The government yesterday announced cash incentives on exports of furniture and plastic products in a bid to boost exports.

Furniture exporters will get 15 percent and plastic products 10 percent as cash incentive against their exports based on “freight on board” value.

Bangladesh Bank issued two separate notices in this regard yesterday. With these two new sectors, the number of categories that enjoy cash incentives on exports now stands at 14.

According to the notices, factories that have bond licences and get duty drawback will not be eligible for the incentives. However, exporters of plastic products have protested the provision.

Furniture exporters welcomed the incentives saying that it would help them become competitive in the international markets.

“Manufacturers will now be encouraged to explore new markets for exports,” said Salim H Rahman, managing director of Hatil, a furniture maker that exports its products to Middle Eastern countries, Russia, Australia, Canada and Bhutan.

Presently, there is no fully export-oriented furniture factory in Bangladesh. Some factories export besides selling their products in the local market.

The cash incentives will encourage businesses to set up fully export-oriented factories, said Rahman.

Bangladesh exported furniture worth about $39 million in fiscal 2014-15 and nearly $29 million in July-March of the current fiscal year, according to Export Promotion Bureau.

Plastic products worth $100 million were exported in 2014-15 and $86 million during July-March.

Jasim Uddin, president of Bangladesh Plastic Goods Manufacturers and Exporters Association, said the way the government has offered the cash incentive will not be helpful.

He said most of the plastic product factories have bond licences as they fully rely on imports for raw materials and they are either bonded or get duty drawback.

So plastic goods makers will not get the cash incentive as per the notice, he said.

“We urge the government to change the rule,” said Jasim Uddin, who is also the vice chairman of Bengal Plastic Industries.

“If garment exporters can enjoy incentives despite having bond licences, why not the plastic product exporters?”

Shahedul Islam Helal, owner of Bengal Pacific, another plastic products exporter, said the cancellation of Bangladesh's generalised system of preferences in the US market has affected them badly.

“We were demanding cash incentives to offset the impact of the loss in exports to the US,” said Helal. 

Presently, different products, including garments, frozen foods, potato, halal meat, agro-products, handicrafts, jute goods and leather products, get cash incentives on exports.