high‑tech parks.
Implemented in core partnership with the SME Foundation, the DFAT‑supported study will examine how exclusion from bonded warehouse facilities raises production costs for SMEs, undermines their global competitiveness, and limits export diversification. This is an increasingly urgent concern as Bangladesh prepares for its graduation from the status of a least developed country (LDC) in 2026.
The research will also assess the effectiveness of recent fiscal and policy measures, including the financial year (FY) 2025–26 budget proposals regarding central bonded warehouses (CBWH) and free trade zone (FTZ)‑based bonded facilities. Furthermore, it will identify practical governance mechanisms—such as risk‑based audits, quota systems, and digital monitoring—to ensure SME inclusion while safeguarding government revenue.
Key outputs of the project will include a comprehensive research report, a policy options matrix, stakeholder validation workshops, and a national dissemination conference. This conference will bring together government agencies, private-sector leaders, development partners, and civil society organisations.
By supporting this initiative, DFAT reaffirms Australia’s commitment to inclusive economic growth, trade facilitation, and private‑sector development in Bangladesh. The study’s findings are expected to provide policymakers with an evidence-based roadmap for reforming bonded warehouse policies, reducing structural biases, and enabling SMEs to play a more dynamic role in Bangladesh’s export economy in the post-LDC era.