BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

BANGLADESH AFTER LDC GRADUATION: PREPAREDNESS AND POLICY OPTIONS

Author: Mahfuz Kabir

DOI Link: https://www.doi.org/10.56888/BIISSj2025v46n1a2

ABSTRACT

Bangladesh is scheduled to graduate from the group of Least Developed Countries (LDCs) in November 2026. It is expected to generate considerable shocks to the country’s export earnings because of discontinuation of duty-free market access in important destinations that include the European Union (EU), the United Kingdom (UK), India, Australia, Japan and South Korea among others. This paper examines the possible magnitude of the loss of merchandised exports of the country in various phases after graduation, including its transition period. The empirical results discussed here demonstrate that significant losses would be incurred in the UK, Germany, India, Türkiye, Spain, Denmark, France, and Italy. The readymade garments sector would be hit the hardest in most of these destinations. In order to address the adverse impact on export earnings and continuation of preferential market access, the paper suggests a set of policy recommendations that include productivity enhancement, diversification of the export basket, production of high-end apparels, and signing of trade agreements with important destination countries in which Bangladesh enjoys duty-free market access under the LDC status.