The National Budget 2026–27 signals a transformative shift toward a “democratic, humane, and inclusive economy”. Honourable Finance Minister Amir Khasru Mahmud Chowdhury has explicitly prioritised an “investment-dependent, employment-generating, and production-oriented economy”. With a focus on deregulation, transparency, and a transition to a trillion-dollar economy by 2034, the budget lays out a clear ambition to reduce inflation to 7.5% and boost growth to 6.5%. Crucially for our stakeholders, the government has committed to a “deregulation agenda” to simplify business environments, including a directive to process new proposals within seven days.
While the budget recognises the need for export diversification, our recent study, “Institutionalised Exclusion: Bonded Warehouse Policy and SME Export Competitiveness in Bangladesh,” reveals a stubborn structural barrier: the “export paradox”. Although SMEs comprise 90% of industrial establishments and 7.8 million jobs, their contribution to exports remains marginal. The current Bonded Warehouse (BW) regime, designed decades ago for the RMG sector, acts as a structural filter that excludes non-RMG manufacturing SMEs. Our survey found that none of the 107 firms had ever used a BW, and 82.2% suffered from “double non-awareness” of available facilities such as SRO-384.
The FY 2026-27 budget’s emphasis on “deregulation” and “innovative communication strategies” provides a timely opportunity to address these systemic gaps. To align budgetary ambition with the ground reality of our SMEs, we propose three critical areas for government action:
First, we must shift from binary export requirements to a partial exporter licence. Current rules force an all-or-nothing approach that is commercially infeasible for most SMEs. A licensing system based on export intensity (e.g., a 25% threshold) would instantly unlock a massive segment of latent supply.
Second, the government’s focus on establishing industrial hubs and “creative hubs” should prioritise the development of common facility centres (CFCs). As our findings show, fixed compliance costs are the primary killer of SME competitiveness. Bundling shared bonded warehousing, quality testing, and digital printing under one roof is the most effective way to lower these costs and scale our reach.
Finally, the budget’s commitment to “financial stability” must translate into cluster-based credit scoring. By using utility bills and association membership as proxies for creditworthiness, we can bypass the collateral-based exclusion that currently cripples our SMEs.
The FY 2026-27 budget offers a historic opportunity to move from RMG-centric growth to a diversified export base. However, awareness alone is not enough; 48.4% of non-exporters are ready to enter international markets, but only if institutional architecture is reformed.
By adopting the evidence-based recommendations from our study—specifically targeting the “institutionalised exclusion” layer—the government can ensure this budget truly delivers on its promise of an inclusive, competitive, and export-oriented SME sector.
By transforming the current “institutionalised exclusion” into an “institutionalised access,” we can ensure that our SME sector becomes the sustainable backbone of Bangladesh’s post-LDC economic journey.
Ferdaus Ara Begum
CEO, BUILD