International Trade in Bangladesh (2025): A TRW Global Law Firm Playbook

Prepared by TRW — Tahmidur Rahman Remura Wahid. We advise Bangladesh corporates, multinationals, banks, and development partners on cross-border trade, market access, customs/VAT, trade finance, supply chains, and disputes across Asia, the EU/UK, the Middle East, and North America.

Executive snapshot

Bangladesh is entering a decisive trade decade. The country’s LDC graduation is scheduled for November 24, 2026, which will gradually reshape market access terms, documentation expectations, and the economics of exporting—particularly in apparel and emerging diversified sectors. The smart response isn’t to wait; it’s to re-paper contracts, re-map supply chains, and pre-qualify products now so your pricing and lead times still work after preferences shift. (United Nations)

This guide distills what matters most for exporters, importers, and financing partners—and how TRW structures deals so goods move on time, money moves compliantly, and your rights travel with the cargo.

1) The big calendar: Bangladesh’s LDC graduation & preference landscape

• Graduation date: Bangladesh is slated to leave the UN LDC category on 24 November 2026. That milestone triggers a recalibration of preferences in major markets. Exporters must model new duty scenarios (and rules of origin) now to avoid post-2026 margin shocks. (United Nations)
• EU market: Under the EU’s current GSP framework (extended to end-2027), LDC “Everything But Arms” (EBA) benefits continue. For graduating LDCs, the EU applies a three-year transition after graduation; in Bangladesh’s case that points to EBA-style access until 2029, after which Bangladesh will need to fit into Standard GSP or qualify for GSP+. Commercial teams should scenario-plan both tracks and align compliance (conventions, origin, documentation) in advance. (European External Action Service)
• UK market: The UK’s Developing Countries Trading Scheme (DCTS) replaced GSP and is being refined, including rules-of-origin improvements flagged in mid-2025 guidance and expected to enter into force in early 2026. DCTS remains strategically important for Bangladesh apparel and diversifying lines; origin planning (and diagonals where available) will be decisive for post-graduation competitiveness. (GOV.UK)

TRW takeaway: Treat 2026–2029 as a managed transition window. Your contracts, HS classifications, and compliance files should already assume post-LDC conditions—so you don’t have to renegotiate under pressure.

2) The legal architecture you actually trade under

There is no single “International Trade Act.” Cross-border business rides on a stack of law and practice:

• Commercial contracts & Incoterms® 2020 (sale of goods, distribution/agency, toll/OEM, framework orders, logistics/warehousing).
• Customs & border rules (classification, valuation, origin, bonded/bond-to-bond, drawback).
• Indirect tax (VAT & Supplementary Duty) including import VAT credits and VDS (VAT deducted at source) logic.
• Foreign exchange (authorized dealer bank procedures for L/Cs, documentary collections, advance payments, royalties/technical fees).
• Standards & product compliance (BSTI and sector regulators).
• Competition & consumer law touchpoints for distribution and e-commerce.
• Dispute resolution (arbitration + court relief, admiralty for maritime issues).

Think of your master supply contract as the operating system that ties all of this together.

3) Market-access playbook: EU, UK, and beyond

3.1 EU (2026–2029 and after)

• 2026–2029: Expect continuation of preferential access through the EU’s three-year transition for graduating LDCs, within the umbrella of the current GSP extended to 2027. Build contract clauses that auto-adjust if and when the EU’s revised GSP takes effect (tariff changes, safeguard clauses, or compliance triggers for GSP+). (European External Action Service)
• Post-2029:
• GSP+: Best-case for apparel and many industrial lines, but requires ratification and effective implementation of specified international conventions.
• Standard GSP: A workable fallback for many products—but model duty exposure and re-price where needed.
• Operational tip: Map rules of origin against your actual BOMs. If you rely on non-originating inputs, build a conversion plan (local or regional sourcing) or re-engineer to hit the regional value-content thresholds.

3.2 UK (DCTS)

• Structure: DCTS keeps generous coverage for LDCs and is improving rules of origin (announced updates in 2025) that are due to bite from early 2026. Origin flexibility can be a real edge—use it. Keep proof of origin airtight (supplier declarations, processing records) to sail through post-clearance audits. (GOV.UK)

3.3 Other partners

• US, Canada, Japan, regional partners: Preferences are not uniform and can change with policy cycles. Many buyers will reset terms after 2026; avoid evergreen contracts that don’t allow for tariff pass-through or price re-openers.

4) Rules of Origin (RoO): make them part of product design

Origin isn’t paperwork; it’s engineering:

• Design for origin: Choose yarn/fabric/component sources and processing steps to qualify under the destination scheme (EU, UK DCTS, others).
• Origin documentation: Keep supplier declarations, PSRs, and processing logs aligned to HS headings and RVC formulas.
• Cumulation: Where available (and under the exact scheme), use regional cumulation to meet thresholds.
• Change control: Treat BOM tweaks as legal changes—re-test origin whenever sourcing or manufacturing changes.

5) Customs & border: ship faster, clear cleaner

• Classification: Maintain an HS classification dossier (technical sheets, lab results, images, rulings). Don’t leave it to the broker alone.
• Valuation: Lock your transfer-pricing logic with customs valuation rules; keep freight/insurance evidence consistent with the Incoterm selected.
• Origin at clearance: Pair origin documents with robust manufacturing records; expect post-clearance audit queries and keep files inspection-ready.
• Special regimes: Consider bonded warehouse, back-to-back L/Cs, and duty drawback for export production; document eligibility before pricing.

6) VAT & SD along the chain

• Import VAT credits: Link import VAT to taxable outputs; reconcile in your Mushak returns.
• VDS (VAT deducted at source): For sales to large buyers/government, ensure Mushak 6.6 certificates flow back so your decreasing adjustments land on time.
• Zero-rating: For exports of goods—and qualifying services—build the evidence pack (export docs, bank realization) to defend zero-rate treatment.
• Cash-flow: Map VAT and VDS into pricing and payment terms so working capital isn’t crushed.

7) Foreign exchange & trade payments (how money moves)

• Instruments: L/Cs (confirmed where needed), documentary collections, open account with credit insurance for trusted buyers, or structured terms (SBLCs, escrow).
• Advance payments & remittances: Align with authorized-dealer bank (AD) procedures; pre-agree checklists for royalties/technical fees and intra-group services so remittances don’t stall.
• Currency risk: Hard-currency invoicing, TT rate mechanics, and FX collars help steady margins; add make-up or true-up clauses in long-dated contracts.

8) Standards, safety, and product compliance (BSTI + sectoral)

• Mandatory marks/tests: Identify BSTI-mandated products and sector approvals (food safety, pharma/cosmetics, telecom equipment, energy).
• Labeling: Align origin, composition, safety warnings, and language rules for each market—especially for e-commerce and private label.
• Testing cadence: Use accredited labs; keep COAs, batch records, and calibration logs for inspections and claims.

9) Competition & distribution

• Verticals: Exclusive territories and selective distribution are common—but document a pro-competitive rationale (quality, investment, service).
• Resale price maintenance: Avoid hard RPM. Use RRP/MRP guidance and non-coercive incentives.
• Online channels: Clarify marketplace rules, gray-market controls, takedown processes, and data-sharing.

10) Logistics & ports: contract for the bottleneck, not the brochure

• Incoterms® 2020: Pick terms that match your actual handoffs (FOB/CFR/CIF for sea; FCA/CPT/CIP for multimodal/air). Remember: Incoterms allocate risk and cost—not title.
• Demurrage/detention: Bake in free-time assumptions, congestion triggers, shared mitigation duties, and evidence standards (terminal EDI notices).
• Warehousing/cold chain: Set temperature bands, data-logger routines, and deviation steps; clarify warehouse lien and liability caps.
• Insurance: Use stock-throughput policies to cover goods from supplier → warehouse → customer; make valuation (invoice + freight + duty) explicit.

11) Contract architecture that actually travels with your goods

Sales & supply (B2B):

• Scope/specs, AQL, acceptance testing, and cure paths.
• Price adjustment for tariff/VAT/SRO changes; hardship and force majeure tuned to port congestion, regulatory bans, and utility shortfalls.
• Payment terms with late-payment interest, set-off/netting (consistent with VAT rules), and clear governing law/arbitration.
• Retention of title until full payment; security over receivables/inventory where feasible.

Distribution/agency:

• Territory & channels (including marketplace and cross-border delivery), minimum purchases, service levels.
• IP & brand use, social handles, de-branding on exit.
• Warranty/returns SLAs and pass-through of statutory obligations.

OEM/ODM & toll manufacturing:

• BOM ownership, change control, tooling registers, and insurance.
• Confidentiality/data protection, role-based access, and post-termination IP return.
• Audit rights, unannounced inspections for high-risk lines, and recall/withdrawal choreography.

12) Disputes: speed, enforceability, and interim relief

• Arbitration (e.g., Singapore seat) is common for cross-border contracts; pair it with local-court interim relief for urgent injunctions (cargo holds, IP misuse).
• Admiralty & carriage claims: For maritime cargo damage, GA, or freight disputes, plan evidence early (surveys, SoF, NOR, log extracts).
• Customs/VAT disputes: Keep appeal calendars and technical dossiers (classification, valuation, origin). Many disputes are won on paper.

13) ESG, human rights, and traceability: what buyers will ask for

• Labour & safety: Demonstrate compliance with Bangladesh labour law and buyer codes (wages, hours, OSH, fire/building).
• Environmental: ETP operation logs for wet processes, air/emissions records, and hazardous-waste manifests.
• Traceability: Batch-level mapping, supplier KYC, and sanctions screening for sensitive destinations.
• Disclosure: Be ready with policies, audits, and corrective-action evidence—buyers increasingly tie these to PO eligibility.

14) A 90-day readiness sprint (exporter edition)

Days 1–15 — Market access audit: EU/UK origin mapping per product; tariff scenarios 2026–2029; draft a GSP+/Standard GSP fork in your pricing model. Align claims with labelling/standards. (European External Action Service, GOV.UK)
Days 16–30 — Contract refresh: Insert change-in-law and tariff pass-through; re-write Incoterms/title clauses; add documentable QA and recall language.
Days 31–45 — Customs/VAT files: Build HS classification dossiers; sync import VAT to Mushak; tighten VDS certificate flow.
Days 46–60 — FX & payments: Pre-clear L/C templates; confirm bank checklists for remittances (royalties/tech fees); set currency mechanics.
Days 61–75 — Supply chain: Approve substitute suppliers for origin thresholds; define demurrage/detention matrix; place stock-throughput insurance.
Days 76–90 — Audit & drill: Run a mock post-clearance audit; test a partial product recall; train sales/logistics on the new playbooks.

15) A 90-day readiness sprint (importer edition)

• HS & valuation: Confirm headings and transaction value documents; reconcile Incoterm with cargo insurance and invoice expressions.
• Licensing & standards: Secure any BSTI/sector approvals pre-shipment; stage test reports for clearance.
• Cash-flow: Align VAT credits to output plans; model the minimum tax/withholding interactions in your landed-cost calculator.
• Contracts: Lock supplier warranties, inspection rights, and penalties for late/defective delivery; add step-in rights for critical inputs.
• Logistics: Fix free-time in offers; document congestion procedures; require data-logger evidence for temperature-sensitive cargo.
• Risk: Place cargo and liability covers; map sanctions/KYC for upstream vendors.

16) FAQs

Q1. Will my EU access end the day Bangladesh graduates?
No. Under the current framework, EBA-style preferences continue for three years after graduation, pushing your practical EU transition to 2029—but you should build post-2029 models and compliance for GSP/GSP+ now. (European External Action Service)

Q2. Is the UK scheme helpful post-graduation?
Yes. The DCTS is designed to be generous, and rules-of-origin improvements (announced in 2025) should help from early 2026. Engineer for origin, keep documentation tight, and use cumulation where permitted. (GOV.UK)

Q3. What’s the single fastest way to avoid shipment delays?
A classification/valuation/origin dossier for each SKU, aligned to the exact Incoterm and contract price clause, plus pre-agreed broker SOPs and a PO-to-Mushak data trail. Most clearance pain is paperwork, not law.

Q4. My buyer wants fixed prices through 2030. Is that safe?
Only if you’ve hard-wired tariff/VAT/SRO pass-through, origin re-engineering options, and FX collars. Otherwise you’re selling options for free.

17) How TRW (as a global law firm) helps you de-risk trade

• Market-access & origin engineering: EU/UK (EBA → GSP/GSP+; DCTS), ASEAN corridors, GCC, North America.
• Contracts that travel: Sale/distribution/OEM/3PL suites tuned to Incoterms, origin, QA, and remittance rules.
• Customs & VAT ops: HS/valuation/origin dossiers, bonded & drawback regimes, Mushak-aligned invoicing, VDS/ITC cadences.
• FX & trade finance: Bankable L/C language, remittance checklists, and currency mechanics your treasury can live with.
• Disputes & enforcement: Emergency injunctions (cargo/IP), arbitration with enforceability planning, customs/VAT appeals.
• ESG & traceability: Buyer-grade policies, supplier audits, remediation curves, and reporting packs.

If you want, we’ll deliver a one-page International Trade Readiness Map—built around your HS codes, destinations, and contract stack—so your board, sales, finance, and logistics run on the same playbook.

References

1. UN LDC Portal — Bangladesh graduation status (confirms 24 November 2026 graduation date). (United Nations)
2. EU (EEAS) — EU–Bangladesh trade note (GSP extended to 2027; three-year transition post-graduation → EBA window through 2029). (European External Action Service)
3. UK Government — Developing Countries Trading Scheme (DCTS) (scheme overview and rules-of-origin improvements slated around early 2026). (GOV.UK)

TRW — Tahmidur Rahman Remura
Dhaka: House 410, Road 29, Mohakhali DOHS
Dubai: Rolex Building, L-12, Sheikh Zayed Road
Phone: +8801708000660 | +8801847220062 | +8801708080817
Email: info@trfirm.com | info@trwbd.com | info@tahmidur.com

This guide is general information, not legal advice. Trade rules and preferences evolve; obtain tailored counsel for your products, markets, and contracts.