Bangladesh Issue Monitor July 2025 No. 7: FY26 Budget, Tariff Changes, Metro Line 2, Bangabandhu SEZ

July Issue Overview

Bangladesh's key issues in July 2025 centered on the implementation of the new FY2025-26 budget, import regulation adjustments, infrastructure project progress, and industrial policy shifts. As Bangladesh's fiscal year begins on July 1, the month marks a critical transition when new tariff rates, tax revisions, and investment incentives come into force.

This seventh monitoring report covers both trade (tariffs and import controls) and general (industry and infrastructure) developments to assess their implications for Korean companies. The FY26 total budget of BDT 7.97 trillion, a GDP growth target of 6.75%, and tariff adjustments across 150+ items are the critical variables. Among Korean export categories, electronics components, medical devices, and textile machinery benefit from tariff reductions, while steel products face a tariff increase.

BDT 7.97T

Budget Size

FY26 total budget

6.75%

GDP Target

FY26 growth goal

8.5%

Inflation

As of July

BDT 119

Exchange Rate

per USD

Adjusted

Import Tariffs

150+ items

27.5%

Corporate Tax

General corporates

$3B

FDI Target

FY26 target

Launched

Metro Line 2

Construction began July

FY25 vs FY26 Budget Comparison

FY2024-25 Budget

Total BudgetBDT 7.61T

GDP Growth Target6.5%

ADP BudgetBDT 2.65T

External Development SupportBDT 1.02T

FY2025-26 Budget (New)

Total BudgetBDT 7.97T (+5%)

GDP Growth Target6.75%

ADP BudgetBDT 2.80T (+6%)

Infrastructure AllocationBDT 1.5T (energy and transport)

Tariff and Import Regulation Changes

FY2025-26 Key Tariff Changes: Korea-Relevant Items

Item	Before	After	Change	Impact on Korea
Electronics components	15%	10%	Tariff cut	Favorable for parts exports
Finished vehicles	100%	100%	Maintained	No change
Steel products	15%	20%	Tariff hike	Negative for exports
Medical devices	5%	3%	Tariff cut	Favorable for exports
Cosmetics	25%	25%	Maintained	No change
Food additives	15%	10%	Tariff cut	Positive for food exports
Solar panels	0%	0%	Duty-free maintained	Positive for energy exports
Textile machinery	5%	3%	Tariff cut	Favorable for machinery exports

Industry Trends

Growth Sectors

IT and BPOExports above $2B, 25%+ annual growth

Pharmaceuticals$250M exports, accelerating ahead of LDC graduation

Shipbuilding$500M+ orders, focused on small vessels

Leather and Footwear$1.5B exports, market diversification

Sectors Requiring Caution

GarmentsStill adjusting to minimum wage increases

Housing and ConstructionRising material costs a burden

BankingNon-performing loan ratios increasing

PowerGas shortages and blackouts persist

Infrastructure Project Progress

Dhaka Metro Line 2 Groundbreaking

Dhaka Metro Line 2 (north-south corridor) officially began construction in July. Backed by $2.5B in JICA financing, the project covers 20 km with 16 stations and targets completion by 2030. Building on Line 1 operating experience, Korean companies have opportunities in signaling, communications, and power systems.

Bangabandhu Economic Zone Phase 2

Infrastructure construction for Phase 2 of the Bangabandhu Sheikh Mujib Shilpa Nagar economic zone has moved into full implementation. Roads, utilities, and wastewater treatment facilities are under construction, and Japanese and Chinese companies have begun occupying the zone. Inquiries from Korean companies are also increasing — advance registration through BIDA is recommended. 10-year corporate tax exemption and import duty exemption incentives apply.

Payra Deep Sea Port Progress

Payra Deep Sea Port construction has reached approximately 60% completion. Once finished, it is expected to ease congestion at Chittagong port and reduce logistics costs in southwestern industrial areas by around 30%. Export opportunities exist in port equipment, cranes, and logistics systems, and Korean shipping companies can expand port call destinations.

Rooppur Nuclear Power Unit 1 Commissioning

Rosatom's Rooppur Nuclear Power Plant Unit 1 (1,200 MW) is advancing toward commissioning targeted for late 2025. As Bangladesh's first nuclear power plant, it is expected to contribute meaningfully to easing the power shortage. This represents an opportunity for Korean nuclear component and equipment companies to enter the maintenance market.

July Major Infrastructure Project Status

Bangladesh Major Infrastructure Projects — As of July 2025

Project	Scale	Progress	Completion Target	Korean Opportunity
Dhaka Metro Line 2	$2.5B	Construction began	2030	Signaling and communications contracts
Bangabandhu Economic Zone	$1.5B	60%	2027	Zone entry and equipment
Payra Deep Sea Port	$800M	60%	2026	Port equipment and logistics
Rooppur Nuclear Plant	$12.65B	95%	Late 2025	Maintenance and components
Dhaka-Chittagong Expressway	$600M	40%	2028	EPC participation
Solar Power Complex	$450M	30%	2027	Panels and inverters

Issue Monitoring Flow

July Issues → Business Impact Assessment Flow

Budget Implementation

FY26 tariffs and tax revisions

→↓

Industry Shifts

Growth and contraction by sector

→↓

Infrastructure Tenders

Project opportunities

→↓

Impact on Korean Firms

Commercial implications

→↓

Response Strategy

Export and investment adjustment

July 2025 brought important changes to Bangladesh's business environment through FY26 budget implementation and the launch of major infrastructure projects. Korean companies should review export items affected by tariff changes and actively pursue infrastructure project contract opportunities. The Phase 2 entry opportunity at Bangabandhu Economic Zone should not be missed.

June-July Issue Monitor: Special Edition on U.S.-Bangladesh Trade TalksAnalysis of U.S.-Bangladesh trade negotiations and discussions on GSP restoration

August Issue Monitor No. 6Review August trade and economic issues and strategic responses for Korean companies

LDC Graduation (2026) Impact AnalysisReview the connection between FY26 tariff changes and LDC graduation

Bangladesh GDP $491.82B AnalysisReview the background behind the FY26 GDP growth target of 6.75%

2026 Market Entry Strategy Section 3: Industry AnalysisReview the impact of the FY26 budget on 8 major industries